Item 8 — Update on Plans 201516

Blackpool CCG Governing Body – Part I
5 May 2015
Update on Plans for 2015/16,
Incorporating a Summary of Outturn on 2014/15 Plans
Executive Summary
Introduction
1. This report is to update the Governing Body on the main aspects of the plans submitted to NHS England
for 2015/16. The report starts with an explanation and interpretation of the outturn position for 2014/15
and moves on to explain the main features of plans for 2015/16.
Issues arising from the previous year’s (2014/15) plans
2. In order to understand the 2015/16 plan properly it is necessary to understand the main aspects of the
2014/15 plan and in particular the outturn issues that had to be dealt with first when planning for
2015/16. The 2014/15 financial year was very difficult for the CCG, as it was for the whole NHS.
3. The plan in 2014/15 was to:
• Meet all NHS Constitution targets and standards (mainly achieved).
• Develop new models of care as part of the move towards a more strategic solution for clinically
sustainable and affordable services in Blackpool and across the Fylde coast (partly achieved).
• Reduce non-elective admissions by £2.4m, following and enabled by investment in new services of
£0.6m (not achieved).
• Finish the year with a 1%/£2.3m surplus in line with national requirements (achieved).
• Exit 2014/15 with an underlying 2.5% recurring surplus of £5.7m (not achieved).
• To have plans to spend the recurring surplus on a non-recurring basis (achieved but see narrative
below).
• To keep a contingency fund of (£1.2m) to cover any over-performance on contracts (achieved but see
narrative below).
• Stay within the £3.95m running cost allowance (RCA) (achieved).
4. Appendix 1 shows the forecast for the level of achievement of the NHS Constitution standards and
targets for 2014/15. Some of the information is as yet un-validated. Of particular note is:
• The A&E target covering the Emergency Department and Urgent Care Centre at BVH, and the Walk-in
Centre at Whitegate Health Centre achieved for the year the minimum 95% of all patients having
been admitted to another service or discharged from the department within 4 hours. This was a major
achievement and although the target was not achieved in all months or quarters throughout the year,
this health economy was the only area in the North of England to achieve the aggregate result for the
year.
• Based on information received from BTH the aggregate annual RTT metrics at BTH were achieved by
the end of March 2015, although the figures shown in appendix 1 only apply to the 11 months to
February 2015.
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Blackpool CCG Governing Body – Part I
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Diagnostic waiting times were not achieved.
NWAS, the ambulance service covering the whole of the northwest, did not achieve the minimum of
75% of all category red patients being attended by an ambulance within 8 minutes (Red 1 and Red 2)
or 95% within 19 minutes. The averages for NWAS were 69.2%, 69.8% and 93.3% respectively. These
figures are the ones used to assess all northwest CCGs’ performance, including Blackpool. However,
Blackpool is one of the areas where NWAS is able to achieve the required response rates and the
corresponding figures were 84.3%, 82.4% and 94.8%, although this does not count as achievement of
the targets.
Overall cancer standards were met (subject to final validation).
5. For other targets/standards the main points are:
• There were 3 cases of MRSA during the year, which exceeded the threshold of nil. Two have been
attributed to the CCG and one to BTH.
• There were 54 Trust-attributable cases of C.Difficile during the year, of which 24 were identified as
lapses in care and the remainder unavoidable. The 24 cases were within the Trust’s threshold of 28.
The CCG did not achieve its threshold of 43, but the extent of this is still in the process of being
validated. In 2015/16 the thresholds have been increased for the Trust and CCG to 40 and 58
respectively (for lapses in care) which will make it more likely that the thresholds can be achieved.
• There were 3 instances of breaches where patients were temporarily accommodated in a mixed sex
setting, when the threshold was nil.
• There were two instances of a never event of +12 hour trolley waits, which by definition should never
happen and where case reviews have been undertaken to learn how to avoid them in future.
• The target of 15% of patients accessing IAPT services with 6 weeks was achieved.
• The dementia screening rate of 65% was achieved.
The CCG is recognised by NHS England as performing well against the key performance standards.
6. The main aspects of the financial outturn were:
• Overall, the CCG met the requirement to meet the national control total of a 1% surplus of £2.3m.
• The CCG did not exit the year with a £5.7m surplus as planned. The exiting surplus was £1.1m. £1.9m
of the shortfall of £4.6m can be attributed to the allocation shortfall relating to specialised services,
but this has effectively been rectified in 2015/16 (see explanation below in paragraph 14).
• Overspending against budget in the acute sector of £3.7m or 4%.
• Overspending against budget in Continuing Healthcare by £1.5m or 18%.
• Overspending on prescribing by £0.9m or 3%.
• The CCG underspent on the RCA.
• The CCG underspent in other areas, mainly by stopping planned developments (£3m), underspending
against some budgets including the RCA (£1.3m), and the contingency reserve (£1.2m).
7. The CCG had sought to reduce the risk of over-performance on non-elective admissions by agreeing an
assured (fixed) value contract for this type of admission at Blackpool Teaching Hospitals FT, but given the
large size of the increases the CCG agreed to supplement the payments for non-electives by £0.6m in
2014/15.
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Blackpool CCG Governing Body – Part I
8. The biggest financial problem encountered by the CCG in 2014/15 that will affect 2015/16 plans was the
substantial rise in the number and cost of non-elective (unplanned or emergency) admissions, despite the
implementation of schemes aimed at their reduction. By the end of the year the number of such
admissions had increased by 6% on the plan (which was based on the previous year’s activity levels) with
a cost that was 10% higher (9% and 11% for BTH). Throughout the year the percentage monthly activity
increases and associated costs varied widely compared to the previous year, making it very difficult to
forecast trends. The range for monthly activity increases against plan was -1% to +22% and the cost
variance range was -1% to +20%. The increases in activity and the increases in cost did not always match.
For example, in June the activity variance was +10% and the associated cost variance was +20%. In
February 2015, the activity variance was +2% but the cost variance was +18%.
9. As the high level of non-elective admissions was evident from month 1 of the financial year, it became
obvious that the CCG was not on course to reduce them as it had planned and accordingly a decision was
made relatively early in the year not to plan for a reduction. This had the effect of making recurrent the
planned non-recurrent use of funds (£2.4m) to neutralise the impact of the income loss for BTH in
2014/15 and the Trust will keep this income going forward into 2015/16.
10. As a result of all of the above, rather than exiting 2014/15 with a £5.7m recurring surplus, the CCG ended
with a £1.1m recurring surplus. This comprises a £2.7m deterioration in the recurring position of the CCG
and a shortfall of £1.9m arising from the allocation error attributable to specialist services that NHS
England has confirmed will not be rectified (although this has now been resolved through the 2015/16
allocation process – see paragraph 14 below).
11. The CCG did achieve the main requirement to return its control total of a 1% surplus of £2.3m. However
at the time of writing this report there is still a potential risk to the delivery of that duty. The CCG has not
yet received the final activity/cost figures for the variable elements of the contract with Blackpool
Teaching Hospitals. The CCG has estimated that activity in March (8.5%) will be double the aggregated
rate of over-performance in the first 11 months of the year (4.2%). Blackpool Teaching Hospitals have
indicated that they believe the March activity figures are substantially higher even than this. It will not be
possible to validate the figures until after the accounts and annual report are submitted.
Plans for 2015/16
12. Activity and operational plans – the CCG plans to meet all NHS Constitution targets. There are a number
of initiatives in 2015/16 that should provide more confidence that this broad aim can be achieved, as
follows:
• Resilience funding of £1.25m was included in the CCG’s baseline allocation (equivalent to 0.5%) and
this enabled us to agree schemes from April 2015 to better assure the achievement of the A&E target,
rather than having to plan the required schemes from part way into the year.
• The Better Care Fund (BCF) requires health and social care commissioners to work together more
effectively to control non-elective admissions and the main expression of the joint work is agreement
on the development of Extensive Care and Enhanced Primary Care services in Blackpool.
• The CCG has agreed to make recurring funds available equivalent to the £5 per head for GPs that was
required in 2014/15. The sum of £0.86m will be used by practices in Blackpool to focus attention on
avoidable non-elective admissions that GPs could potentially prevent.
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Blackpool CCG Governing Body – Part I
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Activity levels in providers have been set at 2014/15 outturn levels. There were large increases in nonelective and some elective activity levels during 2014/15 and the CCG has not been able both to fund
contracts at these higher levels and make growth available, except for ambulance services. There is a
risk that the underlying trend is one of growth, so the CCG must do everything possible both to halt
the potential rise in activity above 2014/15 outturn levels and make £3.2m savings on top of this (see
paragraph 15 below).
13. Longer term clinically sustainable services – the CCG is planning to spend an extra £1m on Extensive Care
services at Moor Park in 2015/16 and £0.3m on extra district nursing to enable Enhanced Primary Care
(EPC) services to proceed. Rolling out Extensive Care services to the south and central parts of Blackpool
will require non-recurring financial support from NHS England’s Vanguard programme. Similarly, although
a start has been made on EPC services, non-recurring financial support from Vanguard sources will also be
necessary.
14. In time and based on estimates made by the Oliver Wyman Consultancy, which will require local
validation, full Extensive Care and EPC services could save the CCG up to £11m per annum, enabling the
on-going health and social care needs of the population to be met in providers that are clinically
sustainable.
15. Financial plans - The CCG has received a growth uplift of 3% in recognition of it being below its fair share
target allocation. Because of this, the CCG has recognised that the original shortfall to its allocation
because of the specialist services adjustment has now been corrected, as without the shortfall the CCG
would have been closer to its target allocation and would have received a lower level of uplift.
16. Despite this level of uplift, the CCG is facing a period of financial constraint that will require a robust and
sustained management focus on controlling expenditure, putting more controls in place to ensure patient
pathways are met and developing a strategic approach to commissioning financially and clinically
sustainable health services. The CCG continues to plan to meet the national requirement to achieve a 1%
surplus (£2.45m) in 2015/16. However, there are risks that the CCG must manage if this is to be achieved
by March 2016, which are that there is no funding for additional growth in activity above outturn and the
CCG must deliver a £3.2m savings programme.
17. With the notable exception of Ambulance services, the CCG has only been able to fund its 2015/16
contracts at the level that the same providers expended in 2014/15. That means there is no assumption of
growth in 2015/16, which is out of line with historic trends. The reason why the CCG has taken this
approach is simple; because of the high level of growth in activity in 2014/15 it cannot afford both to fund
its contracts for the high level of outturn and also commission assumed growth in 2015/16. The CCG
received an uplift of 3% in 2015/16 but the rate of increase in activity levels above the previous year that
required outturn funding was higher. For example, non-elective activity increased by 6% (9% at BVH),
Continuing Healthcare costs by 18% and elective activity by 4% in 2014/15 compared to budgets.
18. The CCG recognises that it must work in partnership with other organisations across the Fylde Coast if it is
to improve services while simultaneously reducing costs. Therefore, despite not being able to fund growth
in most of its budgets in 2015/16, it has nevertheless planned to fund £2.2m in developments designed to
change the way in which services operate. This will not be sufficient to achieve all the changes required,
but because the plans for improvements across the Fylde Coast are well advanced, NHS England has
granted the Fylde Coast 'Vanguard' status to support the strategic changes that are required.
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Blackpool CCG Governing Body – Part I
19. In order to fund 2015/16 budgets at 2014/15 outturn levels, return a 1% surplus and be able to continue
certain service developments to keep the service change process on course, the CCG will have to find
savings of £3.2m. It could be argued that the total level of risk is higher than this amount because no
2015/16 growth has been funded. Savings will need to be identified and implemented during 2015/16.
The Finance and Performance Committee of the CCG will receive plans to make these additional savings at
its May 2015 meeting.
20. Overall 2014/15 was a very difficult year financially for the CCG and moving forward into 2015/16 the
position is even more challenging. The CCG will need to develop and implement robust operational plans
to control and reduce expenditure and simultaneously develop strategic level plans to enable clinically
sustainable services to be delivered within the lower resource levels. 2015/16 looks like being the most
important year yet for the CCG.
Gary Raphael
Chief Finance Officer
David Bonson
Chief Operating Officer
29 April 2015
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