NHS Blackpool CCG Annual report 2021-22 – Section 1c – Financial performance

Financial performance during 2021-22 has been undertaken with the continuation of the national regime introduced in March 2020 in response to the COVID pandemic. The CCG has operated within the cell structure environment and the finance regime altered to the revised ways of working required to free up staff time for the pandemic response. During 2021-22, the CCG has been operating within a system planning environment approach with key finance decisions being evaluated and discussed by the Lancashire & South Cumbria system healthcare organisations.

 

During 2021-22, in preparation for the introduction of International Reporting Standard IFRS16, the CCG has been securing information on the number, value and types of leases held. IFRS 16 is to be introduced for the healthcare sector with effect from 1 April 2022 and will be reported on in the next financial year.

 

As part of the CCG financial monitoring, the progress of our service providers (for example local hospitals, community services, primary care practices) are tracked against several national outcomes indicators and ensure that patient rights within the NHS Constitution are maintained. Financial performance reports are presented to and scrutinised by every meeting of the Governing Body (papers for these are available from the CCG website).

 

The CCG, in line with the financial position discussed and agreed in advance with NHSEI, has delivered a deficit position of £5.39M in 2021/22 and therefore utilised more resource in year than was allocated to it by NHSEI. Prior agreement notwithstanding it is however a breach of the CCG’s financial duty to spend within its revenue resource limit and results in the CCG’s external auditors issuing both a qualified regularity opinion and a referral to the Secretary of State under Section 30(b) of the Local Audit and Accountability Act 2014.

 

The £5.39M deficit has arisen from two agreed non recurrent (one off) technical adjustments, prior to the transition to the Integrated Care Board (ICB), as follows:

 

  1. £4.26M – in respect of hosted funds accounted for through the CCG on behalf of the Lancashire and South Cumbria Integrated Care System (ICS).

This reflects the opposite entry to the £4.26M surplus that the CCG was required to report in 2020/21 due to the deferral of equivalent ICS income by Lancashire and South Cumbria NHS Foundation Trust. The CCG did not receive an adjustment to its cumulative surplus position in 2020/21 for this transaction and did not receive an allocation in 2021/22 to facilitate the unwinding of the prepayment. As such this has resulted in this in year deficit in respect of ICS hosted funds.

 

  1. £1.13M – relating to a change in the accounting estimate used to calculate the prescribing accrual in the CCG’s accounts.

This reflects an unadjusted audit error reported by external audit in 2019/20 and 2020/21. CCGs were asked during 2021/22 to eliminate any such items in advance of the transition to the ICB. No allocations however were provided to cover the additional expenditure associated with the adjustment and therefore a deficit has arisen.

 

 

As both adjustments are technical in nature, they do not reflect a failure in financial control within the CCG. The historic cumulative surplus for the CCG will not be decreased due to the deficit position and therefore resource available for patient care services is unaffected.

 

NHSEI has indicated that the CCG will not be penalised in performance management terms for reporting this deficit and no regulatory action will be triggered.


Financial key performance indicators

 

The CCG’s performance is measured against several financial key performance indicators as outlined below:

 

Table 3: performance is measured against several financial key performance indicators

Key performance indicator Target Actual Result
Revenue resource use does not exceed the amount specified in Directions Maintain expenditure within the allocated resource of £1,003.4m Total expenditure £1,008.8m Target not achieved; deficit position reported
Delivery of a control total of breakeven Deliver a control total of breakeven Total position £5.39m deficit Target not achieved; deficit position reported
Achieve the Mental Health Investment Standard Deliver growth in Mental Health Expenditure Total Expenditure £47.64m Achieved
Maintain expenditure within the Annual Cash Drawdown Requirement Annual Cash Drawdown Requirement total £1,005m Total cash outflow £980m Achieved
Revenue administration resource use does not exceed the amount specified in Directions Maintain administration (running costs) expenditure within the allocated resource of £3.35m Total administration (running costs) expenditure £3.34m Achieved
QIPP savings targets identified, and savings achieved No QIPP savings targets were set due to the amended financial regime in place because of the COVID-19 pandemic No QIPP savings targets were set due to the amended financial regime in place because of the COVID-19 pandemic N/A
Maintain capital expenditure on primary care IT within the limits set by NHSEI Maintain expenditure within the allocated primary care IT capital allocation of £0.382m Total primary care IT expenditure £0.391m Achieved in line with agreed tolerance
Comply with the Better Payment Practice Code (BPPC) Ensure 95% (by number and volume) of all valid invoices are paid by the due date or within 30 days of receipt of a valid invoice, whichever is later Non-NHS payables 98.5% by number, 97.5% by value

 

NHS payables 97.4% by number, 99.9% by value

Achieved

Financial review

Due to the COVID-19 pandemic, a level four national incident was declared resulting in NHSEI introducing temporary measures in late March and early April 2020 that impacted on the current ways of working, and in particular the NHS finance regime.

 

These measures included:

  • moving to a nationally determined monthly ‘block’ contract payment; subsidised with a top-up payment where necessary
  • cash management supporting faster payment to providers
  • changes to monthly revenue reporting
  • revisions to the resource allocation process.

 

The following section provides a brief overview of the CCG’s financial performance in 2021/22. The financial accounts have been prepared under a Direction issued by NHSEI under the National Health Service Act 2006 (as amended).


Allocation

The total allocation to Blackpool CCG for 2021/22 was divided into the following categories:

  • We received allocations totalling £964.25m for commissioning NHS services for both the local community and for the Lancashire commissioning system. NHS Blackpool CCG, as in recent years, acted as host for Lancashire and South Cumbria system monies in 2021/22
  • We received a further allocation of £35.84m for delegated commissioning of primary care medical services
  • We received a further allocation of £3.346m from which we were expected to cover all our running costs

Accounting policies

The CCG’s accounting policies are shown in full in Note 1 to the Annual Accounts. The Annual Accounts have been prepared on the ‘going concern’ basis (Note 1.1 to the Accounts provides further detail on the adoption of the going concern assumption). This policy allows for the planned organisational transfer to the Lancashire & South Cumbria Integrated Care Board during 2022/23. The accounting policies follow International Financial Reporting Standards (IFRS) to the extent that they are meaningful and appropriate to the NHS, as determined by HM Treasury.


Analysis of 2021/22 operating expenses

pie chart of expenses

 

 

 

Last updated on 23 June 2022 at 14:41 by Senior communications and engagement officer N