Hull and East Yorkshire Hospitals Trust Financial Review 2014/15
Hull and East Yorkshire Hospitals Trust achieved its financial duties in the fiscal year 2014/15, maintaining a surplus for the eighth consecutive year. The Trust's underlying financial position, sources of income, and expenditure breakdown are detailed, showcasing a commitment to sound financial management. However, challenges are noted for the upcoming year, with an initial planned deficit for 2015/16. The Trust's financial performance and strategies to ensure future stability are highlighted in this comprehensive review.
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HULL AND EAST YORKSHIRE HOSPITALS TRUST ANNUAL GENERAL MEETING SEPTEMBER 2015 ANNUAL ACCOUNTS 2014/15 Lee Bond Chief Financial Officer
FINANCIAL PERFORMANCE REVIEW 2014/15 The Trust achieved all of its financial duties in 2014/15 To Break Even on its Statement of Comprehensive Income To achieve a 3.5% Return on Capital To operate within our External Finance Limit To operate within our Capital Resource Limit
BREAK EVEN DUTY As an NHS Trust we are required to at least break even. For the eighth successive year we achieved an operating surplus, with a surplus of 2.9m for 2014/15. 2007/08 m 6.8 2008/09 m 5.0 2009/10 m 7.6 2010/11 m 4.6 2011/12 m 4.8 2012/13 m 5.4 2013/14 m 5.9 2014/15 m 2.9 Total m 43.0 The 43m we have generated over the last 8 years has been used to repay loans and invest in our property, plant and equipment. We generate surpluses so that we can ensure a sound financial basis for the future particularly recognising the challenging economic environment. The Trust received a clean External Audit opinion (i.e. the financial statements give a true and fair view of the financial position of the Trust and have been properly prepared in accordance with the directed accounting policies).
UNDERLYING FINANCIAL POSITION The Trust reported a surplus in 2014/15 of 2.9m. This was achieved through the benefit of non-recurrent items totalling 10.6m which included winter resilience funding and part year benefits from slippage in specific developments including Francis and Keogh related clinical staffing investments. Without these items the Trust would have reported a deficit of 7.7m. For 2015/16 the Trust had an initial planned deficit of 21.9m which reflects the underlying position from 2015/16 along with new cost pressures from the following: Partial delivery of the 2014/15 efficiency program and only partial development of a program for 2015/16 Increased Clinical Negligence costs Cost of investments, for example in the new medical model within the Trust and in the new patient administration system As a result of the planned deficit the Trust s External Auditor made a referral to the Secretary of State under Section 19 of the Audit commission act 1998 that the Trust is likely to break its statutory break-even duty in 2015/16.
WHERE DOES OUR MONEY COME FROM? Our income in 2014/15 was 527m, as shown below. 5%5%4% NHS England: 157m 30% Hull CCG: 175m East Riding CCG: 123m 23% Other CCG: 24m Education & Training: 26m Other: 22m 33%
HOW DO WE SPEND OUR MONEY? Our expenditure in 2014/15 was 512m, as shown below. 9% 5% Pay: 305m 3% Clinical supplies and services: 117m Other supplies and services: 15m 23% 60% Premises & Establishment: 28m Other: 47m This year the cost of salaries and wages increased by 10M to 305M.
INVESTMENT IN INFRASTRUCTURE We invested 18.8m in property, plant and equipment ( m) Major Building Projects New Emergency Department New Ward Block Ward 500 4.8 4.1 Equipment Medical and Scientific Equipment Information technology 3.6 1.0 Other Backlog maintenance and Compliance Other 1.8 3.5 ____ 18.8 ____ TOTAL SPENT
THE FINANCIAL FUTURE We expect demand for NHS services will continue to increase, but expectations are changing as to how and where that care should be provided. We will need to make changes in the way services are provided. Clinical Commissioning Groups are looking for services to be provided within the community rather than in a hospital setting Care should be more personalised to the patients needs Patients expectations about the quality of care that they receive will not change. Quality is not optional. Funding will be limitedas the NHS faces a massive financial burden with estimates of a 20-30bn challenge by 2020 The Trust will need to improve efficiency and productivity to deliver services within the funding available.
IN SUMMARY Historically we have delivered within the financial constraints we face but 2015/16 marks a stepped change in the size of the challenge being faced. This challenge is not likely to get easier over the next 5 years Sound financial management is a prerequisite for future success. Our financial plans reflect our desire to provide services locally that are safe, high quality and which meet the requirements identified by the Care Quality Commission. The Trust is committed to developing a Financial Recovery Program. This is not a quick-fix. The level of transformation and change required will take time if services are to be provided safely throughout. The two keys to this are: 1. Transformation of our services to make them more efficient and productive 2. Collaborative working with commissioning colleagues and the wider health and social care economy.
