Financial Position and Turnaround Plan
Presentation by the Chief Executive, NHS Harrow.
The Chief Executive, Harrow Primary Care Trust (PCT), introduced the item and explained that there had been a significant swing in the PCT’s financial position since 2007/08 when they had achieved surplus funds. The statutory financial duties for 2009/10 had only been achieved with a £6.5 million loan.
The PCT did expect for their financial situation to improve. A Savings Plan had been designed to address these issues. The Board was informed that the reason for the PCT’s current financial situation was due to an increase in their expenditure. This had been mainly caused by significant increase in the amount spent on patients receiving acute services.
The outturn position for 2010/11 was dependant on achieving savings of £18.3 million and obtaining £7.9 million from other PCTs. The outturn position for 2011/12 would be achieved through savings of £25 million.
The key principles of the Savings Plan focussed on achieving greater efficiency, reducing unnecessary acute care and ensuring that the PCT paid what it was responsible for rather than reducing services. There were risks associated with the Savings Plan but there was confidence that at least one-third of the proposals contained would be achieved.
Robustness of the Savings Plan would be ensured in a number of ways. This included utilising external expertise to establish a Turnaround Programme and carrying out an impact assessment on each project to ensure that there were no unintended consequences.
The majority of savings in the breakdown plan related to providing acute care at a lower cost. Other savings related to avoiding acute care, lower drugs costs and continuing care.
The presentation was concluded by referral to recent proposals announced by Central Government to abolish PCTs and provide GPs with the power to commission services. The PCT had identified themselves as being in a transitional stage and were keen to engage GPs at an early stage regarding their commissioning responsibilities.
During the discussion on this item, Members of the Board raised a number of issues, which were responded to as follows:
· The PCT would work very closely with GPs in the transitional period. It was not perceived that it was the intention of the government to transform GPs into managers but rather for them to provide clinical expertise and leadership in ensuring that services were responsive to patient’s needs.
· Some of the Savings Plan proposals had already been secured. Some of the proposals were work in progress and there was a reasonable confidence that they would be achieved. Some proposals had high risks associated with it and required more work.
· Every proposal in the savings plan had been risk assessed. They had also been published providing transparency in relation to the proposals.
· The PCT were conscious of the guidance from Central Government to reduce management costs.
· There were a variety of reasons why there had been a 17.4 % slippage in the savings target for this year. These included a lack of activity at community clinics.
· Some key partners were involved in impact assessments and some were done in-house. It was dependent on the nature of the scheme.
· A strength of the forthcoming GP commissioning scheme would possibly be influencing people to use more services in the community.
· There had been a lot of discussion with the Council on the proposals including attending business transformation meetings.
The Chief Executive, Harrow Council, suggested that given the recent proposals announced by Central Government, the Board could assist the PCT in ensuring that the transition was as seamless as possible.
In response the Chief Executive, Harrow PCT, stated that they would engage with the board when the GP’s arrangements were beginning to be clarified and confirmed.
The Chairman of the Board requested that the PCT be invited to a future meeting to provide an update on the achievement of their savings targets.
AGREED: That the report be noted.
- Financial Position and Turnaround Plan, item 19. PDF 88 KB
- Financial Position Report, item 19. PDF 89 KB
- Financial Position Appendix, item 19. PDF 76 KB