1. Trust Board Finance Director’s Update: Month 8 – November 2017
Financial Performance
In month I&E
The Trust’s performance for November was a £0.8m surplus before Sustainability and Transformation Fund (STF), this is £0.9m better than plan.
Year to date I&E
Deficit of £20.4m before STF, £0.7m worse than planned
STF funding is calculated quarterly and the Trust is anticipating delivering the financial element but failing the A&E element for Q1 to Q3.
For the financial element of STF the Trust earned £2.4m for Q1 and £3.3m for Q2. The Trust forecasts Q3 criterion will be met, so has accrued the £3.3m financial element relating to months 7 and 8. The total financial STF to November is £9m.
For the performance element of STF the Trust met the streaming criterion for Q1, earning £0.5m. The A&E performance criterion was not met in Q2, and is not forecast to be met in Q3. The foregone STF to November is £3.3m, with a further loss of £0.7m to be realised in December.
The foregone STF for Q2 and Q3 cannot be recovered.
For the eight months to 30 November: STF of £12.8m available, £9.5m earned.
Deficit after STF £11m, £4m adverse to plan.
Forecast Outturn I&E
The Trust continues to forecast to meet the control total £34m deficit before STF, but this forecast is subject to a number of material risks including delivery of elective activity; FEP delivery risk; CQUIN; and the maintenance of budgetary discipline.
Performance against total agency cap
Year to date, the Trust has spent £12.1m against the cap of £13.6m (£1.5m below the target).
Cash
Closing cash balance at November of £5.3m, which is £1.5m higher than October, due to settlement of research and Vanguard funding for Q3.
The forecast cash position, and affordability of the capital programme, for the remainder of the year is dependent upon achieving the income and expenditure control total forecast.
Capital
In month: Total capital expenditure of £2.5m for November.
Year to date: £11.9m expenditure YTD. Key projects including ICT infrastructure upgrade (£9m); Linear accelerator replacement (£3m) and Modular Theatres (£5.2m) are expected to complete prior to the year end.
Review of priorities for the remainder of the year has been completed.

2. Statement of Comprehensive Income
Year to Date
Forecast Outturn £m
Plan
Actual
Fav / (Adv)
I&E £'000
Patient Care Income
545.2
555.6
10.4 2%
814.0
834.2
20.2
Non Patient Care Income
15.5
19.6
4.1
27%
23.2
29.1
5.9
25%
Other Operating Income
57.0
56.4
(0.7)
(1%)
85.7
84.0
(1.7)
(2%)
Total Income
617.7
631.6
13.9
922.9
947.3
24.4 3%
Pay Costs
(384.8)
(393.6)
(8.8)
(578.2)
(589.5)
(11.3)
Pay Costs : Agency
(13.6)
(12.1)
1.5
11%
(20.4)
0.0 0%
Non Pay
(206.6)
(218.9)
(12.3)
(6%)
(309.7)
(330.2)
(20.5)
(7%)
Total Operating Costs
(605.0)
(624.6)
(19.6)
(3%)
(908.3)
(940.1)
(31.8)
(4%)
EBITDA
12.6
6.9
(5.7)
(45%)
14.6
7.2
(7.4)
(51%)
Non Operating Costs
(31.3)
(27.9)
3.4
(59.4)
(54.1)
5.3 9%
Adjust Donated Assets / Impairment
(1.2)
0.5
1.6
141%
10.8
12.9
2.2
20%
Control Total before STF
(19.8)
(34.0)
Sustainability and Transformation Fund (STF)
12.8
9.5
(3.3)
(26%)
23.3
19.3
(4.0)
(17%)
Control Total
(7.0)
(11.0)
(57%)
(10.7)
(14.7)
(37%)
Ratios
Agency : Total Pay
3.41%
2.97%
3.34%
EBITDA : Income
2.04%
1.10%
1.58%
0.76%
Net Deficit : Income
(1.13%)
(1.73%)
(1.16%)
(1.56%)
Key •
EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortisation
Fav refers to a Favourable variance to plan
(Adv) refers to an Adverse variance to plan
Year to Date: Patient care income, £10.4m favourable to plan: High cost drugs and devices account for £6.1m of the variance and are matched with expenditure in non pay. Higher than planned performance in non-elective £8.8m favourable, is offset by underperformance in other areas (£4.4m) adverse. Other income, £3.4m favourable to plan: £2.9m of this variance is driven by R&I income which is matched with expenditure. Pay costs, £7.3m adverse to plan: £1.7m relates to matched R&I expenditure. The driver of the remainder of the variance is additional pay cost associated with unplanned activity; and vacancies covered by premium pay. Non pay costs, £12.3m adverse to plan: £6.1m relates to high cost drugs and devices. The remainder of the variance is primarily driven by additional activity, including £1.3m PET scans; £1.0m blood usage; and £1.2m Theatres consumables. Non operating costs, £3.4m favourable to plan: The Trust has accounted for changes made to asset lives in the revaluation at March This has reduced depreciation charges by £2.9m for the year to date and £4.4m in the full year. Efficiency savings £0.6m, adverse to plan: For the year to October delivery of savings were £24.3m, compared to a plan of £24.9m. Forecast: The Trust continues to forecast achievement of the full year financial control total of £34m deficit (before STF) but delivering the pre-STF control total is high risk and requires specific management actions and no contingent events.

3. Statement of Financial Position: Working Capital
Key Performance Indicators
Debtor/Creditor Days
Target
Mar 15
Mar 2016
Mar 2017
Qtr 1
Qtr 2
Nov 17
Debtor Days 30 18 22 23 26 29 31
Creditor Days 15 14 21 24
BPPC (Cumulative)
Value
95%
91.78%
94%
93%
96%
Volume
92.05%
92%
Aged Debt
£000's
Current less than 30 Days
12,570
12,932
16,592
5,369
12,037
8,433
> 30 Days < 60 Days
2,652
2,556
2,645
3,181
5,500
4,360
>60 Days < 90 Days
443
1,020
746
1,589
1,445
2,238
Over 90 Days
<5%
1,619
3,427
3,001
5,807
5,256
5,474
Total
17,284
19,935
22,984
15,945
24,239
20,505
% Over 90 Days
9.36%
17%
13%
36%
22%
27%
Liquidity
Liquidity Days
> - 5days
(4.3)
(18.4)
(12.5)
(16.0)
(14.8)
(13.3)
Aged Debt (Sales Ledger)
Sales ledger debt reduced by £2.2m to £20.5m, largely due to payments received from NHSE for Hepatitis C (£0.7m), and other NHS Trusts (£1.4m), offset by delayed payments from Nottingham City Council (£0.3m) and quarterly invoiced charges to Nottingham University (£0.4m).
The over 90 day debt position increased by £0.2m, due to:
the aged debt profile of delayed CQUIN related to the system risk reserve;
procedures of limited clinical value (PLCV) and stroke rehabilitation service charges with commissioners (£0.6m);
and maternity pathway charges (£0.1m).
Debtor and Creditor Days Debtor days increased by 2 days to 31 days, largely resulting from accrued activity and STF performance. Creditor days reduced by 1 day to 24 days, as payables remained largely unchanged, but reduces as a percentage of year to date operating expenditure. Liquidity Days The Trust’s liquidity position improved by 1.0 days to minus 13.3 days, as a result of November trading . BPPC Trust performance was maintained at 94% and 92% against the 95% performance target for value and volume of invoices processed respectively in the year to November.

4. Statement of Financial Position
The material in month movements in the Statement of Financial Position are shown below:
Non Current Assets
There was net increase in the value of property, plant and equipment and intangible assets of £2.5m primarily driven by in month additions of £2.2m.
Working capital
Trade and Other receivables – the increase in receivables of £4.8m resulted from an increase in accrued activity performance (£1.8m) and STF funding (£2.3m), late SLA payments (£0.3m), NHS Supply Chain credit note provision (£0.4m) and prepayments relating to insurance premium and business rates (£0.9m).
Accrued Expenditure – The increase of £3.6m resulted from a higher GRNI accrual at the 30 November (£2.5m) and an increase in Estates accruals of £0.8m relating to energy invoices not yet received from energy suppliers.
Cash
Cash balances increased by £1.5m due to the settlement of research and Vanguard funding related to Q3.
Non Current Liabilities
Borrowings – increased by £3.9m due to a additional new revenue support loan drawn in November.
Reserves
SOFP Reserves - The movement in the I&E reserve reflects the November I&E trading surplus of £1.6m (including STF), combined with the historic cost depreciation adjustment movement on reserves, arising from the interfacing of depreciation charges within the fixed asset system (£0.7m). £m
31 Mar 2017
31 Oct 2017
30 Nov 2017
Month on Month Variance
YTD Year Variance
NON CURRENT ASSETS:
Intangible assets
7.9
6.4
6.2
(0.2)
(1.7)
Property Plant and Equipment
462.5
455.9
458.7
2.7
(3.8)
Other non current receivables
1.3
1.2
(0.0)
TOTAL NON CURRENT ASSETS
471.7
463.5
466.0
2.5
(5.7)
CURRENT ASSETS
Inventories
20.8
21.8
22.1
0.3
Trade & Other Receivables
57.8
74.3
79.0
4.8
21.2
Cash and cash equivalents
13.3
3.7
5.3
1.5
(8.0)
TOTAL CURRENT ASSETS
91.9
99.8
106.4
6.6
14.5
CURRENT LIABILITIES
Trade & Other Payables
(40.6)
(46.4)
(46.7)
(0.3)
(6.1)
Borrowings
(1.9)
Accruals
(42.0)
(43.7)
(47.2)
(3.6)
(5.2)
Deferred income
(14.6)
(19.2)
(18.9)
(4.3)
Provisions <1 year
(3.0)
(2.9)
0.1
TOTAL CURRENT LIABILITIES:
(102.1)
(114.0)
(117.6)
(15.5)
NET CURRENT ASSETS/(LIABILITIES)
(10.2)
(14.2)
(11.2)
3.0
(1.0)
TOTAL ASSETS LESS CURRENT LIABILITIES
461.5
449.3
454.8
5.5
(6.7)
NON CURRENT LIABILITIES:
(79.2)
(79.7)
(83.6)
(3.9)
(4.4)
Provision for Liabilities and Charges
(3.2)
0.0
TOTAL NON CURRENT LIABILITIES:
(82.4)
(82.9)
(86.8)
TOTAL ASSETS EMPLOYED
379.1
366.4
368.0
1.6
(11.1)
Public dividend capital
(411.1)
(411.5)
(0.4)
Revaluation reserve
(59.0)
(57.6)
(56.9)
0.7
2.1
Income and expenditure reserve
91.0
102.7
100.4
(2.3)
9.4
TOTAL TAXPAYERS EQUITY
(379.1)
(366.4)
(368.0)
(1.6)
11.1