The Welsh Government has changed the financial duties of NHS Trusts for 2014-15 onwards. The first financial duty gives additional financial flexibility to NHS Trusts by allowing them to balance their income with their expenditure over a three-year rolling period, replacing the duty to balance their books over a one year period. The first three year period under this duty is 2014- 15 to 2016-17, so NHS Trusts’ performance against this duty will not be measured until 2016- 17.
The second financial duty requires NHS Trusts to prepare and have approved by Welsh Ministers a rolling three year integrated medium term plan. This duty is an essential foundation to the delivery of sustainable quality health services. For 2014-15 (and until Treasury consent has been obtained for this change) it will be an administrative duty (an administrative duty is required by the Welsh Government, but not by primary legislation). An NHS Trust will be
deemed to have met this duty for 2014-15 if it submitted a 2014-15 to 2016-17 plan approved by its Board to the Welsh Ministers, who have then approved it by the date that the Accountable Officer signs the 2014-15 Financial Statements.
I placed unqualified audit opinions on the 2014-15 financial statements of each of the three NHS Trusts. For each of the financial statements I placed a narrative report alongside my audit certificate setting out the Trust’s performance against the two financial duties. I have summarised those reports below.
Public Health Wales NHS Trust
As set out above, the Trust will not be measured against its first financial duty until 2016-17. Nevertheless it is expected to manage its finances to ensure it does not over spend. For 2014- 15 the Trust achieved a surplus of £35,000.
The Trust did not meet its second (administrative) financial duty to have an approved three year integrated medium term plan in place. The Trust submitted its first integrated medium term plan to the Welsh Government in March 2014. The Welsh Government was satisfied that the plan was financially balanced but had concerns that it was not sufficiently integrated with the plans of other the Trusts and Local Health Boards. The Welsh Government did not request a
resubmission but accepted instead a one year plan for 2014-15.
In April 2015 the Trust submitted its three year plan for 2015-16 to 2017-18 to the Welsh Government in April 2015, which the Minister for Health and Social Services approved in June 2015.
Velindre NHS Trust
The Trust achieved a surplus of £39,000 for 2014-15.
The Trust met its second (administrative) financial duty to have an approved three year integrated medium term plan in place. The Trust’s integrated medium term plan for 2014-15 to2016-17 was submitted to the Welsh Government on 31 March 2014 and was approved by the Minister for Health and Social Services on 7 May 2014.
The Trust submitted its three year plan 2015-16 to 2017-18 to the Welsh Government on 1 April 2015. On 4 June 2015 the Trust received confirmation of the plan’s approval by the Minister for Health and Social Services.
Welsh Ambulance Service NHS Trust
The Trust achieved a surplus of £0.1m for 2014-15.
The Trust did not meet its second (administrative) financial duty to have an approved three year integrated medium term plan in place. The Trust submitted an Integrated Medium Term Plan (IMTP) for the period 2014-15 –2016-17, which was approved by the Trust Board on 20 March 2014 and then submitted to the Welsh Government. Whilst the Welsh Government noted that progress in the development of the plan is evident, the current changes within the commissioning framework mean that an approved IMTP is unrealistic at the current time. Ministerial approval was therefore withheld.
The three-year plan for the period 2015-16 to 2017-18 was approved by the Trust Board on 26 March 2015 and submitted to the Welsh Government on 1 April 2015. As commissioning arrangements continue to bed down, the Minister for Health and Social Services again withheld approval. A revised version of the plan was submitted to the Trust’s Board on 4 June 2015.
Looking forward
For the current financial year staff of the Wales Audit Office are continuing to monitor the financial position of the Trusts and how well the new arrangements are being embedded and working in practice. I will be setting out the findings in my Structured Assessment reporting on each Trust, and in my reporting to the Welsh Government.
Huw Vaughan Thomas Wales Audit Office
Auditor General for Wales 24 Cathedral Road
14 July 2015 Cardiff
STATEMENT OF COMPREHENSIVE NET INCOME AND EXPENDITURE FOR THE YEAR ENDED 31 MARCH 2015
2014-15 2013-14
Note £000 £000
Revenue from patient care activities 2 474,540 444,047 Other operating revenue 3 267,916 227,764
Operating expenses 4 (742,405) (671,861)
Operating surplus 51 (50)
Investment revenue 5 102 129 Other gains and losses 6 411 526
Finance costs 7 235 (645)
Retained surplus/(deficit) 799 (40)
Other Comprehensive Income
Net gain/(loss) on revaluation of property, plant and equipment 2,988 1,067
Total other comprehensive income for the year 2,988 1,067
Items that may be reclassified subsequently to net operating costs
3,787
1,027
The notes on pages 12 to 56 form part of these accounts.
.
31 March 31 March
2015 2014
Note £000 £000
Non-current assets
Property, plant and equipment 12 175,428 166,238
Intangible assets 13 28,506 26,274
Trade and other receivables 20 460,412 417,597
Total non-current assets 664,346 610,109
Current assets
Inventories 18 7,006 3,296
Trade and other receivables 19 272,464 219,297
Cash and cash equivalents 20 34,262 20,714
313,732
243,307
Non-current assets held for sale 12 284 165
Total current assets 314,016 243,472
Total assets 978,362 853,581
Current liabilities
Trade and other payables 21 (99,727) (70,302)
Borrowings 22 (1,430) (1,346)
Provisions 24 (209,198) (171,004)
Total current liabilities (310,355) (242,652)
Net current assets/(liabilities) 3,661 820
Total assets less current liabilities 668,007 610,929
Non-current liabilities
Trade and other payables 21 (222,366) (211,801)
Borrowings 22 (5,359) (6,775)
Provisions 24 (245,641) (217,663)
Total non-current liabilities (473,366) (436,239)
194,641
174,690
Financed by: Taxpayers' equity
Public dividend capital 158,027 141,863
Retained earnings 3,454 2,426
Revaluation reserve 33,160 30,401
Total taxpayers' equity 194,641 174,690
The notes on pages 12 to 56 form part of these accounts.
Dr Andrew Goodall 3 July 2015
Director General, Health, Chief Executive NHS Wales, Health and Social Services Group.
STATEMENT OF CHANGES IN TAXPAYERS' EQUITY AS AT 31 MARCH 2015 Public Dividend Capital Retained earnings Revaluation reserve Total £000 £000 £000 £000 Balance as at 1 April 2014 141,863 2,426 30,401 174,690 Changes in taxpayers' equity for 2014-15
Retained surplus/(deficit) for the year 799 - 799
Net gain on revaluation of property, plant and equipment - 2,988 2,988
Movements in other reserves 52 (52) -
Transfers between reserves 177 (177) -
New Public Dividend Capital received 16,237 16,237
Other movements in PDC in year (73) (73)
Balance at 31 March 2015 158,027 3,454 33,160 194,641
The notes on pages 12 to 56 form part of these accounts.