AAG Recommendation 2 – Financial Planning Process
"Over the next three months, NHS Tayside should subject its financial planning framework to rigorous and comprehensive review. This should help to ensure that projections and targets for future years are based on a thorough service by service understanding of cost drivers, risks and opportunities."
NHS Tayside's assessment
"The Board has reviewed its financial planning framework in the context of financial, clinical and care governance to ensure that projections and targets for future years are based on a service-by-service understanding of cost drivers, risks and opportunities. In conjunction with NHS National Services Scotland we have developed a new Business Planning and Budgeting Programme ( BPB) over the past nine months to work towards achieving a recurring sustainable financial balance position through 2018/19, incorporating service, workforce and financial planning.
A NHS Tayside Board development event in September 2017 on BPB worked with Board Members to understand their appetite for risk and service change. Under the BPB, services will submit group service plans, associated budgets and efficiency measures for budget review scrutiny by Directors and Non-Executive Members. The first of a series of three review meetings took place in December, with further follow-up reviews meetings in January and February 2018. Considerable support has been made available to individual groups and service teams to ensure that the new process delivers plans for achieving financial targets.
The BPB will cover all service areas directly managed by NHS Tayside (Medicine Directorate, General Surgery, Orthopaedics & Trauma and Critical Care Directorate, Access Directorate, Operations Directorate, Specialist Services Directorate and Public Health), secondary care medicines, corporate and regional services.
The IJBs [Integrated Joint Boards] are integral to the budget review process and participate fully at each stage.The Director of Finance works closely with the Chief Financial Officers of the IJBs to ensure that there is a consistency on the financial planning assumptions and on the resource delegated to each Health and Social Care Partnership from NHS Tayside. NHS Tayside's budget planning timetable is aligned with that of the IJBs to ensure that a whole system approach is taken, while recognising their respective governance processes.
Whilst service and workforce plans over the three year period will respond to recommendation 3 (Integrated Clinical Strategy), we would highlight the two key strategic plans which will contribute towards the future shape of clinical services and overall financial position in 2018/19:
- Shaping Surgical Services – NHS Tayside's Board approved the Shaping Surgical Services preferred clinical model in October 2016 subject to a three month public consultation and development of a full business case. Following the process of public consultation the full business case, including the case for change, and the clinical, economic and financial implications, will be considered by the Board on 16 January 2018.
- Mental Health and Learning Disability Service – The Transformation Programme developed 17 options for future configuration of inpatient services. Through option modelling and appraisal processes, based upon CEL 4 principles  , a preferred option was identified in partnership with staff and service users after rigorous evaluation for clinical safety, deliverability, sustainability and affordability. The preferred option was subject to public consultation between June and October 2017. Seven boards and committees across the IJBs and NHS Tayside will scrutinise the final report, supporting evidence and recommendations arising from the public consultation and offer any additional comments to Perth and Kinross IJB, who will consider final approval of the preferred option at their meeting on 26 January 2018.
In support of the delegation of financial accountability, changes have been introduced to the regular financial statements. The changes are aimed at ensuring that budgets are understood and owned by budget holders, with responsibility for operating within available resources devolved to an appropriate level.
The service plans will be further developed by early January, including identification and risk assessment of the actions required to achieve financial balance during 2018/19. These draft plans will be subject to review and scrutiny by the senior review panel in January 2018. The outcome of these review and scrutiny meetings will be a detailed financial plan for 2018/19 which will be presented to the Finance and Resources Committee and discussed with the Scottish Government Health and Social Care Directorate – Director of Finance on 18 January 2018. The financial plan for 2018-19 will thereafter be presented for consideration by the NHS Tayside Board at the end of February 2018."
The actions set out above in the Board's self-assessment, are considered by the TST to meet the requirements of recommendation 2. The implementation of the Board's newly developed Business Planning and Budgeting ( BPB) process, highlighted in our September Progress Report is now underway. It is due to be completed by the end of January, in time to inform the preparation of the Board's forward plans for the financial year 2018/19 and beyond.
A wide range of information has been provided to support the service level work which has been collated to provide the Board level plans, this includes using benchmarking to identify areas for constructive challenge. The draft outputs from the process, which have been shared with the TST, provide assurance that these will provide a sound foundation for this wider planning process.
As with the previous recommendation, it is not yet possible to see the completed picture or assess the effectiveness of the BPB programme as the robustness of the projections it produces will not be visible until well into the next financial year. We also acknowledge that the effectiveness of this process will be dependent on: services being able to think innovatively about new delivery mechanisms; supportive challenge from Finance and HR; and collaborative working with partnership colleagues. This is not likely to be in place consistently across all services for the first year of this approach.
Looking forward, NHS Tayside must also ensure that the financial planning process clearly links into and informs the development of the Integrated Clinical Strategy ( recommendation 3) and the management of key resource areas such as workforce ( recommendation 4) and medicines management ( recommendation 5) which are discussed further in the relevant sections.
TST rating in September 2017 = Amber
TST rating in January 2018 = Green