The Associate Director of Finance for Sustainability and Transformation provided the following update:
· The system had an agreed system trajectory of £19.2m deficit. The current forecast at month 10 was a £31.7m deficit, which included a £22.3m increase in annual leave accrual. There were indications that there would be additional funding to cover some of this. The balance without the annual leave accrual was a £9.4m deficit.
· There were some risks in the financial position in relation to the elective incentive scheme which had specific targets that had not been met. There would have been a charged levied for this, but national indications suggested that they would not be applied.
· Guidance continued to be circulated on how to treat COVID-19 related costs at the end of the financial year. As this was released, forecasts would be reviewed and updated.
· The system has a capital envelope which had to be operated within. If one partner had some slippages on their capital programme, this would be managed across the system.
· The cash position was better than planned, due to a national system whereby block payments to providers were paid a month in advance and therefore they had the benefit of an additional month’s cash within the system.
· The planning round had been paused and it was likely that financial arrangements for the latter half of 2020/21 were due to roll over into the first quarter of the 2021/22 financial year. The funding envelope available for health was still to be confirmed.
· Nationally there had been £1.5bn set aside for recovery and restoration work. There would be guidance on what these additional funds would look to cover. They had made some high level estimates about the costs of restoration and recovery, which would total around £50m. This continued to be assessed and may be reduced. Upon a fair shares basis it would be likely that the allocation would amount to £20m. The allocation was expected to be circulated around the end of March.
Members made comments and asked the following questions:
· A Member raised concerns that to clear the backlog would potentially cost £50m, while there was likely to only be £20m of funding available. They asked how long it would take to clear the backlog based on the £20m figure and how the money would be used. The Associate Director responded that it would be determined by the funds available and would be a collaborative effort to pool resources to decide it would be most effectively used. The discussions on allocations remained ongoing and would form part of the planning round. It was requested that an update on this would be included at the next meeting.
· A Member asked how the additional allocations were split between trusts. In response, the Associate Director confirmed that the allocations were given to systems to manage across partnerships to enable the allocations to be clinically prioritised.
· A Member queried whether the current deficit included the CRES savings. It was confirmed that this did include any efficiency savings which had been made.
The Board NOTED the presentation.