The Trust is one of the largest mental health trusts in the country with operating expenses of £283 million in 2008/09. Each year since its formation, it has had a large cost improvement programme (CIP).
The Financial Strategy and Annual Plan was presented to the Board in March 2008 and the Trust planned CIP savings of £9.7 million in the 2008/09 financial year.
Through the summer of 2008, the Trust monitored the changing external financial climate. In the autumn it undertook a detailed mid-year review of its Financial Strategy to update the Audit Committee and the Board and to ensure that any known changes since the production of the original strategy earlier in the year were reflected in its plans.
The review formally reported to the Audit Committee in November 2008 and focused on:
- The difficulties faced during the first six months of the year and the actions put in place by management where directorates were not performing in line with plan.
- An update on the efficiency programme for the 2008/09 financial year, and risks highlighted to delivery by directorate.
- An updated outline CIP programme by directorate for 2010/11 and 2011/12.
- Changes to the strategic risks faced by the organisation since the Financial Strategy was presented to the Board in March 2008. This concerned areas such as inflation, income changes, skill mix and pay pressures and their overall effect on the planned I and E position for 2008/09 through to 2013/14.
- Changes required to the capital strategy as a result of slower asset sales than previously envisaged. This was due to the state of the property market, including the impact on the Trust’s cash balances.
- The effect of IFRS implementation on the Financial Strategy based on the latest guidance available at the time and the impact of bringing the Trust’s two PFI schemes onto the Balance Sheet.
The mid-year review allowed the Trust’s management, Audit Committee and Board to fully understand the Trust’s financial position using mid-year financial data and to make operational and financial decisions using up-to-date information.
The Trust went on to deliver its Cost Improvement Programme for 2008/09 two months ahead of target and achieve an I and E surplus for the year.