The Trust is committed to sound financial management throughout the organisation, enabling it to meet its statutory duty of achieving break even. The objective is to maintain spending within budgets, achieve its Cost Improvement Plan (CIP) and enable the Trust to be successful in its application to be a foundation trust.
The Trust approached this task through various routes: the Trust has fully developed a Long Term Financial Model (LTFM) which is fully integrated with the Integrated Business Plan (IBP) of the Trust. The LTFM is a fully operational ‘live’ model which has been kept up-to-date since 2006/07. It is used as an operational monitoring tool and is to the standard required by Monitor.
The LTFM forecasts the future five years which enables projections to be examined and action taken where needed. It improves the financial planning of the Trust, decreasing the risk of not achieving financial balance in the future. The Trust’s financial monitoring systems, including the LTFM, have been reviewed as part of the historic due diligence regime of Monitor and are considered robust. Monthly monitoring against these plans is undertaken by the Trust’s Finance and Performance Committee (includes all Trust Board members), which has ensured that firm control is exercised.
For many years spending has been contained within budgets, reflecting the strong financial management arrangements in place. This includes training of budget managers and financial reporting to budget holders. Financial training was examined and all budget holders were contacted in order to provide training and refresher courses for budget managers.
An intense programme of budget training was undertaken. This was provided in groups and one-to-one where appropriate. The Trust also examined the methodology of providing training, discussing options with stakeholders. As a result the Trust has purchased on-line training through the HFMA Introductory Certificate in Healthcare Finance in England, enabling managers to undertake training in an environment more appropriate to their needs, and also providing a recognised certificate. This gives the Trust a level of confidence in the training being provided.
The financial reporting package to Clinical Units was expanded during 2007/08 to take into account requirements of stakeholders and also to ensure that appropriate information is available in a timely manner to ensure budget managers are given the tools to enable them to exercise strong financial management.
The Trust has introduced a CIP monitoring tool that encompasses project management, monthly monitoring and benefits realisation reporting. This monitoring tool enables a business focused approach, effective monitoring of income and cost, clarification and agreement of financial savings and tracking of progress and benefits of cost improvement plans. The tool has helped develop a culture where ideas translate into action, improving efficiency and reducing costs.
The Trust has achieved a high level of surplus in 2007/08 – £10.5 million. Due to the wide spread clinical involvement in financial monitoring and the CIP process. The CIP documents are maintained and kept up-to-date. Participation in financial monitoring is more wide spread which is evidenced by the level of requests for information from the finance staff and the regular meetings that take place between finance staff and budget managers.
The clinical management structure is working more closely with the finance department in areas of financial management and CIP. The benefits of strong financial management and control are widely understood throughout the Trust – in applying for foundation trust status and being able to invest and develop services.