Annual Public Meeting 2 July 2014

Welcome and introduction Silla Maizey - Chair

Our organisation - An Arm’s Length Body of the Department of Health

Our track record •

Since 2006, we have delivered 42% efficiency improvements across our services by: - Absorbing growth and inflation - Ongoing operational improvements - Implementing new technology and - Taking on new business which exploits our existing infrastructure.

•

As a result, the NHSBSA has returned in excess of £390 million for reinvestment in care.

Our stakeholders We have number of important clients who depend upon us for delivery of services, including:

• Department of Health:

Dental, pharmacy, information, help with health costs, student, EHIC, commercial, supply chain and hosting services.

• NHS England:

Dental, pharmacy, information, HR, procurement service and hosting

• NHS Trust Development Authority:

HR service

• Health Education England:

Student services, HR service

• Health Research Authority:

HR service

Strategic context •

Ever increasing demand for health resources from a range of demographic factors and an increased prevalence of long term conditions.

•

Potentially significant increase in NHSBSA direct and indirect customer numbers and volumes of activity as the structure of our population changes – e.g. more pensioners, increased prescribing volumes.

•

More complex client base, NHS England and others, where relationships need to be developed which are centred on patients and care.

•

Delivery of recommendations from Commercial Review, complementing existing NHSBSA skills and capabilities by partnering with private sector partners under a number of potential sourcing options.

Our vision We recognise the need for innovation and solutions at-scale. We will transform not only what we deliver, but also how we deliver it, creating a new kind of collaboration across the system which is a pre-requisite for success.

Delivering the vision Our strategic framework shows what we do, how we do it and the means by which we will achieve our goals.

NHSBSA strategy 2014-19 •

Available on our website www.nhsbsa.nhs.uk/3381.aspx

Our performance 2013-14 Nick Scholte – Chief Executive

NHSBSA Annual Report and Accounts 2013/14 • Available on our website http://www.nhsbsa.nhs.uk/annual_report.aspx

NHS Prescription Services Performance review 2013/14: • Accuracy targets – Exceeded our targets set by DH.

•

Pharmacy Early Payment Scheme – Successfully implemented. By the end of March 2014 enabling over £70 million per month to be made available earlier to contractors. We were recognised for this work at the Adam Smith Awards 2014, being highly commended in the ‘Best Working Capital Management/Financial Supply’ category.

•

Cost per Prescription Item – Service efficiencies continue to reduce the cost to process each prescription item. Factoring in the improvements to accuracy and the additional 30 million items, the improvement represents a cost saving of over £1 million.

Student Services Performance review 2013/14: NHS Student Bursaries • Payments and accuracy – Delivered on average 99% timely payments to customers throughout the year with an accuracy of over 99%. • Annual Forecast of Applications – Each year we forecast the number and timing of applications received to enable resource planning and budget setting. We have achieved our target of application processing within a 5% tolerance of this forecast. Social Work Bursaries and Social Work Education Support Grant • Payments and accuracy – Delivered on average 99% timely payments to customers throughout the year with an accuracy of over 99%. • Applications – Processed all applications within the 20 day target, meeting the DH target.

NHS Dental Services Performance review 2013/14: • Accuracy targets – System issue materialised following change made to pension contribution calculations that caused drop in accuracy for the September payment to 93%. Otherwise target 99.9% payment accuracy level has been maintained. •

Dental treatment data processing – Met our data processing targets.

•

Patient Charges Recovered – Significantly increased amount of benefit eligibility checking carried out, resulting in rise in amount of patient charges recovered for NHS from £1 million in 2011/12, £2.2 million in 2012/13 to £3.4 million in 2013/14.

NHS Pensions Performance review 2013/14: • Achievement of KPI Performance - Across all measurement areas for timeliness, accuracy, contribution receipts and data quality. •

Pension Auto-enrolment - Additional administrative work associated with 126,000 new joiner uploads completed.

•

Annual Allowance - Tax relief reduction from £255,000 to £50,000. Estimated impact (as quoted by Government Actuary’s Department) was assumed to be 8,000 members, actual impact resulted in the distribution of 28,000 member pension saving statements for 2011/12 and 2012/13 tax years (predominantly High Earners).

NHS Pensions Performance review 2013/14: • Lifetime Allowance - Reduction from £1.5 million to £1.25 million. Due to varying legislation changes in particular to HMRC tax changes observed a 24% (2,488 members) increase in GPs retirement awards for 2013/14. •

Implementation of NHS Reforms – Closure of over 150 Primary Care Trusts and the creation of 211 Clinical Commissioning Groups (CCGs) and 27 NHS England Area Teams on 1 April 2013. Worked closely with Department of Health to ensure all active members are moved to the correct new organisations and any outstanding data issues resolved.

•

Data quality improvement initiative – Inaccurate or incomplete records returned to the employer at source for correction and resubmission. Resulted in significant improvements in data quality.

NHS Pensions Performance review 2013/14: • Data Record Accuracy – This enabled successful valuation to be undertaken as a result of data records reflecting completeness of 97.6%. •

Increased contributions Year 3 – Delivery of the final year of a 3 year review of Pension contribution increases.

•

Fixed Protection 2014 – Members with fixed protection can fix their lifetime allowance at £1.5 million. All applications were completed by 6 April 2014.

European Health Card Insurance (EHIC) Performance review 2013/14: • Clearance and Quality – Targets met across the board.

•

Volume 2013/2014 – Increased volume during the first two quarters of the year, resulting from media publicity during this period - absorbed within our current resource and a 100% clearance rate was maintained.

•

Copycat Websites – Working closely with the Cabinet Office Government Digital Service (GDS) to identify and take action against copycat websites that charge for the service.

Help with Health Costs Performance review 2013/14: • KPIs – All targets for 2013/2014 were surpassed.

•

Workforce Planning – Increased use of Workforce Planning team resource and the ability to transfer staff resources to meet work demand has contributed greatly towards the success of Help with Health Costs Services in 2013/14 in exceeding KPIs. Progression of staff through successive grades has also enable multi-skilling.

Supplier Management Performance review 2013/14: •

NHS Supply Chain – NHS Supply Chain’s contractual KPIs for service performance (delivery on time and in full – OTIF) and debtor/creditor management were above the minimum target levels for the year.

•

Options Appraisal - Supplier Management working with DH to complete an options appraisal for end of 10 year term in September 2016.

•

Healthy Food Schemes – Team established to manage the contracts under the Scheme. Primary activities - supporting the DH to establish new contracts, and conclusion of the NHS Supply Chain procurement activity for the supply of vitamin tablets and drops.

•

Pandemic Influenza Preparedness Programme (PIPP) – Procurement strategies developed to reduce the overall cost of the programme. Combined, the strategies have to date saved the DH in excess of £35 million.

HR Services Performance review 2013/14: • NHS Transition – Supported the transition of circa 6,000 staff from over 160 Primary Care Trusts, Strategic Health Authorities and others into three new Arm’s Length Bodies (ALBs). • Growth – Created and developed a HR Shared Service provision to around 8,500 employees in only three months, delivering all essential requirements on day one. • LEAN Process Review – Reviewed operational processes to identify and eliminate waste and streamline activity, increasing use of technology and reducing paper. • Transformation of Services – Developed improved systems, designed to provide better data and insight into how and why the service is accessed and highlight any areas where communications can be targeted.

Procurement Services Performance review 2013/14: • Team Creation - Procurement Services team is part of the NHSBSA Commercial Directorate and was created in April 2013 to provide a dedicated service to NHS England to meet its strategic procurement needs. •

Workload - Manage up to 100 procurement projects at any one time and handle in excess of 100 queries each month across all areas of NHS England.

•

Team Development - Over the course of the last year, team has grown to 20 staff drawn from a diverse range of commercial backgrounds. The team is located in Leeds and Newcastle and its services and products are becoming increasingly embedded across NHS England.

Information Services Performance review 2013/14: • Pharmacy, Dental and Prescribing Reporting - Continue to work closely with NHS England to develop reports to support pharmacy and dental contract management and prescribing monitoring, providing important information to over 40,000 customers. •

NHS Reforms – Delivery of changes to systems, processes and information products to reflect the revised NHS structure and providing support to the new organisations.

Information Services Performance review 2013/14: • Enhanced Information Services – Project to modernise the prescription information services continues. Dental risk management work has been developed further with a significant programme of work having been completed to identify risky behaviours and high risk contracts. This has been complemented by a new Dental Assurance Framework report that links directly into NHS England policy. •

Specialist Services – Working closely with clients and both internal and external customers to provide insight to key projects e.g. Dental Contract Pilots, EHIC modelling, Benefit Eligibility Checks.

Annual accounts overview 2013-14 Patrick McGahon – Director of Finance

Introduction  The annual report and accounts contain the Authority’s administration accounts.  These accounts consolidate the results of the NHSBSA’s various business streams.  The Authority achieved its financial targets by recording an underspend against both Revenue and Capital Resource Limits.  The accounts were presented for audit and laid before Parliament in accordance with DH deadlines.

The two key financial statements are set out in the following slides: Statement of Comprehensive Net Expenditure Statement of Financial Position A further slide summarises capital expenditure during the year.

Statement of Comprehensive Net Expenditure for the year ended 31 March 2014 Staff Costs Non-Staff costs Less income Net operating costs for the financial year Net (gain)/loss on transfers by absorption Total Net Expenditure

2013-14 £000

2012-13 £000

72,402

67,022

152,866

657,499

(115,745) (609,206) 109,523

115,315

1,001

0

110,524

115,315

0 (90)

(100) (90)

110,434

115,125

Other Comprehensive Net Expenditure Net (gain) on revaluation of property, plant & equipment Adjustment for notional costs Total comprehensive net expenditure for the year

The total net expenditure of £110.5m resulted in an underspend of £7.4m against the Authority’s combined revenue resource limit of £117.9m. The £5.8m reduction in net operating costs compared to last year relates primarily to changes in the carrying value of Financial Assets. The significant reduction in non-staff costs and income relates to NHS Student Bursaries which from this year are accounted for by Health Education England.

Statement of Financial Position at 31 March 2014 31 March 2014

31 March 2013

£000

£000

Property, Plant & Equipment

31,201

30,011

Intangible Assets

38,182

33,268

349,747

343,631

Non Current Assets

Other Financial Assets Trade and other receivables

0

1,489

419,130

408,399

Trade and other receivables

12,980

16,147

Cash and cash equivalents

24,881

29,850

Total current assets

37,861

45,997

25,744

35,537

Total non-current assets Current Assets

Current Liabilities Trade and other payables Provisions for liabilities and charges

558

5,117

26,302

40,654

430,689

413,742

Provisions for liabilities and charges

620

764

Total non-current liabilities

620

764

430,069

412,978

426,808

409,717

Total current liabilities Non-current assets plus/less net current assets/liabilities Non-current liabilities

Assets Less Liabilities: Taxpayers' Equity General Fund Revaluation Reserve Total Taxpayers' Equity:

3,261

3,261

430,069

412,978

The main reasons for major movements in balances during the year are: – Increase in Intangible Assets – additions of £14.2m offset by amortisation of £9.1m and reclassifications of £0.2m. – Increase in Other Financial Assets – increase in the carrying value of Supply Chain Working Capital. – Decrease in Receivables, Cash and Payables – due to the transfer of NHS Student Bursary balances to Health Education England. – Decrease in Provisions for Liabilities and Charges – due to the utilisation (£2.4m) and reversal (£2.3m) of provisions, primarily the Leasehold Property Decommissioning provision.

Capital expenditure  The Authority’s net capital expenditure for the year totalled £19.2m.  This was within the Capital Resource Limit of £23.1m for the year. The major areas of expenditure were:  Pension Scheme systems developments - £3.8m  Prescription Services systems developments - £2.5m  Dental systems developments - £3.2m  Building works and Fixtures & Fittings - £4.8m  IT Infrastructure equipment - £1.5m.  The remaining £4.9m expenditure covered other IT system development, IT and other equipment purchases. There was one major disposal during the year - the former Dental Services building in Eastbourne was sold for £1.5m.

Any Questions?