The table below sets out our financial targets for 2010-11 and our performance against them:
Financial targets for 2010-11
|
Target |
Target met |
| £3.3 million (1%) surplus on income and expenditure |
Yes - we achieved a surplus of £3.3 million
|
| Keep within capital resource limit (CRL), set by the Department of Health |
Yes - we remained within the CRL of £14.1 million and generated an underspend of £2.7 million |
| Remain within the external financing limit (EFL), set by the Department of Health |
Yes - we remained within its EFL limit of £1.6 million and undershot this by £3.2 million |
| Keep within a capital cost absorption rate (CCAR) of 3.5% |
Yes - we kept within the 3.5% CCAR, resulting in dividend payments of £4.7 million |
| Meet the requirement of the public sector payment policy to settle 95% of creditors within 30 days |
No - we achieved settlement rates of between 75% (by volume) and 85% (by value) which was similar to the performance in 2009-10. |
The financial year 2011-12 presents significant financial challenges to the delivery of financial stability. The challenges include significant cost pressures from 2010-11 and new pressures in 2011-12 as well as loss of real income which is driven by national efficiency requirements and local commissioner efficiency requirements.
We are planning for a £19.3 million deficit in 2011-12 (later reduced to £14.3m after receiving non-recurrent support from south west London primary care trusts (PCTs)).
An underlying financial challenge (before the benefit of the quality and cost improvement programme) in 2011-12 of £38 million is driven by national efficiency requirements (4% and reduction in 30 day admissions), additional efficiency requirements from local commissioners (NHS Sutton and Merton and NHS Surrey), as well as managing an underlying deficit position.
We have a two-year £32 million quality and cost improvement programme (£18.7 million part year effect in 2011-12) which identifies initiatives to transform workforce efficiency, reduce length of stay, improve theatre efficiency and reduce the use and cost of temporary staff. We have engaged external support to review and maximise the delivery of the programme.
In recognition of the financial challenges facing the organisation, NHS London is undertaking a transaction to identify new partners for operating services on the Epsom site and the St Helier/Sutton sites. This process is well under way, and the preferred partners are expected to be announced in February 2012.
All income and expenditure is derived from continuing operations.
