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Foundation for the FutureAnnual report 2007/08
2
Surrey and Sussex Healthcare NHS TrustMaple HouseCanada AvenueRedhillSurrey RH1 5RH
Contact details for all the hospital sites can be found on the back cover of this report.
Telephone: 01737 768511Fax: 01737 231769E-mail: [email protected]
1. Chairman and Chief Executive Reports 3
2. Profile of Surrey and Sussex Healthcare NHS Trust 5
3. Our achievements in 2007/08 9
4. Our performance in 2007/08 13
5. Governance and the assurance framework 15
6. Our plans for 2008/09 16
7. Partnerships and valuing people 21
8. Financial review 2007/08 24
1.1: Trust financial performance from 1998/99 24
1.2: ALE ratings 2005/06 to 2007/08 25
1.3: Loan repayment schedule 25
1.4: Planned EBITDA targets for the next 5 years 26
1.5: Detail of overall income & expenditure performance 2003/04 to 2008/09 27
1.6: Trust forecast income 2008/09 28
1.7: Trust forecast cost 2008/09 28
1.8: Liquidity ratio plan in 2008/09 30
9. Remuneration report 31
Appendices
Summary financial accounts 34
Glossary of financial terms 35
Independent auditors’ report 36
Statement of Internal Control 38
Primary financial statements 46
How to contact us 52
3
It is with great pleasure that I am able to report that
the Trust has made enormous progress in the past 12
months and is now looking forward to a stable and
promising future. We have achieved a very much
improved financial position earlier than planned,
reaching breakeven in 2007/08.
This turnaround in the Trust’s fortunes has been
achieved in less than two years and is due to the
commitment, hard work and dedication of the senior
management together with the professional attitude
of all our staff. The enormous progress we have
made has seen us dramatically reduce our in-year
deficit from £28m in 2005/06 and £12m in 2006/07,
to the breakeven in 2007/08 and surpluses expected
over the next few years.
In past annual reports the picture I gave of the
Trust’s performance was bleak. But thanks to the
restructure of the Trust and changing some of the
ways we do things we can see the results in our
improved performance. After being zero-rated
and then two years as a ‘Weak - Weak’ Trust in our
Annual Health Check ratings for our use of resources
and quality of services we are now forecasting a ‘Fair
- Fair’ rating for 2007/08.
The continued development of the Trust in the past
year has seen us meeting our targets for treating
patients in A & E, starting an ambitious expansion of
maternity services to cope with the rising numbers of
births and planning a significant growth in cardiology
services. In addition we have successfully integrated
the formerly independent Redwood facility into the
main hospital.
Our achievements in improving our financial position
have led to a financial solution being agreed that
will allow the repayment of the Trust’s loan in the
next three years. To do this the Trust must continue
to look at ways of saving money to ensure that our
sound financial position continues and the surpluses
necessary are delivered.
Now we are seeing stability in the way the Trust
is run the way is clear to start planning to achieve
Foundation Trust status in 2010. All Trust staff,
the Patients’ Council and the many volunteers who
support us in so many ways all have a part to play
in the considerable work that lies ahead to further
develop the Trust’s reputation for clinical excellence
and its financial soundness.
Thanks to our stronger financial base we have been
able to invest more in our services. Refurbishment of
East Surrey Hospital is continuing, new, clearer signs
are being installed and parking is being improved.
In May 2008 we signed the contract to provide new
staff accommodation at the East Surrey Hospital.
With a strong Board taking forward exciting
developments the Trust can look forward to a more
secure future.
Roy B. DaviesChairman
Chairman’s reportTrust success paves the way to Foundation for the Future
3
4
At the end of my first full financial year with the Trust
I can look back with great satisfaction on sustained
improvement in services, good quality of care for
our patients and the financial stability that has
been achieved.
This report gives a brief outline of some of these
significant improvements, and how our staff have
come through challenging times. Their commitment
and hard work have transformed the Trust’s fortunes
from being one of the weakest Trusts in the country
just a few years ago to one that we confidently
expect will gain a fair rating in our 2007/08 Annual
Health Check to be announced in October. The
tables on page 14 show just how far we have come
in a very short time.
By balancing the Trust’s clinical work with our
efforts to achieve financial stability we have made
tremendous advances. Changes have been clinically
led in all areas, involving members of different
medical teams.
At the heart of transforming the way we do things in
A & E has been improving patient flow throughout
the hospital. Changing the way patients are
managed and moved through the hospital together
with building relationships with our primary and
social care providers have been key. Since early
February we have been ranked as one of the top
performing A & E Trusts in the country, meeting and
exceeding the national standard of seeing, treating
and admitting or discharging 98% of patients within
four hours.
We have also met the challenges of improving
maternity care through an expansion of services with
a new ward, upgrading existing areas like the birthing
pool and recruiting more midwives. For the first time
we achieved a full establishment of midwives during
the year.
There are ongoing improvements in cardiology
helping to make East Surrey, one of three cardiac
centres in Surrey, a centre of excellence. Our
investment in the expansion of the service has
resulted in the appointment of two more specialist
consultants, and a five-day-a-week angioplasty
service available to a larger number of acute heart
attack patients.
Bringing the formerly independent Redwood Elective
Centre into the Trust after five years has given us
the opportunity to provide an important additional
resource for elective surgical beds.
One of our challenges this year has been a new
computerised patient administration system, Cerner
Millennium. I want to thank staff for the way they
have worked with us to resolve issues that arose
with the changeover to a new system. It also gave
us the opportunity to introduce PACS (picture
archiving and communications system), a much
quicker computerised diagnostic system of images.
Thanks go to the Friends of East Surrey Hospital for
all the work their volunteers do for the Trust. Their
largest ever donation enabled us to buy a state-of-
the-art 64-slice CT scanner which is giving a faster,
more effective service and aiding diagnosis.
I would also like to acknowledge the help and
support of all our partners and supporters. The voice
of our patients is being heard more strongly than ever
through the Patients’ Council, which is going from
strength to strength after its first full year supporting
and improving the Trust’s day-to-day activities.
Through ‘The Patient Experience’ action plan the
Trust is working with the Patients’ Council to improve
the experience of all our patients.
The Trust can look to the future with confidence
as we work towards achieving the 18
week referral to treatment pathway
for all our patients; and build on
our Foundation for the Future
by establishing better ways of
working and continuously
improving the quality and
efficiency of the services we
provide to our patients.
Gail WannellChief Executive
Chief Executive’s reportLooking ahead to a brighter future
5
Profile of Surrey and Sussex Healthcare NHS TrustWho we are, what we doSurrey and Sussex Healthcare NHS Trust was formed
on 1 April 1998. Today it provides a comprehensive
range of acute services at East Surrey Hospital in
Redhill and a range of services at Dorking, Oxted
and Caterham Dene Hospitals in Surrey, and at
Crawley and Horsham Hospitals in West Sussex,
in partnership with the respective Primary Care
Trusts (PCTs).
In the financial year 2007/08 the Trust employed
around 2,700 staff and spent around £171m on
providing services.
During the year the Trust:
• Had 41,000 Emergency Department attendances.
• Had 43,000 unplanned (non elective) admissions
and 22,000 planned admissions.
• Carried out 200,000 outpatient consultations and
500,000 pathology tests.
• Delivered more than 4,000 babies.
• Processed 180,000 x-ray, CT, MRI and
ultrasound scans.
• Had 501 beds plus 28 maternity beds.
Our communityThe Trust serves a population of around 350,000
people living in north-west Sussex and east Surrey,
including the major towns of Crawley, Reigate
and Redhill. Its proximity to the M25 and M23
motorways and Gatwick airport means that it also
treats many people from outside the area and
from overseas.
Services are supplied across Surrey and West Sussex
County Council areas and the Trust also works
with the district and borough councils of Crawley
and Reigate and Banstead to the centre and north,
Mole Valley to the west, Tandridge to the east, and
Horsham to the south. Our services are bought
mainly by West Sussex PCT and Surrey PCT.
Our missionSurrey and Sussex Healthcare NHS Trust’s Mission is
to provide excellent healthcare to our community
by responding to their needs. The Trust Board
reviewed and updated the organisation’s mission,
values and vision in November 2007.
A technical instructor in physiotherapy working with a patient in the Redwood Elective Centre
6
Our core valuesPersonal accountability. We believe that we
are all responsible for the success, performance and
future of our hospital and community, and for the
level of care experienced by our patients.
Pride. We are proud to be associated with our
hospital and community and are loyal and supportive
of its progress and achievements.
Responsiveness. We welcome new ideas and
are open to different perspectives — by listening,
questioning and challenging the conventional.
Respect. Everyone who comes into contact with
the Trust and its services is treated with the same
level of respect and dignity.
Quality and value. We are committed to
continually improving standards and providing the
highest of value by ensuring that every penny spent
provides the maximum benefit to our community.
Involvement. We believe that everyone has
something of value to offer, and is encouraged to
participate by contributing ideas and suggestions in
their area.
Trust visionThe Trust’s vision is that by 2010 the Trust will be a Foundation Trust with an established reputation for
clinical excellence.
An advanced high-speed CT scanner costing nearly £1/2million means 3-D reconstructions of the body can be carried out in seconds to aid diagnosis
Staff nurse Alice Joseph with Nicola Roberts from Oxted and her son Frankie who was born 13 weeks premature
7
The Trust BoardThe Board of Surrey and Sussex Healthcare NHS
Trust consists of seven executive directors and six
non-executive directors. The non-executive directors
act as ‘watchdogs’ to ensure that the executive
team carries out these responsibilities appropriately.
They also chair or sit on the top-level committees
within the Trust.
The Board is responsible and accountable for
everything that happens within the Trust. It
operates within a strict remit and is responsible
for setting the Trust’s strategic direction. It
receives reports and recommendations from
managers throughout the organisation,
approves changes to services and policies, and is
responsible for managing the Trust’s finances.
The Board represents the interests of the Trust at
the highest levels and works very closely with its
partner organisations - the local primary care trusts,
the strategic health authority, local councils and the
Department of Health – in developing policy and
implementing the NHS modernisation agenda.
The Board meets regularly in public, and its minutes
and papers are made freely available, including on
its website www.surreyandsussex.nhs.uk
Non-executive Directors (NEDs)
Non-executive directors are from all walks of life and
have a wide variety of experience in the voluntary,
public and private sectors. They are all part-time.
Details of their remuneration can be found on
pages 31 to 33.
Roy Davies, Chairman
No declarations
Michael Ormerod, Vice-chairman
Chair, Woodhatch Community Association;
Chair, Action of Life; Director, 34 Wray Park Road
Residents Association Ltd; Chair, Reigate Sixth
Form College Corporation
Stephanie Morgan
Director, Crosslight Management Ltd (change
consultancy)
Yvette Robbins Director, Guideon Ltd (management consultancy);
Company Secretary in Galaxy Ltd (company
operated by partner)
David Williams Director, Grove Consulting and Interim
Management Ltd (supplier of programme director
services to London Strategic Health Authority)
Graham Curtis (from 13 August 2007)
Executive committee member, Fetcham Residents’
Association
Executive Directors
The executive directors are all full-time employees of
the Trust. Details of their remuneration can be found
on pages 31 to 33.
Gail Wannell, Chief Executive
No declarations
Patricia Davies, Director of Clinical Services
Non-executive director/trustee Age Concern,
Hounslow
Catherine Greenaway, Medical Director
No declarations
Jenny Woollett, Director of Workforce and
Organisational Development
No declarations
Andrew Hines, Director of Business Development
No declarations
Paul Simpson, Finance Director
No declarations
Irene Scott, Director of Nursing (to March 2008)
Declarations: Non-executive Director/Trustee,
Royal Hospital for Neurodisability; Board Trustee,
Florence Nightingale Foundation; editorial board
member, Nursing Times; Honorary Professor of
Nursing: Wolverhampton University, South Bank
University, Kings College, London
Mona Walker, Interim Director of Nursing
(from March 2008)
No declarations
Board members and declarations of interest
8
Each director confirms that as far as he or she is aware there is no relevant audit information of which the
Trust’s auditors are unaware and he or she has taken all the steps that ought to be taken as a director in
order to make himself or herself aware of any relevant audit information and to establish that the NHS body’s
auditors are aware of that information.
Audit & Assurance Committee
Healthcare Governance Committee
Remuneration Committee
Charitable Funds Committee
Executive Committee
Chair:David Williams
Members:Graham CurtisYvette RobbinsStephanie WilliamsMichael Ormerod
Chair:Gail Wannell
Members:All Executive Directors
Chair:Roy Davies
Members:All NEDs
Chair:Roy Davies
Members:All NEDsAll Executive Directors
Chair:Gail Wannell
Members:All Executive Directors
Directors’ membership of core committees
The Trust has a structure of formal committees beneath the Trust Board,
the core of which is illustrated in the diagram below.
Key committees
The Board Remuneration Committee
Audit & Assurance Committee
Charitable Funds Committee
Executive Committee
Healthcare Governance Committee
9
Our achievements 2007/2008
An expansion and upgrading of maternity and
paediatric services has begun as the Trust invests
in accommodation for the growing number of
women choosing to have their babies at East
Surrey Hospital.
There are six more maternity inpatient beds, a new
transitional care baby unit and two extra delivery
rooms. A new acute gynaecology assessment unit is
being established for day patients. This is being led
by the newly appointed Matron for Gynaecology.
Additional beds for neonatal and postnatal patients
will give mothers more choice and flexibility, while the
transitional care baby unit means mothers can stay
with their premature babies giving 24-hour care just
before going home. This helps with the transition
from hospital to home life.
There have been improvements in rates for women
breastfeeding, mothers who stop smoking and
repeat pregnancies among teenagers. A successful
triage system has been introduced which means
pregnant women who may not be in labour have
better access to valuable advice and support. This
gives midwives in the delivery suite more time to
give dedicated one-to-one support to all women in
established labour.
Maternity services
Tara Unwin from Earlswood, Surrey who used the birthing pool at East Surrey Hospital pictured with her family and midwife Alison Price
10
After several years of poor performance, significant
improvements in the Trust’s A & E service are now
being recognised by patients, by Surrey and West
Sussex PCTs, and nationally.
In early 2008 the Trust has started to consistently
meet the 98% (of patients attending A & E) target
for seeing, treating, admitting or discharging
patients within four hours. This was the result
of months of hard work and effort. It has meant
patients being assessed more efficiently with a
minimum of moves to the correct point of care,
whether it is for treatment in the walk-in centres or
urgent treatment centre, admission to a ward or to
be seen by a specialist.
An emergency care taskforce continuously monitors
the four-hour wait for A & E patients and ensures it
is sustained. A new on-call medical consultant helps
to fast-track patients to the appropriate area and
facilitate early discharge, while other specialists give
additional day-time medical cover. A senior manager
is on duty seven days a week to manage patient flow.
The extension of the medical assessment unit from
20 to 48 beds, and the introduction of a 12-bed
surgical assessment unit, has meant GP referrals are
admitted to this unit rather than A & E. Working
through community matrons, patients are admitted
within 24 hours to the appropriate ward.
Bed capacity in the wards has been aligned to the
restructured A & E service; and with the opening
of a new acute medical unit and extended surgical
assessment unit, delays in admission into acute beds
has reduced.
Better working relationships with the PCTs who
manage the walk-in centre means ambulance
patients are diverted to the most appropriate point
of care, greatly improving patient flow throughout
the hospital.
Emergency Department
The Emergency Department at East Surrey Hospital
11
Redwood Elective Centre
With the enormous advances made in cardiology
in recent years both nationally and locally the Trust
agreed on a radical development of its service which
will make it one of the key heart attack treatment
centres in Surrey. To do this there will be investment
of £1m in 2008/09.
Two more specialist consultants were appointed
during the year bringing the number of cardiac
consultants to six which, together with more support
staff, will improve patient flow and provide them
with the highest level of care. Consultants will also
give round-the-clock cover for patients.
The pioneering work now going on in the Trust
includes the development of a diagnostic five-day-
a-week angioplasty service, which means the very
best treatment is available to many more acute heart
attack patients. The expanded service will make East
Surrey one of the first hospitals outside London to
offer this primary angioplasty service.
The new appointments will play a key part in
the development of the Trust’s progressive and
expanding department.
With the planned expansion, patients will also
have better access to cardiac investigations, to
exercise tolerance testing and echocardiography.
The increased use of the angiography laboratory,
expanded number of angioplasties carried out and
devices implanted will, importantly, mean patients
will not have to travel to more distant hospitals.
Cardiology
The reception area at Redwood Elective Centre
Consultant cardiologist Dr. Iqbal performing an angioplasty
The Trust’s decision to take over the running from
December 2007, of the formerly independent
Redwood Elective Centre after five years means
more surgical beds are now available to elective
patients and a reduction in waiting times.
The centre’s two wards, two theatres and three
endoscopy rooms are becoming a valuable extra
resource for day, evening and weekend surgery.
There is considerable throughput of patients in the
25-bed ward on the first floor, while the 11-bed
ground floor ward will become fully functioning in
the summer of 2008.
The Trust was able to reduce the list of patients
waiting for endoscopy (a diagnostic investigation
using internal cameras) by seeing them in the
Redwood treatment rooms. All patients are now
seen and investigated within six weeks.
12
The turnaround in Trust performance in 2007/08
resulted in our achievement of financial breakeven,
marking the end of five years of serious financial
problems where the Trust was spending far more
than it received.
To provide context, those five years of financial
problems meant that the Trust accumulated a debt
of £56m, breached the formal “breakeven duty” and
was one of 17 trusts identified by the Department of
Health as ‘financially challenged’.
The achievement is clearly significant and the
contribution of all the staff in the Trust, who have
worked so hard to deliver services meeting the
performance targets within the money available,
should be recognised.
Initially the Trust had to secure a 25 year loan to
cover the £56m debt but by breaking even and
delivering improved performance (notably the 98%
A & E four-hour waiting time target) it has been
possible to agree an early repayment, with £34m
covered by non-Trust funds - subject to delivering
performance targets.
Financially these are crucial first steps towards our
aim of becoming a Foundation Trust by 2010, which
will mean securing acute hospital services for East
Surrey and West Sussex and allowing us to focus on
delivering the financial surpluses needed to reinvest
in, and develop, those services.
Please see the financial review on page 24 for more
information on the Trust’s finances and repaying
the loan.
Finance
13
Our performance 2007/2008
The journey from ‘weak’ to ‘fair’ ratings for both
quality of services and use of resources in the Annual
Health Check has been a challenge but has been
achieved thanks to the hard work and commitment
of all staff.
These are measures of Trust performance against
the Standards for Better Health, and national targets
for quality of services and use of resources carried
out each year by the Healthcare Commission. Our
predicted forecast is for a ‘fair’ rating in both quality
of services and use of resources in the 2007/08
Health Check.
The need to improve performance and balance the
finances has been the focus of a two year turnaround
programme that began with a complete restructure
of the organisation from top to bottom, with a
reformed Trust board, new clinical directors and
strengthened nursing leadership.
By changing the way the Trust operates, and with
more stability in its leadership beginning with the
appointment of Chief Executive Gail Wannell in
November 2006, the Trust’s financial position and
overall performance has improved in a remarkably
short time.
This has been achieved by focusing on the
people, systems and processes needed to drive up
performance. Again the contribution of staff should
be recognised - everyone in the Trust has played a
part in exceeding the 98% A & E four-hour wait
target since February and in improving and expanding
our maternity and cardiology services.
The Trust did not meet two of the core standards
for better health, described below.
• Standard C4C is about ensuring that all reusable
medical devices are properly decontaminated.
We met this standard in all areas except one
- having taken the Redwood Elective Centre
back into direct management on 1 December
2007, detailed expert external audit showed non
compliance with the endoscope decontamination
standard. The Trust is preparing a fast track
business case with options, to ensure compliance.
• Standard C7E states Healthcare organisations
challenge discrimination, promote equality and
respect human rights.
The Trust has declared ‘not met’ with this
standard as further work is required to embed
equality and diversity, and supporting systems, in
the Trust. The Workforce Governance Committee
will monitor progress against an action plan.
In addition, the Trust did not meet the following
‘existing’ and ‘new’ targets:
• A & E 4-hour wait – the Trust has achieved this
target week on week since February 2008.
• Maximum 26 week wait for inpatients –
weaknesses in our waiting list management
processes have now been corrected.
• 18 Weeks referral to treatment – the Trust met
two out of the three national March 2008
milestones and has plans in place to deliver the
final December 2008 targets early.
The Trusts final performance ratings for 2007/08
will be confirmed by the Healthcare Commission in
October 2008.
How the Trust has improved performance
Performance areas the Trust is continuing to improve
14
Improving quality in 2007/08
Domain
Expected Compliance
2007/08
MetIn
yearNot met
Safety 8 0 1
Clinical & Cost Effectiveness
5 0 0
Governance 4 6 1
Patient Focus 9 1 0
Accessible and Responsive Care
2 0 0
Care Environment
and Amenities3 0 0
Public Health 4 0 0
Rating: “partly met”
35 7 2
Target Rating
Maximum 26 week wait for
inpatients0 (Failed)
Maximum 13 week wait for
outpatients3 (Achieved)
Cancer 62 day target
3 (Achieved)
Delayed transfers of care
3 (Achieved)
Thrombolysis 3 (Achieved)
31 day cancer target
3 (Achieved)
Booking 3 (Achieved)
Cancelled operations
2 (Under achieved)
Rapid access chest pain
3 (Achieved)
2 week cancer target
3 (Achieved)
A&E 4 hour wait
0 (Failed)
Rating: “partly met”
26 / 33
Target Rating
Infection prevention and
control
2 (Under-achieved)
Info, screening and referral for
drug misuse3 (Achieved)
Reducing health inequality
3 (Achieved)
Reduce obesity 3 (Achieved)
Improve patient experience
2 (Under achieved)
Reduce mortality from
heart disease & stroke
3 (Achieved)
Reduce mortality from
suicide 3 (Achieved)
18 weeks referral to treatment
0 (Failed)
Emergency bed days
3 (Achieved)
Rating: “fair” 22 / 27
Core standards Existing national targets New national targets
15
Governance is the process by which the Trust is led
and managed properly, delivers what it is expected
to do and manages the risk that might prevent that
delivery. These processes are integrated into the way
the Trust operates and define its internal control,
which is formally reported in the annual accounts
(the statement of internal control).
An external review of governance arrangements was
carried out during 2007/08 which restructured the
department and established a stronger framework of
risk managers in directorates delivering patient care.
The Trust’s robust board assurance framework is
the process for managing any risks that might arise
affecting staff, patients or services and to reduce
them as much as possible. The framework describes
and rates risks, and identifies control measures that
are in place to deal with risks.
Staff who make up the Governance Team are
responsible for risk management and governance
across the Trust, and nominated risk co-ordinators in
each care group who work with senior management
to identify and assess risk. There is a clearly defined
accountability for risk management led by executive
directors and overseen by non-executive directors.
Governance and the assurance framework
Information governance is a framework for managing
information, particularly personal information of
patients and employees. It should ensure that
personal information is dealt with legally, securely,
efficiently and effectively.
The Department of Health provides the standards
and a self assessment tool-kit and Trusts’ compliance
is measured as part of the Healthcare Commission
Annual Health Check as core standard C9, which the
Trust met in the year.
There is one serious untoward incident to report
in 2007/08. This is graded as a level 5 incident
according to recent guidance (this is the highest level
risk). Details are below.
Information governance
Summary of serious untoward incidents reported to the Information Commissioner’s Office in 2007/08
Date of incident (month)
Nature of incident Nature of data involved
No of people potentially affected
Notification steps
July 2007 Unauthorised disclosure – potential unauthorised access to the Trust’s computer network by a member of staff
Under investigation
Under investigation
To be reviewed in light of investigation outcome
Further action on information risk
Surrey and Sussex Healthcare NHS Trust will continue to monitor and assess its information risks in light of the incident reported above in order to address any weaknesses and ensure continuous improvement of its systems. This particular case is the subject of a police and internal investigation that is ongoing.Planned steps for the coming year include an audit of Trust information systems and processes.
16
Our plans for 2008/2009
The Trust’s vision is to become a top performing
organisation that will enable us to achieve
Foundation Trust status with an established
reputation for clinical excellence by 2010.
Plans to place the Trust among the highest
ranking Trusts in the country with more financial
independence and offering the very best level of
care to patients have been made possible by our
turnaround in performance.
The Trust board has agreed a 12-month delivery plan
of key strategies that will support the enormous
amount of work to be accomplished whilst
improvements in patient care are continued. The
clinical strategy, achieving the savings plan, patient
experience strategy, nursing and midwifery strategy
and workforce strategy are just some of the goals
that staff will seek to achieve.
Patients should notice the difference through
better services, improved processes and faster
treatment times.
For 2008/09, objectives have been set to reflect
the shift from financial turnaround to consolidation
and emphasise patient experience and our position
as the local hospital for our community.
Foundation for the Future
The diagram shows how our organisational culture and personality (Values and Mission) fit together with what we will deliver in terms of our Vision and Corporate Objectives and the tools we will use to achieve this. It also illustrates how the Assurance Framework underpins everything we do.
The way we work / who we are (Personality / culture and behaviours)
Trust values• Personal accountability
• Pride
• Responsiveness
• Respect
• Quality & value
• Involvement
Trust MissionTo provide excellent healthcare to
our community by responding to
their needs.
What we will deliver (what we exist to provide)
VisionBy 2010 the Trust will be a
Foundation Trust with an established
reputation for clinical excellence.
Corporate objectives• Improve the patient and carer
experience
• Achieve higher performance
ratings and meet legal and other
obligations
• Improve staff engagement, morale
and productivity
• Enhance education, training and
research
• Develop the Trust’s marketing
capability
• Maximise the benefits of new
technology
• Improve and sustain the Trust’s
financial position
How we will do it (enablers / drivers / tools)
Operational plan
(12month delivery plan)
Supported by:Clinical strategy
Marketing strategy
Patient experience strategy
Business planning (12 month cycle)
Delivering the savings plan
(previously Turnaround)
Workforce strategy
Finance plan
IT strategy
Communications & PR strategy
Estates strategy
Governance strategy
Nursing and midwifery strategy
Infection prevention and control
strategy and Action Plan
Assurance framework
17
The Trust has a zero tolerance approach to all
healthcare associated infection and has a dedicated
taskforce that focuses solely on driving down
infections, particularly MRSA and Clostridium difficile.
Importantly, the Trust met the government’s end of
March 2008 target for deep cleaning all clinical areas.
MRSA reducing
During 2007/08 the Trust continued to see a
reduction in the number of MRSA bloodstream
infections, achieving the national target of a 50%
reduction in MRSA infections compared with 2003/04
when recording began. The Trust did, however,
narrowly miss its locally agreed target with the SHA –
recording 22 MRSA bloodstream infections against a
target of 19.
Rapid action taskforce set up
The Trust continues to work on reducing its
Clostridium difficile rates, which has proved
challenging. Towards the end of 2007 incidences of
Clostridium difficile began to increase and a rising
trend was identified from our data collection and
analysis. In response to this we set up a Rapid Action
taskforce and rates are now reducing in line with our
zero tolerance policy for infection.
Work to further increase effective hand hygiene and
adherence to the Trust uniform policy of ‘bare below
the elbow’ have been key actions in the Trust’s vital
work to manage infection. In addition, the Trust’s
patented programme of Saving Lives Aseptic Skills
for Health (SLASH) is being re-launched to further
support the use of aseptic techniques for IV and
urinary catheter insertion by all clinical staff.
Audits, spot checks and training ensure that all staff
adhere to the appropriate infection prevention and
control measures in their day-to-day roles and results
of audits are published throughout the Trust.
Effective management of infection
Overall, the Trust recognises it needs to strengthen
its isolation facilities and plans are in place to create
a dedicated isolation ward. There are, however, clear
and effective processes to very quickly isolate an
outbreak of infection by ensuring access to affected
areas is restricted to essential staff only. This means
we need to work more closely with patients and
visitors to ensure they observe all hygiene procedures
so we can continue to reduce the risk of spread and
duration of an outbreak.
Training has provided an increased awareness of the
importance of antibiotic management in reducing
the risk of Clostridium difficile infections. A full
time pharmacist is being appointed to support this
through appropriate antibiotic prescribing.
If an area is affected by either MRSA or Clostridium
difficile the Trust has a Rapid Response cleaning team
that will immediately carry out a full and thorough
deep clean, often with sterinis, a revolutionary
decontamination system, that uses vaporised
hydrogen peroxide which eradicates Clostridium
difficile spores. Plans are also in place to create a
decant area that will further support this.
During 2008/09 a number of further measures will
also be reinforced, including the phased introduction
of disposable plastic curtains.
Infection prevention and control
18
The Trust is working hard to achieve the challenging
national 18 week targets for referral to treatment
for all patients. Most of the Trust’s patients are
already being seen quicker than they have in the
past. Nearly every member of staff is involved
in further streamlining and improving working
processes and practices and co-operating closely
with partners and patients to deliver this goal.
Why 18 weeks?
The 18 week referral to treatment pathway is about
ensuring all patients receive high quality elective
care without any unnecessary delay. It applies to
consultant-led care, setting a maximum time of 18
weeks from the point of initial referral up to the
start of any treatment for all patients where it is
clinically appropriate and in a location convenient
to them.
Benefits for patients
Unnecessary delays are not good for patients, or for
the Trust, so by delivering care within 18 weeks and
closer to home patients will receive faster access
to treatment and care. Less time will be spent in
hospital for tests and treatments as more services
are provided in community settings and by GPs.
Benefits to staff
Our staff will also benefit as ultimately there will be
a greater flow of better informed patients. Faster
provision of treatment and care should also result
in less emergency activity caused by long waits, and
there will be the opportunity to carry out more day
case surgery.
The Trust has achieved two of the three national 18
week referral to treatment milestones. The March
2008 milestone for delivering 18 week pathways
for 90% of non-admitted patients was met,
also the six-week maximum wait for diagnostic
treatment. The milestone for delivering 18 week
pathways for 85% of in-patients was missed,
and the Trust achieved the pathway for 50% of
patients. It is a key aim for the year ahead that the
18 week target for all patients will be delivered by
December 2008.
18 weeks
Orthopaedic surgeon, Dr. Ram performing knee surgery at Crawley Hospital’s day surgery unit
19
Estates
The new Chemotherapy Day Suite at East Surrey Hospital
During 2007/08 the Trust spent £18m on
capital projects, including the purchase back of
the Redwood Elective Centre and a significant
refurbishment programmes. The programme
of clinical area improvement will gather more
momentum in 2008/09, including a concentrated
effort to improve bathrooms and toilets.
This supports the Trust drive to control infection, a
key priority in the estates strategy, which also sees
plans being developed for an isolation facility.
Major access improvements to East Surrey Hospital
are underway, including the new chemotherapy
day-suite and refurbished Godstone ward for
cancer patients. The bus stop area at the west
entrance is being changed to allow larger and
faster buses and make it easier for passengers
getting on and off. Repairs to access roads have
been carried out and repairs and remarking
to the public and staff car parks will continue
during 2008. External signs at the hospital have
been upgraded.
Refurbishment of the main walkways in East Surrey
Hospital is being completed and new, clearer signs
will be installed throughout the hospital during
summer 2008.
In May the Trust agreed the contract to provide
new staff accommodation at East Surrey Hospital
with A2 Housing Solutions Ltd, a leading registered
social landlord. The contract will see significant
new build and complete refurbishment of existing
accommodation to convert what is largely an
outdated hostel configuration into one and
four-bedroom flats at affordable rents and Trust
staff getting first choice.
The contract is a “sale and leaseback” so the
Trust receives a significant capital receipt and, in
35 years, the return of the accommodation to
the Trust.
20
Delivering the Trust Savings Plan
Note: John Horan is not a Board member and is not listed in the remuneration report.
Executive Committee
Savings Delivery Group
Workstream 1
Workstream 2
Workstream 3
Workstream 4
Workstream 5
Workstream 6
ProcurementNursing
Productivity
Specialty
Productivity
IT
Transformation
Infrastructure
and Support
Marketing
& Strategic
Development
Paul Simpson
- Director of
Finance
Mona Walker
-Director of
Nursing
Patricia Davies
– Director of
Clinical Services
John Horan -
Director of IT
Jenny Woollett
- Director of
Workforce &
OD
Andrew Hines
- Director
of Business
Development
Achieving the financial surpluses over the next three years which will be needed to make our loan
repayments will be a major challenge. We believe savings of £8.7m can be found in the year ahead
and to achieve them a comprehensive savings plan has been drawn up across the organisation.
A steering group chaired by the Chief Executive will monitor progress weekly against this huge
challenge. Additionally, staff across the Trust are committed to finding further savings and prove
the Trust is a leading provider of ‘patient choice’ and acute services.
21
Partnerships and valuing people
Over the past year the Trust has continued to work
closely with patients, the public, community groups,
stakeholders and staff.
The Patients’ Council has gone from strength to
strength since it was set up in January 2007. The
members and three Trust representatives meet monthly
and the chairman has a seat on the Trust Board.
Members have contributed to the improvement and
decision-making of ongoing services.
Through close working with the Trust plans to make
the patient experience better have been achieved and
members are now actively involved in developing the
Patient Experience action plan.
Among the issues they are looking at are:
• The environment
• Customer care
• Communication
• Recruitment
• Monitoring and measuring
• Standards of care
• Volunteers
The Patients’ Council initiatives include running
regular hand-washing exercises in the entrance
areas of East Surrey Hospital to demonstrate
the importance of correct hand washing in the
prevention of infection.
A group of members have started ward observation
exercises, when patients are asked for their views
on what their stay in hospital has been like and
information fed back to the Trust. As a result of
information gained from the Patient Experience
Seminar, the Patients’ Council is keen to see an
e-tracking system piloted that will allow patients to
provide their own feedback.
Patients’ Council and Patient Experience Group
Patients’ Council
Roger Alexander (Chair of the Patient’s Council in 2007/08) with Patients’ Council members Barbara Harling and Frank McNamara
22
Working with partners Closer partnership working with social care and
Primary Care Trust teams has resulted in better
management of the number of emergency
admissions and a big increase in patients being
discharged to continue their care in a more
appropriate community setting.
Our major efforts during the year to improve A & E
performance resulted in it being among the top
performing Trusts in the country from February. This
was achieved through working with Surrey PCT, who
run the walk-in centre at East Surrey Hospital’s A & E
department, and West Sussex PCT, who manage the
urgent treatment centre at Crawley Hospital, to
assess patients on arrival and if possible give them
treatment on the spot. The co-operation of
ambulance colleagues to bring patients to the right
locations was also key.
Through the support of social care teams more
patients, such as those patients needing treatment
following falls, are sent home to be cared for.
Working together with ward multi-disciplinary
teams and PCT and social care partners the Trust has
also dramatically reduced the number of delayed
discharges from 80 to 20 a day. Patients medically
fit to be discharged but needing ongoing care and
support now leave hospital as soon as that care and
support has been organised for them in their home
or community setting.
Primary Care Trust
Surrey
Primary Care Trust
West Sussex
NHS Trust
South East Coast Ambulance ServiceNHS Foundation Trust
Surrey and Borders Partnership
ThamesDoc
23
The Trust is proud of its skilled and knowledgeable
workforce. During the year we have focused on
ensuring that each member of staff has a constructive
discussion with his or her manager and that each has
a personal development plan.
Providing training and ongoing professional
development for staff has also been a high priority.
Many more staff responded to the 2007 national
staff survey and gave a more positive feedback
than they did in 2006. Areas of improvement
were training, with 81% of staff receiving training,
learning or development to help them do their jobs
better, a score that put us among the top performing
acute trusts in the country. The Trust also scored
well in staff saying they worked well in a structured
environment, had completed performance appraisals
and had well designed jobs.
Although the Trust was not compliant with
the Annual Health Check standard in 2007/08,
there has been significant progress on equality
and diversity.
With the formation of the new national Equality
and Human Rights Commission during the year
we published an Equality, Diversity and Human
Rights Strategy for 2008 – 2011, and incorporated
human rights into all our policies. We also
published our Gender Equality Scheme and have
made significant progress with both the Disability
and Race agendas.
Developing staff
Equality and diversity
In 2007/08 the Trust received a total of 566
complaints, an increase of 20% on the previous year.
We also received 131 written compliments, a small
increase on the previous year, plus many others that
went unrecorded.
The proportion of responses to complaints sent on
time decreased slightly, from 49% to 48%. Five
complaints were referred for review to the Healthcare
Commission.
As a result of some of these complaints the Trust has:
• Increased the number of doctors, matrons/senior
nurses on duty over weekends.
• Improved the layout and access routes for patients
in A & E.
• A senior doctor or consultant holds daily ward
discussions on all patients with a senior nurse
to give a more joined-up and regular clinical
assessment.
• The ante-natal day unit is now open seven days a
week, staff numbers have doubled, an appointment
system is in place and the unit is staffed by a
dedicated team.
The Trust offers the support of the Patient Advice
and Liaison Service (PALS), where concerns may be
resolved informally. If this is not possible the Trust
ensures that advice and support is available from the
Independent Complaints Advocacy Service (ICAS),
offers a local resolution and independent review
and the right for the complaint to be referred to the
Healthcare Commission.
Complaints and compliments
Staff on the Trust’s patented Saving Lives Aseptic Skills for Health (SLASH) training course
24
Financial review 2007/08
2007/08 saw a turning point in the Trust’s finances,
breaking even for the first time in five years. Coupled
with its service performance and forward financial
plan this has allowed the Department of Health to
agree terms for the early repayment of the amount
outstanding on our £56 million long-term loan.
This loan from the Department of Health has arisen
in 2006/07 following five years of serious financial
problems and was required for us to remain viable.
The Trust has also breached its statutory breakeven
duty because it had not balanced past deficits with a
matching surplus in the last five years. This led to the
external auditors issuing a section 19 report to the
Secretary of State in March 2008.
The Trust’s income and expenditure (I&E) position
(expressed as the net reported position (the line)
and the recurrent underlying position (the bars)) is
illustrated in the chart below.
As part of its Forward Financial Plan the Trust will now
generate matching surpluses over several years, helping
to meet part of the loan repayment agreement.
The establishment of a stable Trust management
team and the appointment of a permanent finance
director in 2007/08 have also contributed to the Trust’s
improving financial position.
This improvement is also shown in the ratings used
by auditors (the Auditor’s Local Evaluation or ALE) to
judge how the Trust uses its resources (which provides
the basis of the “use of resources” rating in the Annual
Health Check). These ratings are shown on page 25.
The year in context: financial turning point
1.1: Trust financial performance from 1998/99
Income & Expenditure Position (Recurrent & net)
1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09
Recurrent surp/(def) 0.9 (5.0) (4.6) (0.2) (0.0) (12.8) (26.4) (27.8) (12.2) (2.6) 8.5
Net surp/(def) 0.9 (5.0) (4.6) (0.2) 6.7 (4.1) (26.4) (10.8) (12.2) 0.0 7.0
10.00
5.0
0.0
(5.0)
(10.0)
(15.0)
(20.0)
(25.0)
(30.0)
(35.0)
(£m
)
adverse
Net surp/(def)
Recurrent surp/(def)
25
These describe a combination of performance measures, such as achieving breakeven, and measures of how the
Trust manages itself financially, such as how it sets and manages its budgets and what it does to deliver better
efficiency from the way it runs itself. The improvement from past years is described in the table below.
1.2: ALE ratings 2005/06 to 2007/08
1.3: Loan repayment schedule
* subject to final Healthcare
Commission confirmation in
October 2008.
ALE uses a rating of “1”
(inadequate) to “4”
(performing strongly).
“2” is adequate.
Auditors local evaluation (ALE) ratings
2005/06 2006/07 2007/08*
Financial reporting 1 1 2
Finanancial management 1 1 2
Financial standing 1 1 2
Internal control 1 1 2
Value for money 1 1 2
Overall use of resources weak weak fair
Loan repayment plan2007/08
(£m) 2008/09
(£m) 2009/10
(£m)2010/11
(£m) 2011/12
(£m)
Loan outstanding (55.9) (53.7) (20.7) (4.8) 0.0
Conversion to PDC 26.0 8.0 0 0.0 0.0
Trust repayment 2.2 7.0 7.9 4.8 0.0
Loan carried forward (53.7) (20.7) (4.8) 0.0 0.0
Surrey and Sussex Healthcare was one of 17
trusts formally described in 2007/08 as ‘financially
challenged’ by the Department of Health because
of its past deficits and the amount of debt it owed.
Depending on performance that categorisation
is expected to be lifted in 2008/09 and the Trust
is one of several trusts that now has a proposed
solution to achieve this, notified in march 2008.
This covers (a) the loan repayment and (b) the
Trust’s overall financial plan. The loan will be repaid
through a combination of cash from the Trust and
from the Strategic Health Authority (SHA).
A ‘financially challenged trust’ and repaying the loan
The loan is not being written off as that would be unfair to other Trusts living within their means or coping
with smaller debts. The transactions take place on the balance sheet with Trust surpluses providing cash to
reduce the loan and the external payments seeing the loan (debt) replaced with public equity capital (called
public dividend capital).
26
The Trust is now moving out of Turnaround and must consolidate its position.
The Trust’s five year Financial Plan is based on delivering EBITDA (earnings before interest, tax, depreciation
and amortisation – the operating surplus that is the engine generating the Trust’s financial strength) of around
8% of income consistently over 5 years by maintaining current levels of efficiency. The step change required is
illustrated in the chart below.
Looking forward
With the Trust breaking even in 2007/08 it can deliver
this level of EBITDA because it will have the benefit of
an extra £6.5m income as the final year of transition
to “payment by results” ends, and by covering cost
pressures with an £8.7m savings plan the benefit can
be rolled forward as a surplus. That will then be used
as the Trust’s contribution to its loan repayment.
The Financial Plan takes into account relevant service
changes, additional 18 week target income/costs,
expected PCT demands and provides a contingency
reserve of £2m in 2008/09, reducing in future years.
The Financial Plan’s aims are:
• Efficiency: doing more for less – emphasis on
reducing corporate overheads – not operational
clinical services;
• Maximising income: getting paid for all the
work done;
• Planning: looking forward.
EBITDA = earnings before interest, tax, depreciation and amortisation PDC = public dividend capital
1.4: Planned EBITDA targets for the next 5 years
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
(2.1) 12.7 15.3 17.6 16.7 16.8 17.1
20.00
15.0
10.0
5.0
0.0
(5.0)
(£m
)
EBITDA
Earnings before interest, tax, depreciation and amortisation (EBITDA) performance
27
Analysis of financial data
EBITDA = earnings before interest, tax, depreciation and amortisation PDC = public dividend capital
RAB = resource accounting and budgeting – this adjust corrects I&E positions after RAB was withdrawn for Trusts
Income & Expenditure:EBITDA presentation
2003/4(£m)
2004/5(£m)
2005/6(£m)
2006/7 (£m)
2007/8 (£m)
2008/9 (forecast)
(£m)
Income from activities reported 131.3 129.6 121.6 143.5 153.4 158.0
RAB adjustment (prior years) 4.2 29.5
Net income from activities 131.3 133.8 151.1 143.5 153.4 158.0
Other operating income 13.2 24.1 22.1 19.8 18.1 16.5
Operating expenses (139.1) (173.8) (171.4) (166.2) (158.9) (157.1)
EBITDA (operating surplus/(deficit))
5.4 (15.9) 1.8 (2.9) 12.6 17.4
Net interest and other items (0.1) (0.1) 0.6 (2.2) (1.1)
Depreciation (5.4) (6.5) (7.0) (6.8) (5.1) (5.4)
Impairments (0.9) (3.9) (2.0)
PDC dividends payable (4.0) (4.1) (4.6) (3.0) (1.4) (1.8)
NET SURPLUS/(DEFICIT) (4.1) (26.5) (10.8) (12.1) 0.0 7.0
Non recurrent income adjustments (8.7) (17.0) (2.6)
Underlying surplus/(deficit) (12.8) (26.5) (27.8) (12.1) (2.6) 7.0
1.5: Detail of overall income & expenditure performance 2003/04 to 2008/09
The key financial statements from the 2007/08 accounts are in the appendix.
The table below provides a fuller summary of the Trust’s income and expenditure performance since 2003/04,
and the plan for 2008/09.
28
In 2008/09 the Trust’s income is forecast to total £174m and is described below.
The vast majority of Trust income comes from NHS
contracts for clinical care – including the market
forces payment which provides the local adjustment
to cover economic costs in Surrey. Together, this
totals over 90% of Trust income.
The Trust gets this contract income from the
main PCTs, with Surrey and West Sussex PCTs
contributing the majority.
Other income includes funding for training and
recharges between local NHS organisations for
services provided by the Trust to them (such as
pharmacy and pathology services).
Costs in 2008/09 are forecast to total £167m, split
as described in the table and chart below.
Income and costs forecast in 2008/09
1.6: Trust forecast income 2008/09
1.7: Trust forecast cost 2008/09
Income: 2008/09 Forecast (£m)
NHS contract income
Surrey PCT 67.1
Sussex PCTs 67.1
Croydon PCT 1.6
Other PCTs 2.5
Market Forces Factor (MFF) 19.7
Sub total: contract income 158.0
Impairment funding 2.0
Other operating income 14.5
Total Income 174.4
Cost: 2008/09 Forecast (£m)
Operating costs
Pay costs 107.5
Non pay costs 49.6
Sub total: operating costs 157.1
Capital charges 7.3
Impairment 2.0
Interest paid 1.5
Interest received (0.4)
Total costs 167.5
NHS contract
income 79.28%
Other income
8.28%
Impairment
funding 1.15%Market Forces
Factor 11.29%
Pay costs 64.22%
Non-Pay costs
29.60%
Capital charges 4.34%
Impairment 1.20%
Net interest
paid 0.65%
29
The majority of Trust costs are for staff pay, as in
other acute NHS Trusts.
Interest is the only aspect of the Trust loan that
appears as a cost to the income and expenditure
account. The core principal appears on the balance
sheet and reduces as the repayments are made.
Interest charged to I&E reduces accordingly, and
there is a £1m reduction in interest because of the
new loan repayment plan in 2008/09 compared to
2007/08.
The Trust had no cash problems in 2007/08 and does
not expect any in 2008/09.
However, the cash balance does not provide the
best description of the Trust’s financial strength and
the amount of working capital is a better indicator.
Working capital describes the resources available
in the balance sheet to cover forward costs – the
difference between money due into the Trust and the
debts the Trust owes, and includes available cash. On
the balance sheet working capital is described as “net
current assets/(liabilities)”.
With the substantial deficits of past years, the Trust’s
balance sheet has been losing working capital.
To survive financially in 2006/07 the Trust had to
borrow cash totalling £56m as it could not pay
its costs any other way. This helped the Trust to
control its balance sheet better but the loan did not
allow any improvement in working capital. With
cash payments for interest and loan principal being
made and no surplus to provide new cash, that cash
has had to come from reducing working capital
still further.
The most useful judgement of the amount of
working capital is a liquidity ratio – liquidity describes
those balance sheet resources that are easily
accessible quickly and so excludes anything that
requires complicated action to sell, like fixed assets
or stock. The ratio used by the Trust removes stocks
from the working capital total and is calculated as
follows:
{Working capital / spend in next period} x
days in that period
This describes the Trust’s capacity to cover its forward
liabilities, as measured by estimated spend in the next
period. A ratio >5 days (ie: five days of forward costs
can be covered from the balance sheet) is the base
standard used by the Trust.
Balance sheet aspects - working capital and cash
30
In summary, the Trust is remaining solvent because
of the loan and through tight control of its
payments. Apart from avoiding interest payments,
a key reason for repaying the loan as quickly as
possible is to allow the surpluses to be used sooner
rather than later to improve working capital and
therefore give the Trust back the balance sheet
strength it requires.
The Trust’s payment of bills within 30 days (the
Better Payment Practice Code target) has improved
during the year because this cash support avoids
managing working capital through delayed
payments quite as strictly as before, but overall the
Trust is performing below the target of 95% with an
average of about 74% of its (total, NHS and non-
NHS) bills paid in this time.
CapitalThe improved financial position of the Trust allows
increased investment.
In 2006/07 the gross capital expenditure was
£7.6m. In 2007/08 the Trust’s gross expenditure
totalled £18.3m (which it should be noted
included the purchase back, for £4m of the
Redwood Elective Centre) and in 2008/09 the
intention is to spend at least £13m.
The section earlier on estates set out the thrust
of the Trust’s capital programme in terms of the
works required (investing in measures to improve
infection control, refurbishing wards, improving
the fabric of the hospital and making the site
accessible).
The Trust has also contracted with A2 Housing
Solutions Ltd, a leading registered social landlord,
to re-provide staff accommodation at East Surrey
Hospital. As part of the deal, Fairfield House at
Crawley has been sold to A2 and Canada House
transferred on a sale and leaseback arrangement
securing an additional capital receipt. These
capital receipts form the basis of the Trust’s capital
budget in 2008/09.
Day
s C
ove
r
Liquidity ratio - days cover
benchmark targetadverse
10
0
-10
-20
-30
-40
M01
M02
M03
M04
M05
M06
M07
M08
M09
M10
M11
M12
The chart below shows how far below the target the Trust will be in 2008/09,
but with a small but discernible improvement as the year passes.
1.8: Liquidity ratio plan in 2008/09
Months
31
This report includes details regarding senior managers’ remuneration in accordance with Section 234b and
Schedule 7a of the Companies Act.
The Trust has established an Appointments and Remuneration Committee to advise and assist the Board in
meeting our responsibilities to ensure appropriate remuneration, allowances and terms of service for the
Chief Executive, Directors and other senior managers. Membership of the committee consists of the Trust
Chair, all Non-Executive Directors and also the Chief Executive (except in relation to her own terms and
conditions). The Chief Executive and Directors remuneration is determined on the basis of reports to the
remuneration committee taking account of any independent evaluation of the post, national guidance on
pay rates and market rates. Pay rates for other senior managers is determined in accordance with Agenda for
Change job evaluations and central NHS review body pay awards. Pay rates for the Chair and Non-Executive
Directors of the Trust are determined in accordance with national guidance. The committee is advised on
these matters by the Chief Executive, Director of Workforce and Organisational Development or external
advisors as appropriate.
The Trust does not operate any system of performance related pay and no proportion of remuneration is
dependant on performance conditions. The performance of Non-Executive Directors is appraised by the
Chair. The performance of the Chief Executive is appraised by the Chair. The performance of Trust Executive
Directors is appraised by the Chief Executive. Annual pay increases are implemented in accordance with
national pay awards for all other NHS staff.
The Chief Executive and all substantive Directors, excluding the Director of Nursing who is on an interim
contract, are on permanent contracts as at 31 March 2008 and subject to six months notice period.
Termination arrangements are applied in accordance with statutory regulations as modified by national NHS
conditions of service agreements (specified in Whitley Council/Agenda for Change), and the NHS pension
scheme. Specific termination arrangements will vary according to age, length of service and salary levels.
The Appointments and Remuneration Committee will agree any severance arrangements. Recruitment for a
substantive Director of Nursing will be completed during summer 2008.
Tables attached show details of salaries, allowances and any other remuneration and pension entitlements of
senior managers. No significant awards have been made in the past to senior managers.
Gail Wannell
Chief Executive
20 June 2008
Remuneration report
32
Remuneration report tablesSalaries and allowances of senior staff
Executive Directors 2007-2008 2006-07
Salary (bands of £5000)
Otherremuneration
(bands of £5000)
Benefits in
kind(rounded
tonearest £000)
Salary (bands
of £5000)
Other remuneration
(bands of £5000)
Other remuneration
(bands of £5000)
Gail Wannell - since 6 November 2006
Chief Executive 135-140 - - 50-55 - -
Catherine Greenaway - since 1 April 2007
Medical Director 25-30 135-140 - - - -
Jennifer Woollett - since 1 August 2006
Director of Workforce & OD 85-90 - - 55-60 - -
Andrew Hines - since 16 April 2007
Director of Business Dev 80-85 - - - - -
Patricia Davies - since 4 June 2007
Director of Clinical Services
60-65 - - - - -
Paul Simpson - since 5 December 2007
Director of Finance 30-35 - - - - -
Mona Walker - since 18 February 2008
Interim Director of Nursing 15-20 - - - - -
Timothy Bolot - from 12 March 2007 to 4 December 2007
Ex-Interim Director of Finance 195-200 - - 245-250 - -
Irene Scott - from 1 September 2005 to 27 February 2008
Ex-Director of Nursing 90-95 - - 90-95 - -
Gary Walker - from 1 September 2005 to 6 October 2006
Ex-Chief Executive - - - 65-70 - -
Katrina Percy - from 14 November 2005 to 31 March 2007
Ex-Chief Operating Officer - - - 90-95 60-65 -
Malcolm Dennett - from 2 January 2006 to 18 January 2007
Ex-Director of Finance - - - 75-80 - -
Annie Carr - from 8 January 2007 to 31 March 2007
Ex-Director of Finance - - - 20-25 - -
Anthony Gordon-Wright - left 31 March 2007
Ex-Medical Director - - - 75-80 70-75 -
Non Executive Directors
Roy Davies - Interim Chairman from 8 March 2005 and Chairman since 1 October 2005
Chairman 20-25 - - 15-20 - -
Michael Ormerod- since 1 July 2005
Non Executive Director 5-10 - - 5-10 - -
Yvette Robbins- since 1 December 2005
Non Executive Director 5-10 - - 5-10 - -
Stephanie Morgan- since 1 December 2005
Non Executive Director 5-10 - - 5-10 - -
David Williams- since 1 January 2007
Non Executive Director 5-10 - - 0-5 - -
Joyce Drummond-Hill- left 31 May 2006
Ex-Non Executive Director - - 0-5 - -
David Bailey- from 1 December 2005 to 28 February 2007
Ex-Non Executive Director - - 0-5 - -
Graham Curtis- since 6 August 2007
Non Executive Director 0-5 - - - - -
33
Remuneration report tablesPension benefits
Real increase
in pensionat age 60(bands of£2500)
£000
Real increase
in pension lump
sum at age 60
(bands of£2500)
£000
Total accruedpension atage 60 at 31 March
2008(bands of£5000)
£000
Lump sum at
age 60 related
to accrued pension at31 March
2008(bands of£5000)
£000
Cash EquivalentTransferValueat 31 March 2008
£000
Cash EquivalentTransferValueat 31 March 2007
£000
Real increasein Cash
EquivalentTransfer Value
£000
Employers contribution
tostakeholder
pension
£000
Gail Wannell Chief Executive 0-2.5 0-5 30-35 100-105 506 412 94 -
Catherine Greenaway Medical Director 0-15 0-15 35-40 110-115 651 - 651 -
Patricia DaviesDirector of Clinical Services
0-5 0-15 10-15 30-35 116 - 116 -
Andrew HinesDirector of Business Dev
0-5 0-17.5 10-15 40-45 151 - 151 -
Paul SimpsonDirector of Finance
0-2.5 0-7.5 5-10 15-20 90 - 90 -
Jennifer WoollettDirector of Workforce & OD
0-2.5 0-5 20-25 65-70 349 291 58 -
Mona WalkerInterim Director of Nursing
- - - - - - - -
Timothy BolotEx-Interim Director of Finance
- - - - - - - -
Irene ScottEx-Director of Nursing
12.5-15 35-37.5 40-45 120-125 655 598 57 -
Gary WalkerEx-Chief Executive
- - - - - 49 - -
Katrina PercyEx-Chief Operating Officer
- - - - - 99 - -
Malcolm DennettEx-Director of Finance
- - - - - - - -
Annie CarrEx-Director of Finance
- - - - - 6 - -
Anthony Gordon-Wright
Ex-Medical Director
- - - - - - - -
34
The following financial statements are merely a summary of the
information in the full accounts, which are available on demand (free
of charge). If you would like a copy please write to Paul Simpson,
Director of Finance, Surrey and Sussex Healthcare NHS Trust, Trust
Headquarters, Maple House, East Surrey Hospital, Canada Avenue,
REDHILL, Surrey, RH1 5RH.
The Trust’s external auditors are
PricewaterhouseCoopers (PwC) LLP.
The cost of the auditor’s audit work during the
reporting period was £366k.
Non-audit services (costing £178k) were provided
covering the following areas: Income recovery
project, advice on financial model, South East Coast
Procurement Hub work, mini-audit / assurance
review, secondment of staff into performance team
and related advisory work.
Non-audit work has been secured within Trust
policies to ensure no conflict with the auditor’s
responsibilities in auditing the Trust. In summary,
the work commissioned has been analytical and
advisory and does not involve employment of
PwC to implement actions in the Trust’s name.
The work has been cleared in all cases with the
Audit Commission.
Appendices Summary financial accounts
35
Formal accounts statementsGlossary of some financial terms used in the Annual Report and Accounts
Income & expenditure
(I&E)
Income received less costs incurred in a period. Primary financial statement.
Net current assets
Current assets less creditors - a positive number is favourable
SurplusIncome exceeds costs (favourable)
Working capital
Net current assets, less stocks and other adjustments - describes resource available that can be used to manage the cash availableDeficit Costs exceed income (adverse)
Operating surplus/(deficit)
Surplus/deficit before accounting for financing and exceptionals like interest and dividends
Liquidity (1)
Adjective - Describes ease of converting to cash - fixed assets are not very liquid, debtors are more so.
Net surplus/(deficit)
Overall surplus/deficit including financing etc
Liquidity (2)
Measure - Often stated as a measure based on the working capital figure and describing the amount of cash that can be quickly made available at a moment in time.
Recurrent surplus/(deficit)
Underlying position - deduct one-off income or costs from the net surplus/deficit (nb: does not mean repayable)
EBITDA – earnings
before interest, tax,
depreciation & amortisation
The operating surplus in the accounts excluding non-cash payments (depreciation and impairments). Not currently part of formal Trust accounts format, but will be in future.
Taxpayer’s equity
The Trust is a public body and its assets belong to the taxpayer - this appears at the foot of the balance sheet and describes PDC and all other resources accumulated by the Trust
PDC – public dividend
capital
Tax payer’s ongoing investment in the Trust - appears on balance sheet and the annual 3.5% return mimicking a “shareholder” dividend payment is on I&E
Capital
Spend that buys things that have a life over 1 year and a value above £5k (includes grouping items together). Not I&E spend - pays for fixed assets.
Balance sheet
Accumulated resources available to the Trust at a point in time and where they have been sourced. Primary financial statement.
RevenueAny spend that is not capital - appears on I&E statement
Cashflow
Statement showing cash in vs cash out - includes capital and revenue - Primary financial statement
Fixed assets
Buildings and equipment - paid for by capital spend. Long term - cannot be quickly converted back to cash
Statement of recognized gains
and losses
Pulls together I&E and balance sheet items that are increasing or reducing the Trust’s financial strength - Primary financial statement
Current assets
Cash, stocks or money owed to the Trust - short term and more easily converted to cash to spend
Creditors Less than a year - current liabilities - money the Trust owes others - debts
ProvisionsCash to be paid in the future - expenditure recorded on I&E in the past
DebtorsLess than a year - current asset - money owed to Trust
36
Opinion on the financial statements
We have audited the financial statements of Surrey
and Sussex Healthcare NHS Trust for the year ended
31 March 2008 under the Audit Commission Act
1998. These comprise the Income and Expenditure
Account, the Balance Sheet, the Cashflow Statement,
the Statement of Total Recognised Gains and Losses
and the related notes. These financial statements
have been prepared in accordance with the
accounting policies directed by the Secretary of State
with the consent of the Treasury as relevant to the
National Health Service set out therein. We have also
audited the information in the Remuneration Report
that is described as having been audited.
This report, including the opinion, has been prepared
for and only for the Board of Surrey and Sussex
Healthcare NHS Trust in accordance with Part II of
the Audit Commission Act 1998 and for no other
purpose, as set out in paragraph 36 of the Statement
of Responsibilities of Auditors and of Audited Bodies
prepared by the Audit Commission. We do not, in
giving this opinion, accept or assume responsibility
for any other purpose or to any other person to
whom this report is shown or into whose hands it
may come save where expressly agreed by our prior
consent in writing.
The directors’ responsibilities for preparing the
financial statements and the Remuneration
Report in accordance with directions made by the
Secretary of State are set out in the Statement of
Directors’ Responsibilities.
Our responsibility is to audit the financial statements
and the part of the Remuneration Report to be
audited in accordance with relevant legal and
regulatory requirements and International Standards
on Auditing (UK and Ireland).
We report to you our opinion as to whether the
financial statements give a true and fair view, and
whether the part of the Remuneration Report to be
audited has been properly prepared, in accordance
with the accounting policies directed by the Secretary
of State as being relevant to the National Health
Service in England. We report to you whether, in
our opinion, the information which comprises the
commentary on the financial performance included
within the Operational and Financial Review,
included in the Annual Report, is consistent with the
financial statements.
We review whether the directors’ statement of
internal control reflects compliance with the
Department of Health requirements “Statement
of Internal Control 2007/08 – Disclosures”, issued
on 7 April 2008 and 20 May 2008. We report if
it does not meet the requirements specified by
the Department of Health or if the statement is
misleading or inconsistent with other information
we are aware of from our audit of the financial
statements. We are not required to consider,
nor have we considered, whether the directors’
Statement of Internal Control covers all risks and
controls. We are also not required to form an
opinion on the effectiveness of the Trust’s corporate
governance procedures or its risk and control
procedures.
We read other information contained in the Annual
Report, and consider whether it is consistent
with the audited financial statements. This other
information comprises only the unaudited part of
the Remuneration Report, the Chairman’s Statement
and the remaining elements of the Operating and
Financial Review. We consider the implications for
our report if we become aware of any apparent
misstatements or material inconsistencies with the
financial statements. Our responsibilities do not
extend to any other information.
Respective responsibilities of Directors and Auditors
Independent auditors’ report to the Directors of the Board of Surrey and Sussex Healthcare NHS Trust
37
Basis of audit opinion
We conducted our audit in accordance with the
Audit Commission Act 1998 and the Code of Audit
Practice issued by the Audit Commission, which
requires compliance with International Standards
on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on
a test basis, of evidence relevant to the amounts
and disclosures in the financial statements and the
part of the Remuneration Report to be audited.
It also includes an assessment of the significant
estimates and judgments made by the directors in
the preparation of the financial statements, and of
whether the accounting policies are appropriate to
the Trust’s circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to
obtain all the information and explanations which
we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance
that the financial statements are free from material
misstatement, whether caused by fraud or other
irregularity or error; and the financial statements
and the part of the Remuneration Report to be
audited have been properly prepared. In forming
our opinion we also evaluated the overall adequacy
of the presentation of information in the financial
statements and the part of the Remuneration Report
to be audited.
Opinion
In our opinion:
• the financial statements give a true and fair
view, in accordance with the accounting policies
directed by the Secretary of State as being
relevant to the National Health Service in England,
of the state of the Trust’s affairs as at 31 March
2008 and of its income and expenditure for the
year then ended;
• the financial statements and the part of the
Remuneration Report to be audited has been
properly prepared in accordance with the
accounting policies directed by the Secretary of
State as being relevant to the National Health
Service in England; and
• information which comprises commentary
on the financial performance included within
the Operating and Financial Review, included
within the Annual Report, is consistent with the
financial statements.
PricewaterhouseCoopers LLP
23 June 2008
38
The Board is accountable for internal control. As
Accountable Officer, and Chief Executive of this
Board, I have responsibility for maintaining a
sound system of internal control that supports the
achievement of the organisation’s policies, aims and
objectives. I also have responsibility for safeguarding
the public funds and the organisation’s assets for
which I am personally responsible as set out in the
Accountable Officer Memorandum.
I report to the Chair of the Trust and ensure
appropriate systems exist to support the work of
the Trust and the Board. I manage the executive
team who have clear accountabilities and annual
objectives, drawn from the annual plan of the Trust.
The Trust works in partnership with other health and
social care organisations in the area, but notably
Surrey Primary Care Trust as lead commissioners,
and West Sussex Primary Care Trust. The contract
between us provides clarity on our shared
priorities and officers of the Trust meet regularly
with both Primary Care Trusts to take forward
developments and monitor the delivery of our shared
healthcare plans.
I also account to South East Coast Strategic Health
Authority for performance of the Trust in regular
meetings.
I attend the Health and Social Care Overview and
Scrutiny Committee to account for the performance
of the Trust to the local community and oversee the
work of executive officers in the work programme of
the Overview and Scrutiny Committee. I also ensure
the Trust is represented and is an active partner on
the Health Partnership Board.
The system of internal control is designed to
manage risk to a reasonable level rather than
to eliminate all risk of failure to achieve policies,
aims and objectives; it can therefore only provide
reasonable and not absolute assurance of
effectiveness. The system of internal control is
based on an ongoing process designed to:
• identify and prioritise the risks to the
achievement of the organisation’s policies, aims
and objectives.
• evaluate the likelihood of those risks being
realised and the impact should they be realised,
and to manage them efficiently, effectively and
economically.
The system of internal control has been in place
in Surrey and Sussex Healthcare NHS Trust for the
year ended 31 March 2008 and up to the date of
approval of the annual report and accounts.
Statement of Internal Control 2007/08
1. Scope of responsibility
2. The purpose of the system of internal control
39
The Trust’s capacity to handle risk is based around
a clear Board approved Risk Management Strategy,
effective leadership of the risk management process
and staff trained and equipped to manage risk in a
way appropriate to their authority. The key elements
of the Trust’s capacity to handle risk are as follows:
• Leadership is provided by executive directors
overseen by non executive directors. The Chief
Executive has overall responsibility, the Director of
Nursing is responsible for ensuring the risk strategy
is implemented throughout the Trust.
• A body of staff under the Head of Governance
and Quality has Trust wide responsibility for
development and support of risk management and
governance. This includes the identification of
good practice outside the Trust, its incorporation
into policies and procedures, and providing training
and support.
• The Trust has nominated risk coordinators within
each Directorate to work with General Managers,
Heads of Nursing and Governance, Clinical and
Assistant Directors to identify and assess risk.
• Staff are trained and equipped to manage risk in a
way appropriate to their authority and duties:
– all staff receive risk management information
and training at mandatory corporate induction
days, ongoing training as part of a mandatory
programme and through distribution of relevant
documents. The Medical Director presents to
all junior doctors on induction risk guidance on
prescribing and other practice relevant to their
discipline.
– Managers and specialist staff (eg risk managers)
have training from internal and external
providers as determined by local needs
assessment.
– Executives, Associate Directors and Risk
Coordinators are trained to assess risk using
standardised tools based upon the AS/NZS 4360:
1999 Risk Management Standard.
• The risk management strategy is reviewed annually
and promulgated throughout the Trust. The
strategy describes the risk management training
schedule which is mandatory for all staff including
at Board level.
• Organisational learning is communicated internally
through a structure of committees (covering clinical
and non-clinical risk) that penetrate throughout the
organisation down to local management teams.
• Learning is supported by the consistent application
of root cause analysis (RCA) of problems and
incidents and the avoidance of blaming and
“scape-goating” of individuals for systematic
failures as described in various Trust policies,
including the organization wide policy on
investigating adverse events.
• A range of problem resolution policies and
procedures, including whistle blowing, harassment,
capability, disciplinary and grievance are designed
to identify and remedy problems at an early stage.
• A range of individual support mechanisms to
encourage individuals to raise concerns about their
own performance in ways which will not threaten
their security or livelihood, e.g. appraisal, alcohol
use / abuse policies, professional counselling and
occupational health services.
3. Capacity to handle risk
40
Risk, or change in risk is identified, evaluated
and controlled as described in the Trust’s Risk
Management Strategy. That document describes the
following:
1. Statement of Intent
2. Scope and objectives of the strategy
3. Accountability and Reporting Structures
4. Organisation of governance agendas
5. Risk Management Process
6. Risk Management Training and support
7. Key performance indicators
8. Approval, Monitoring, review and audit
mechanisms
9. The key elements of the framework, covering
details of: Risk Management Groups,
Committees (including Health and Safety) and
Processes; the hierarchy for risk management
and governance, and; a guide to Risk
Quantification and acceptability.
Risk management is embedded in the activity of the
organisation through:
• A structure of permanent committees receiving
inputs based around risk registers and reporting
and management processes from all parts of the
organisation; which are encompassed in the Trust
wide risk register.
• The Board’s Assurance Framework.
• The Integrated Governance Framework.
• Compliance with NHSLA and RPST risk
management standards.
• Compliance with Standards for Better Health and
performance against the key lines of enquiry in
the Auditor’s Local Evaluation.
• The work of Directorate governance leads.
• The system of local risk co-ordinators and
Directorate Risk Managers.
• Regular and ad hoc training events.
The Board’s assurance framework is a key support
to the Trust’s system of internal control. In 2007/08
it listed the risks against the Trust’s key business
objectives, providing a clear method for the focused
management of risks that may arise from any aspect
of the Trust’s business. It does that by describing
and rating risks, setting out the controls in place and
providing evidence of assurance of the effectiveness
of those controls. Wherever appropriate and possible
the assurance is independent.
The Healthcare Governance Committee oversees
(through the Head of Integrated Governance
and Quality) the maintenance of and reviews the
assurance framework, and that in turn is overseen by
the Audit and Assurance Committee. The assurance
framework is reported and reviewed regularly at
the Board.
The Trust’s risk management process takes into
consideration the need to manage all types of risk as
relevant to key stakeholders.
Assurance framework
The final assurance framework presented to the
Board in 2007/08 describes two areas with limited
assurance. These are not disclosed in the “significant
control issues” section recognising their different
classification as risks but are disclosed here for
completeness below:
Business continuity – there is a risk that the Trust
could fail to ensure continuity of services due to a
lack of robust, tested and proportionate business
continuity management arrangements.
The major incident plan, IT and estates continuity
plans are in place. However, there were gaps
in controls to ensure that all of the Trust’s wider
arrangements are in place, fit for purpose and
maintained. The key control is now in place through
a business continuity steering group with an allocated
director (the Finance Director) and senior manager
support.
18 weeks referral target – there is a risk that the Trust
may fail to achieve the December 2008 18 weeks
referral to treatment target and the March 2008
milestones.
4. The risk and control framework
41
The Trust did not fully meet the March 2008
milestones in respect of one aspect (admitted patients
pathway). Controls were developed in the latter
part of 2007/08 and have been strengthened going
forward, with clearer director accountability and
reporting, including to the Executive Team, SHA and
to each monthly Board meeting as a separate item.
Senior managerial input has been reviewed and
strengthened (including external support) and a
detailed, costed operational action plan is in place
and being monitored.
The recent announcement (in May 2008) of changes
to the provision of the Trust’s Care Records Service
information technology system provide a material
risk (the extent of which is being scoped) that will
be recorded and monitored in the 2008/09 Trust
Assurance Framework.
Information governance
Information governance is a framework for managing
information, particularly personal information of
patients and employees. It should ensure that
personal information is dealt with legally, securely,
efficiently and effectively.
The Department of Health provides the standards and
a self assessment tool-kit and the Trusts’ compliance
is measured as part of the Healthcare Commission
Annual Health Check as core standard C9, which the
Trust met in the year.
Issues over information security have been
highlighted across the public sector and, as part of
additional work under the Department’s Information
Governance Assurance Programme (IGAP) launched
in December 2007, further review and tightening
of information security has taken place in the Trust.
That programme is ongoing and will see audit of
Trust systems and processes in early 2008/09.
There is one serious untoward incident to report in
2007/08. This is listed below as a “significant control
issue” on page 45.
NHS Pension Scheme
As an employer with staff entitled to membership
of the NHS Pension Scheme control measures are in
place to ensure all employer obligations contained
within the scheme regulations are complied with.
This includes ensuring that deductions from salary,
employer’s contributions and payments to the
Scheme are in accordance with the Scheme rules, and
that member Pension Scheme records are accurately
updated in accordance with the timescales detailed in
the regulations.
As Accountable Officer, I have responsibility for
reviewing the effectiveness of the system of internal
control. My review is informed in a number of ways:
• The Head of Internal audit provides me with an
opinion on the overall arrangements for gaining
assurance through the Assurance Framework and
on the controls reviewed as part of the internal
audit work.
• Executive managers within the organisation who
have responsibility for the development and
maintenance of the system of internal control
provide me with assurance.
• The Assurance Framework itself provides me
with evidence that the effectiveness of controls
that manage the risks to the organisation
achieving its principal objectives have been
reviewed.
My review is also informed by comments made by
external auditors.
The main points from my review are as follows:
Use of Resources
In 2006/07 the Trust scored as “weak” in the Use of
Resources part of the Annual Health Check.
5. Review of effectiveness
42
KLOE Detail 06/07 Actual 07/08 Actual*
Fin
anci
al r
epo
rtin
g
1.1 Statutory and professional reporting standard 1 2
Timeliness of accounts production 1 2
Working papers 1 1/2
Audit opinion 2 2
1.2 Production of the annual report 1 2
Availability and transparency of public reporting 1 2
Fin
anci
al m
anag
emen
t
2.1 Medium-term financial strategy 1 2
Linking corporate and financial planning 1 2
Budget setting 1 2
Plans to repay loan N/A 2
Savings plans and cost improvements 2 2
2.2 Budget monitoring process 1 2
Budget monitoring information 1 2
Planned savings 2 2
2.3 Estate strategy 1 2
Asset register 1 1
Asset management 1 2
Fin
anci
al
stan
din
g
3.1 Financial targets 1 2
Breakeven duty 1 2
Financial projections 1 2
Addressing underlying deficits 1 N/A
Inte
rnal
co
ntr
ol
4.1 Assurance framework 1 2
Risk management process 1 2
Embedding risk management 1 2
Risk management training 1 2
4.2 Statement of Internal Control (SIC) 2 2
Systems of Internal Control - general 1 2
Systems of control - meeting laws 1 2
Audit Committee 1 2
Internal audit 2 2
4.3 Codes of Conduct 2 2
Counter fraud policy and culture 2 2
Local counter fraud specialist (LCFS) 2 2
Auditors Local Evaluation 2007/08: Action Plan Status
The Trust completed the corrective actions described in the 2006/07 statement of internal control concerning
its performance against the “Use of Resources” criteria and is hoping to be scored, using the Auditor’s Local
Evaluation (ALE) as illustrated in the diagram below:
* subject to final Healthcare Commission confirmation in October 2008
43
• One individual key line of enquiry (KLOE) was rated
as “inadequate” (5.3, data quality) which is disclosed
under “significant control issues” on page 45.
• The Trust achieved breakeven within 2007/08
therefore achieving a score of 2 under the ALE
assessment. However, as noted previously the Trust did
not achieve its statutory breakeven duty as disclosed
under ‘significant control issues’ on page 44.
• The other item, KLOE 2.3 – (arrangements for
managing assets) was rated adversely because the
Trust did not have a fully functioning asset register
in place for the full year, but achieved an adequate
position in January 2008. This will be maintained
for 2008/09 and further improvements in asset
control and audit implemented.
Standards for Better Health (SfBH)
In 2006/07 the Trust failed overall to comply fully
with the Annual Health Check
In 2007/2008 the Trust completed corrective actions
described in the 2006/07 statement of internal
control that mean the Trust has declared “partly
met” compliance with the core standards. Two
standards were not met within the SfBH declaration
and are disclosed under “significant control issues”
on page 45.
The position on the core standards compared to
2006/07 is described below.
Note: ALE ratings run from “1” to “4”, where “1” is low (inadequate). “2” is “adequate”.
Core Standards 06/07 Core Standards 07/08
KLOE Detail 06/07 Actual 07/08 Actual*V
alu
e fo
r m
on
ey
5.1 Setting objectives 2 2
Reviewing objectives 2 2
Implementing objectives - workforce 1 2
Implementing objectives - IT & estates 1 2
5.2 Communication 2 2
Monitoring: Patient feedback 2 2
Partnerships with voluntary sector/user groups 2 2
5.3 Performance management process 1 2
Data quality 1 1
5.4 Efficiency plans 2 2
Corporate back office functions 1 2
Clinical services 1 2
Key NHS reforms 1 2
Efficiency and productivity metrics 1 2
Reference costs 1 2
Procurement 1 2
Board development 1 2
DomainDeclared Compliance
Met In year Not met
Safety 7 2 0
Clinical & Cost Effectiveness 5 0 0
Governance 3 1 7
Patient Focus 9 0 1
Accessible and Responsive Care 2 0 0
Care Environment and Amenities 0 3 0
Public Health 4 0 0
Rating: “not met” 30 6 8
DomainDeclared Compliance
Met In year Not met
Safety 8 0 1
Clinical & Cost Effectiveness 5 0 0
Governance 4 6 1
Patient Focus 9 1 0
Accessible and Responsive Care 2 0 0
Care Environment and Amenities 3 0 0
Public Health 4 0 0
Rating: “not met” 35 7 2
44
Governance
• After the significant governance failings described
in the 2006/07 SIC, the Trust has invested
considerable effort to maintain and build on the
actions begun at the end of the last year to ensure
a robust and effective governance framework is
in place, including the Risk Management Strategy.
This substantial process of review and improvement
has delivered very visible outputs as recorded in the
regulatory assessments and will continue as part
of the operation of the governance framework in
2008/09, overseen by the Healthcare Governance
Committee.
• The Trust has risk management, control and review
processes in place, appropriate to its circumstances
and business. The Board last approved the Trust’s
Risk Management Strategy in December 2007.
• Delivery of the criteria required for the Standards
for Better Health declaration and the Auditor’s
Local Evaluation are managed through an action
planning and monitoring process reported regularly
to the Executive Committee, the Healthcare
and Governance Committee and the Audit and
Assurance Committee.
• Internal audit reviews the existing system of internal
control and the overall arrangements to gain
assurances that the controls are designed to meet
the objectives and are consistently applied.
• The Head of Internal Audit’s opinion states that an
Assurance Framework has been established which
meets the requirements of the 2007/08 Statement
of Internal Control and provides significant
assurance that there is an effective system of
internal control.
• The Board Assurance Framework including the
principal risks to the achievement of the Trust’s
principal objectives was in place for the whole
of the year 2007/08 and provided the basis for
monitoring the effectiveness of the management
of the Trust’s principal risks. It was refreshed and
reported to the Board throughout the year with
the latest version reflecting the position at 25th
March 2008.
• The Audit and Assurance Committee and the
Healthcare Governance Committee have overseen
the process of reviewing and refreshing the
governance structure and have reported to the
Board that assurance is adequately provided and
the structure is fit for purpose.
• During the year the Audit and Assurance
committee has been strengthened, Workforce
Governance Committee consolidated and
the Business Continuity Management Group
established.
Finance:
The Trust is now emerging from a five year period
of deficit and financial recovery is now manifest
in its 2007/08 income and expenditure breakeven
performance.
The Trust has met the two main financial targets
set by the Department of Health in the letter from
David Nicholson received on 4 December 2007,
having delivered a breakeven position in the month
of January 2008 (and through to March). Against
its approved Annual Plan for the full year the
overall breakeven means the Trust has exceeded the
performance (a £2.6m deficit) stated there.
However, in 2007/08 the Trust failed its Breakeven
Duty as it has not delivered the surplus necessary to
cover the accumulated deficit over the last 5 years.
A letter will be issued by the external auditor to the
Secretary of State advising of this.
The Trust secured a £56m loan in 2006/07 and has
agreed a revised repayment plan with the Strategic
Health Authority that will, if the deliverables
expected are met, see the loan repaid in the next
three years. At the same time the Trust has agreed
a medium term financial plan with the Strategic
Health Authority that sees it delivering surpluses in
future years.
6. Significant control issues
45
The ALE key line of enquiry (KLOE) that was rated as
inadequate was as follows:
– KLOE 5.3 (arrangements for monitoring and
reviewing performance including arrangements
to ensure data quality) – the Trust meets the first
part of this dimension but cannot demonstrate
that it could meet the data quality aspects
for the full year because of the significant
problems experienced with the implementation
of the Cerner care records system. The Trust
commissioned a detail report from its External
Auditors in Autumn 2007 and has since been
successfully implementing its recommendations.
That continues and is subject to a formal action
plan reviewed by the Audit and Assurance
Committee.
The rating on KLOE 5.3 is the reason for the auditors’
“except for” qualification in their statement on
compliance with the “Use of Resources” criteria.
Standards for Better Health
The Board, in its Declaration in April, reported that
the Trust had not met two of the core Standards
for Better Health (C4C and C7E) These are outlined
below:
• C4C states that healthcare organizations keep patients, staff and visitors safe by having systems to ensure that all reusable medical devices are properly decontaminated prior to use and that risks associated with decontamination facilities and processes are well managed
The Trust met this standard in all areas except
one - having taken the Redwood Elective Centre
back into direct management on 1st December
2007, detailed expert external audit showed non
compliance with the endoscope decontamination
standard. The Trust is preparing a fast track
business case with options, to ensure compliance.
• C7E states Healthcare organizations challenge discrimination, promote equality and respect human rights
The Trust has declared not met with this standard
as further work is required to embed equality and
diversity, and supporting systems, in the Trust. A
detailed action plan is in place monitored by the
Workforce Governance Committee.
Information governance
There is one serious untoward incident to report
in 2007/08 involving an allegation of a member of
staff’s unauthorised access to the Trust’s computer
network. This is graded as a potential level 5 incident
according to recent guidance (this is the highest level
risk) and is disclosed in the Trust’s annual report.
This case is the subject of criminal and internal
investigation. The Trust will assess its information
risks in light of the incident in order to address any
weaknesses and ensure continuous improvement
of its systems. Planned steps for the coming year
include an audit of Trust information systems and
processes.
I have been advised on the implications of the result
of my review of the effectiveness of the system of
internal control by the Healthcare Committee and
Audit and Assurance Committee. Plans to address
weaknesses and ensure continuous improvement of
the system are in place.
Gail Wannell
Chief Executive
12 July 2007
46
NOTE2007/08
£0002006/07
£000
Income from activities 3 153,432 143,521
Other operating income 4 17,550 19,776
Operating expenses 5 (167,252) (172,155)
OPERATING SURPLUS/(DEFICIT) 3,730 (8,858)
Cost of fundamental reorganisation/restructuring 0 0
Loss on disposal of fixed assets 8 (168) (917)
SURPLUS/(DEFICIT) BEFORE INTEREST 3,562 (9,775)
Interest receivable 633 743
Interest payable 9 (2,737) (68)
Other finance costs - unwinding of discount 16 (50) (53)
SURPLUS/(DEFICIT) FOR THE FINANCIAL YEAR 1,408 (9,153)
Public Dividend Capital dividends payable (1,381) (3,002)
RETAINED SURPLUS/(DEFICIT) FOR THE YEAR 27 (12,155)
All income and expenditure is derived from continuing operations.
Note numbers listed above are those used in the full accounts.
31 March 2008£000
31 March 2007£000
Retained surplus for the year 27 (12,155)
Financial support included in retained surplus
for the year - internally generated2,600 0
Retained deficit for the year excluding financial support (2,573) (12,155)
NOTE TO THE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 March 2008
Financial support is income provided wholly to assist in managing the NHS Trust’s financial position. Internally
generated financial support is financial support received from within the local health economy, consisting of the
area of responsibility of South East Coast Strategic Health Authority. A local pricing agreement was agreed with
Surrey PCT (£1.3m) and West Sussex PCT (£1.3m) to resolve income disputes allowing the breakeven position.
Primary financial statementsINCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 March 2008
47
BALANCE SHEET AS AT 31 March 2008
NOTE31 March
2008£000
31 March 2007£000
FIXED ASSETS
Intangible assets 10 190 0
Tangible assets 11 121,210 109,579
Investments 14.1 0 0
121,400 109,579
CURRENT ASSETS
Stocks and work in progress 12 1,333 1,020
Debtors 13 9,922 15,498
Investments 14.0 0 0
Cash at bank and in hand 18.3 559 495
11,814 17,013
CREDITORS: Amounts falling due within one year 15 (20,795) (26,566)
NET CURRENT ASSETS/(LIABILITIES) (8,981) (9,553)
TOTAL ASSETS LESS CURRENT LIABILITIES 112,419 100,026
CREDITORS: Amounts falling due after more than one year 15 (51,520) (53,760)
PROVISIONS FOR LIABILITIES AND CHARGES 16 (2,465) (3,909)
TOTAL ASSETS EMPLOYED 58,434 42,357
FINANCED BY:
TAXPAYERS’ EQUITY
Public dividend capital 22 81,675 71,575
Revaluation reserve 17 43,696 39,262
Donated asset reserve 17 1,702 1,458
Income and expenditure reserve 17 (68,639) (69,938)
TOTAL TAXPAYERS’ EQUITY 58,434 42,357
The financial statements on pages 46 and 47 were approved by the Board on 20th June 2008 and signed on its
behalf by:
Gail Wannell
Chief Executive
20 June 2008
Note numbers listed above are those used in the full accounts.
48
2007/08£000
2006/07£000
Surplus/(deficit) for the financial year before dividend payments 1,408 (9,153)
Fixed asset impairment losses 0 (8,567)
Unrealised surplus on fixed asset revaluations/indexation 5,913 10,298
Increases in the donated asset and government grant reserve due
to receipt of donated and government grant financed assets486 213
Defined benefit scheme actuarial gains/(losses) 0 0
Additions/(reductions) in “other reserves” 0 0
Total recognised gains and losses for the financial year 7,807 (7,209)
Prior period adjustment 0 0
Total gains and losses recognised in the financial year 7,807 (7,209)
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 March 2008
49
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 March 2008
2007/08£000
2006/07£000
OPERATING ACTIVITIESNet cash inflow/(outflow) from operating activities 10,362 18,381
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE:Interest received 633 743
Interest paid (2,693) 0
Interest element of finance leases 0 0
Net cash inflow/(outflow) from returns on investments and servicing of finance
(2,060) 743
CAPITAL EXPENDITURE(Payments) to acquire tangible fixed assets (17,515) (7,165)
Receipts from sale of tangible fixed assets 3,040 38,035
(Payments) to acquire intangible assets (200) 0
Receipts from sale of intangible assets 0 0
(Payments to acquire)/receipts from sale of fixed asset investments 0 0
Net cash inflow/(outflow) from capital expenditure (14,675) 30,870
DIVIDENDS PAID (1,381) (3,002)
Net cash inflow/(outflow) before management of liquid resources and financing
(7,754) 46,992
MANAGEMENT OF LIQUID RESOURCES(Purchase) of investments with DH 0 0
(Purchase) of other current asset investments 0 0
Sale of investments with DH 0 0
Sale of other current asset investments 0 0
Net cash inflow/(outflow) from management of liquid resources
0 0
Net cash inflow/(outflow) before financing (7,754) 46,992
FINANCINGPublic dividend capital received 10,100 0
Public dividend capital repaid (not previously accrued) 0 (103,255)
Loans received from DH 0 56,000
Other loans received 0 0
Loans repaid to DH (2,240) 0
Other loans repaid 0 0
Other capital receipts 0 0
Capital element of finance lease rental payments 0 0
Cash transferred to/from other NHS bodies 0 0
Net cash inflow/(outflow) before financing 7,860 (47,255)
Net cash inflow/(outflow) before financing 106 (263)
50
The Trust met all of its administrative duties except for the Better Payments
Payments Practice Code. It did not meet its single statutory duty, the breakeven
duty, as disclosed in the Statement of Internal Control and as referred to in the
body of the annual report.
Note numbers listed below are those used in the full accounts
Notes from the accounts relating to administrative duties
6.4 Management costs 2007/08
£0002006/07
£000
Management costs 8,384 8,881
Income 170,982 155,895
Management costs are defined as those on the management costs website at
www.dh.gov.uk/PolicyAndGuidance/OrganisationPolicy/FinanceAndPlanning/NHSManagementCosts/fs/en
7. Better Payment Practice Code 7.1 Better Payment Practice Code - measure of compliance
2007/08 2006/07
Number £000 Number £000
Total Non-NHS trade invoices paid in the year 45,417 64,842 41,413 42,616
Total Non NHS trade invoices paid within target 34,335 46,126 31,672 32,615
Percentage of Non-NHS trade invoices paid within target 76% 71% 76% 77%
Total NHS trade invoices paid in the year 2,031 22,290 2,076 18,051
Total NHS trade invoices paid within target 799 9,212 1,092 9,195
Percentage of NHS trade invoices paid within target 39% 41% 53% 51%
The Better Payment Practice Code requires the Trust to aim to pay all undisputed invoices by the due date or
within 30 days of receipt of goods or a valid invoice, whichever is later.
The relatively low performance in 2007/8 in NHS payments is due to queries raised with other organisations
before payments can be made. There were also issues in the earlier part of the year in terms of invoice
authorisation flows as trust was in its first year of implementation of the Trust’s new financial system with a
shared service provider.
51
23.2 Capital cost absorption rate
The Trust is required to absorb the cost of capital at a rate of 3.5% of average relevant net assets.
The rate is calculated as the percentage of dividends paid on public dividend capital, totalling £1,381,000 bears to
the average relevant net assets of £43,502. On that basis the Trust has absorbed the capital costs at a rate of 3.2%.
This is within the materiality range of 3%-4% as set by the Department of Health.
23.3 External financing
The Trust is given an external financing limit which it is permitted to undershoot.
£0002007/08
£0002006/07
£000
External financing limit 7,958 (46,988)
Cash flow financing 7,754 (46,992)
Finance leases taken out in the year 0 0
Other capital receipts 0 0
External financing requirement 7,754 (46,992)
Undershoot 204 4
23.4 Capital Resource Limit
The Trust is given a capital resource limit which it is not permitted to overspend.
2007/08£000
2006/07£000
Gross capital expenditure 18,294 7,622
Less: book value of assets disposed of (3,208) (38,063)
Plus: loss on disposal of donated assets 0 0
Less: capital grants 0 0
Less: donations towards the acquisition of fixed assets (486) (213)
Charge against the capital resource limit 14,600 (30,654)
Capital resource limit 14,947 (19,460)
Underspend against the capital resource limit 347 11,194
Surrey and Sussex Healthcare NHS TrustSurrey and Sussex Healthcare NHS Trust provides services on the following hospital sites:
East Surrey Hospital
Canada Avenue
Redhill
Surrey RH1 5RH
Telephone: 01737 768511
Surrey and Sussex Healthcare NHS Trust continues to provide a range of services at Crawley Hospital which is
managed by West Sussex Primary Care Trust. We also provide a number of services at four community hospitals:
Crawley Hospital
West Green Drive
Crawley
West Sussex RH11 7DH
Telephone: 01293 600300
Dorking Hospital
Horsham Road
Dorking
Surrey RH4 2AA
Telephone: 01306 887150
Oxted Health Centre
10 Gresham Road
Oxted RH8 0BQ
Telephone: 01883 734000
Caterham Dene Hospital
Church Road
Caterham
Surrey CR3 5RA
Telephone: 01883 837500
Horsham Hospital
Hurst Road
Horsham
West Sussex RH12 2DR
Telephone: 01403 227000
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You can contact PALS by:
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Surrey and Sussex Healthcare NHS Trust
Maple House
Canada Avenue
Redhill
Surrey RH1 5RH
Telephone: 01737 768511
Fax: 01737 231769
Email: [email protected]
www.surreyandsussex.nhs.uk
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