BOARD OF DIRECTORS. Tuesday 24 May 2016 from Boardroom, Peterborough City Hospital

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1 BOARD OF DIRECTORS Tuesday 24 May 2016 from Boardroom, Peterborough City Hospital AGENDA Timings Welcome, Apologies for Absence and Declarations of Interest Mr Brown 13: PSHFT/HHCT Outline Business Case Background OBC Followed by questions from the floor Minutes of the last meeting held on Wednesday 26 April 2016 For approval Appendix 1 Appendix 2 For approval Appendix Matters Arising and Action Tracker For discussion Appendix Chairman s Review of the Month For noting Verbal Chief Executive Officer s Report For noting Appendix 5 Mr Hughes Mr Graves, Mrs Walker Mr Hughes Mr Hughes Mr Hughes Mr Graves INTEGRATED PERFORMANCE REPORT Performance Reports For discussion Reports to be taken as read. Questions by exception only (a) Quality Report Appendix 6 Mrs Bennis (b) Operations Report Appendix 7 Mr Doverty (c) Cost Improvement Plan Report Appendix 8 Miss Jackson (d) Finance Report Appendix 9 Mr Oldfield (e) Workforce and OD Report OD Programme Update Appendix 10 Mr Crich (f) Governance Report Appendix 11 Miss Pigg FINAL ITEMS Any Other Urgent Business For discussion Mr Hughes Verbal Questions from the Floor For discussion Mr Hughes Verbal Date of Next Meeting on Tuesday 28 June 2016, Boardroom, Peterborough City Hospital

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3 Board of Directors, 24 May 2016, Item PSHFT/HHCT Outline Business Case Background Paper Presented for: Presented by: Strategic objective: Purpose The aim of this document is to provide a brief background to the journey that the Trust has been on since it was formed. It sets out the key issues this Trust and the whole NHS is facing, the action it is taking in partnership with other local NHS organisations and the particular benefits of merging with Hinchingbrooke Health Care Trust for patients, the public and staff. 1. Introduction Approval Stephen Graves, Chief Executive All Strategic Objectives Date: 17 May 2016 Regulatory relevance: NHS Constitution delivery Equality and Diversity Freedom of Information Release Monitor: Enforcement Notice Monitor Licence: General Conditions (G6) Staff: All requirements Patients and Public: All requirements This report covers services and individuals equally and there are no specific equality and diversity issues for consideration This report should not be released under the Freedom of information Act 2000 without consideration of redaction as is subject to s.36 prejudice to effective conduct of public affairs Peterborough and Stamford Hospitals NHS Foundation Trust (PSHFT) was declared clinically and operationally sustainable but not financially sustainable by Monitor in This followed a Contingency Planning Team report they commissioned which looked at the causes of the financial deficit at the Trust following the move to the new hospital (Peterborough City Hospital) in There have been notable changes at Board level since The new Board has focused on stabilising and then starting to reduce the deficit. This has been achieved whilst the financial position across the NHS has deteriorated but a large deficit remains. The Board has put in place robust governance structures and processes, which oversee and support the delivery of above average efficiency gains whilst also delivering improvements in patient care. The Board remains fully committed to the ongoing delivery of our cost improvement plans whilst focussed on ensuring we provide high quality services for our patients, delivered by excellent staff. The CQC reports of 2014/15, which rated both hospitals (Peterborough City Hospital and Stamford Hospital) as good were testament to the hard work of everyone. However, there are services that need to be strengthened to ensure their sustainability into the future. Page 1 of 5

4 Board of Directors, 24 May 2016, Item Background In 2004, Peterborough and Stamford Hospitals NHS Foundation Trust was one of the first wave of Foundation Trusts, and from this time through to 2008 operated with a financial surplus. After many years, spanning back to 1993, the business case for a new hospital on the Edith Cavell site, which led to the amalgamation of services on the old city centre site with those at the Edith Cavell site, was approved by the Government. In 2010, the new PFI-funded hospital opened and the Trust reported a 45m deficit for 2010/11. This serious financial problem led to a number of actions at a national level. These included:- A National Audit Office (NAO) report in November 2012 A review by the Committee of Public Accounts Department in 2012/13 A Contingency Planning Team (appointed by Monitor) report in 2013 The NAO set out three key reasons for the serious financial problems:- Under delivery of cost efficiencies A large increase in costs resulting from the new building Underfunded healthcare activity The Public Accounts Committee, which looked at Peterborough and Stamford Hospitals NHS Foundation Trust as well as Hinchingbrooke Healthcare Trust, made a number of comments and recommendations. A key comment was the following:- Neither hospital is financially sustainable in its current form and both will have to make unprecedented levels of savings to become viable. Events at both Trusts reflect poor financial management and the failure of the SHA to exercise strategic control over local healthcare provision and capacity planning. The poor oversight demonstrates that the Department has not established a robust system of healthcare planning. All bodies demonstrated an abject failure to accept responsibility for these decisions and their impact on the local health economy. But the local community will have to live with the consequences of these decisions for many years to come, as will the NHS and the taxpayer who will have to foot the bill. The Contingency Planning Team report produced the following recommendations:- 1) Tackle the inefficiency of the Trust 2) Rapidly progress joined up working across the local health economy 3) Make better use of the underutilised estate 4) Seek support from the Department of Health (DH) or other national stakeholders to bridge any residual deficit Following the CPT report, a further key decision by Monitor, backed by a statutory Enforcement Order, was that the Trust itself should run a procurement process to be acquired by another NHS provider or franchised by another organisation. This was known as Project Orange and in 2013, the preparation work started. After the designation of Page 2 of 5

5 Board of Directors, 24 May 2016, Item Cambridgeshire and Peterborough as a Challenged Healthcare System, and the agreement of all organisations to work together, Project Orange was paused. In July 2015, Monitor closed the Project Orange enforcement in part due to the ongoing work across the local health system and the fact that the Trust had continued to deliver against its financial targets, underpinned by efficiency gains that were regularly twice those achieved across the NHS. As a result it gave the Trust the responsibility and requirement to develop its own 5-year Strategic Sustainability Plan. Beyond the ongoing improvements in efficiency that all providers need to deliver, the plan emphasised the need for ongoing and deeper clinical collaboration between partners across health and social care; to sustain and improve the efficiency of clinical services, and that there were some notable financial savings across the back office. As a result, we entered in to a formal agreement in December 2015 to work with Hinchingbrooke Health Care NHS Trust (HHCT) to determine any potential financial and clinical sustainability benefits from closer collaboration including a merger. 3. Quality and Clinical Sustainability In March 2014 the Trust was visited by the CQC. Six of the eight clinical streams at Peterborough City Hospital were rated good and Stamford was rated good throughout. However, a rating of requires improvement was given to the Trusts. The trust responded to this proactively by setting up a CEO led group to take forward the CQC recommendations. The CEO was supported by the Chief Nurse, Medical Director, the lead NED s and clinicians across the hospital. This approach engendered excellent staff engagement and leadership and was key to the hospital achieving a good rating overall following a further visit in May The CQC rating of good supports Monitor s finding that the Trust is operationally and clinically sustainable. Like all healthcare organisations, there continues to be an ongoing need to improve the quality of care that we provide to our patients, and to be open and honest about where we have frailty in our services either now or in the future. We can then honestly evaluate how we can meet those current or future challenges in order to deliver the best clinical services we can in the most cost effective way. The work we have carried out previously, and in partnership with colleagues from Hinchingbrooke Healthcare Trust (HHCT), has identified the following services which would benefit and be more sustainable now and in the future from greater collaboration:- Diagnostic imaging Interventional radiology Gastroenterology 7 day bleed services Stroke Ortho-geriatrics The business case explains the issues in more detail. It also explains how by working together we can make services across the whole area covered by the two organisations more sustainable for patients through being more attractive for staff to work in. Page 3 of 5

6 Board of Directors, 24 May 2016, Item Collaboration The work, to date (culminating in the Outline Business Case document attached), has determined that closer collaboration will not only support the ongoing provision of fragile services locally at Hinchingbrooke, but will improve the care we both provide and will also enable significant financial benefits to be achieved through the integration of back office functions. The collaborative working would also offer our staff access to increased training and education opportunities as well as making both organisations a more attractive place to work for a number of the difficult to recruit to roles. The options appraisal indicates that the best of the four options reviewed is option 4; to create a single organisation. 5. Next Steps The next steps in relation to the collaboration potential with HHCT is for both the Boards of HHCT and PSHFT to make a decision on whether to do more work to develop this further; that is to develop a full business case for the preferred option of merger. Should both Boards agree this at their May 2016 Board meetings, the agreed timeline to complete a full business case for review by both Boards would be September 2016, followed by a further period of public engagement and an opportunity to add to the case, before final approval by both Boards in November Should this be completed and our regulator, NHS Improvement, approve it post their detailed review, it would be expected that a transaction to create a new organisation would then happen on 1 April In legal terms this would be an acquisition of HHCT by PSHFT, however this would only relate to the transaction and transfer of assets and liabilities. Both Boards have discussed and agreed the need to maintain safe services locally in Huntingdon, Peterborough and Stamford. As a result of this, both Boards have also discussed the need to ensure that the Governors and Board members of any future organisation would reflect the local populations. 6. Sustainability of the Cambridgeshire and Peterborough Health system In addition to the sustainability pressures PSHFT is facing itself, the Cambridgeshire and Peterborough (C&P) health system is financially unsustainable in its current form. As outlined in the March 2016 Cambridgeshire and Peterborough CCG Fit for the Future; Evidence for Change document, there are also significant variations in access to services, waiting times and clinical outcomes across the C&P system. The latest projections show that the financial deficit across the NHS Providers and commissioners in the C&P system is as much as 250m per year by 2020/21 if we continue to provide services as we are currently. The system incurred a collective deficit of 150m in 2015/16, one of the highest per person in the country. To address concerns and review and develop service models for the future, 6 Clinical Working Groups, chaired by clinicians across the system, overseen by a Clinical Advisory Board, have been set up. These are covering the specific areas of: Page 4 of 5

7 Board of Directors, 24 May 2016, Item Urgent and Emergency Care Children and Young People s services Maternity and Neonatal services Elective services Proactive Care and Prevention Sustainable General Practice All Clinical Working Groups have clinical representation from all of the relevant health organisations and they have been meeting regularly over the last few months to determine the most clinically and financially sustainable solutions for future care provision across C&P. All are looking at a full range of options for their service area across the county with a view to developing a small number in detail and consulting on preferred options in the autumn this year. The timeframe for the output of the CCG-led system wide work is integrated with the national requirement for the development of system-wide 5-year Sustainability and Transformation Programmes (STPs). All 43 STPs across the country are required to submit their plans to NHS England and NHS Improvement in June, for review and for possible access to central funding to support implementation. Post submission of the local STP by C&P CCG, and relevant regulator approval, public consultation on any service reconfiguration will take place from November. 7. Conclusion Both PSHFT and HHCT are making major contributions to the CCG led system wide work. Through our more detailed joint work we have identified notable benefits for our patients, the public, our staff and the taxpayer by becoming one organisation through merger. I therefore recommend that the Trust Board approves the recommendation which is set out at the end of the Executive Summary of the Outline Business Case. Stephen Graves Chief Executive 17 May 2016 Page 5 of 5

8 Merger of Hinchingbrooke Health Care NHS Trust and Peterborough and Stamford Hospitals NHS Foundation Trust Outline Business Case 17 MAY 2016 VERSION 2.0 FINAL 1 Page HHCT/PSHFT OBC v2.0 FINAL

9 Version Date Issued Distribution Feb 2016 PMB 10 Feb Mar 2016 PMB 16 Mar Mar 2016 March Trust Board Apr 2016 April Trust Board May 2016 PMB 13 May May 2016 Final May Trust Board 2 Page HHCT/PSHFT OBC v2.0 FINAL

10 Abbreviations AHP Allied Health Professionals MRI Magnetic Resonance Imaging BTA Business Transfer Agreement NHS National Health Service CCG Clinical Commissioning Group NHSE NHS England CCS Cambridgeshire Community Services NHS I NHS Improvement CPCCG Cambridgeshire and Peterborough NHSLA NHS Litigation Authority CCG CEO Chief Executive Officer NIA NHS Improvement Authority CIP Cost Improvement Plan NPV Net Present Value CMA Competition and Markets Authority NTDA NHS Trust Development Authority CQC Care Quality Commission OBC Outline Business Case CRG Clinical Reference Group OD Organisational Development DGH District General Hospital OOH Out of Hours (GP service) DH Department of Health PALS Patient Advice and Liaison Service EBITDA Earnings before Interest, Taxation and Depreciation PACS Picture Archiving and Communication System ED Emergency Department PAS Patient Administration System EoE East of England PBCIP Post business case implementation plan FBC Full Business Case PCT Primary Care Trust FRR Financial Risk Rating PDP Personal Development Plan FT Foundation Trust PFI Private Finance Initiative GP General Practitioner PMO Programme Management Office GRR Governance Risk Rating POD Point of Delivery HES Hospital Episodes Statistics PRCC Principles and Rules for Cooperation and Competition HHCT Hinchingbrooke Healthcare NHS Trust PSD Provider Support Directorate HR Human Resources PSHFT Peterborough and Stamford Hospitals NHS Foundation Trust HoT Heads of Terms PTIIP Post Transaction Integration and Implementation Plan IM&T Information Management and PWC Price Waterhouse Cooper Technology ISAS Imaging Services Accreditation QIPP Quality, Innovation, Productivity and Scheme Prevention IT Information technology SCBU Special Care Baby Unit JSNA Joint Strategic Needs Assessment SLA Service Level Agreement KPI Key Performance Indicator SLCCG South Lincolnshire CCG LHE Local Health Economy SNAP Stroke National Audit Programme LINks Local Involvement Networks TDA Trust Development Authority LTFM Long Term Financial Model TUPE Transfer of Undertakings (Protection of Employment) Regulations 2006 MDT Multi-Disciplinary Team WTE Whole Time Equivalent MoU Memorandum of Understanding 3 Page HHCT/PSHFT OBC v2.0 FINAL

11 Contents 1. Executive summary Introduction and background Purpose of this Outline Business Case (OBC) Purpose of a full business case (FBC) Background Conclusions The evidence for change Clinical sustainability Matching available capacity to meet demand Financial sustainability Support for closer collaboration Constraints and dependencies Project management Conclusion Options appraisal Summary Objectives of the Local Health Economy (LHE) Background previously considered options Options for collaboration between PSHFT and HHCT Assessment of short list options for collaboration Appraisal of options Summary of savings Conclusion and recommendation Benefits Benefits summary Phasing of costs, savings and CIPS Risks Conclusions The Financial Case The merged trust PSHFT HHCT Sensitivity analysis Page HHCT/PSHFT OBC v2.0 FINAL

12 7. Clinical vision and organisational design Our joint clinical vision Areas the collaborating trusts will serve Benefits for patients Benefits for staff Organisational structure Future board arrangements and structure Performance management Programme timeline, governance and management Programme overview Plan to Full Business Case approval Legal and regulatory approvals Implementation planning - principles and approach Communication and engagement Post-Merger Integration and Implementation Plan (PMIIP) Integration and Implementation Blueprint Benefits realisation strategy Risks Risk Assessment and management Current project risks Risks of not proceeding Risks of moving to a single organisation Risks of proceeding Appendices Table of Figures Figure 1 NHS A&E performance FY04 to FY Figure 2 - NHS trusts end of year financial results FY10 to FY Figure 3 Governance of the Cambs and Peterborough STP work Figure 4 - Trusts at a glance Figure 5 - Hospitals around HHCT and PSHFT Figure 6 - HHCT and PSHFT catchment areas Figure 7 - Cambridgeshire and Peterborough CCG population forecasts Figure 8 - ONS forecast population growth for South Lincolnshire CCG area Figure 9 - Clinical services by trust Figure 10 - CQC ratings of PCH services from inspections in March 2014 and May Figure 11 - HHCT CQC ratings Jan Page HHCT/PSHFT OBC v2.0 FINAL

13 Figure 12 - Better Care Better Value performance Q2 FY Figure 13 - PSHFT performance against national standards March Figure 14 - HHCT performance against national standards March Figure 15 - PSHFT and HHCT financial performance FY14 to FY Figure 16 - PSHFT Monitor risk ratings Figure 17 - Definition of clinically sustainable services Figure 18 Clinical services sustainability Figure 19 - Underlying causes of clinical unsustainability Figure 20 Specialities for focus Figure 21 - PSHFT and HHCT forecast deficits Figure 22 Collaboration constraints and dependencies Figure 23 - Long list of organisational form options across the LHE Figure 24 LHE key outcomes for organisation form changes Figure 25 Short listed stepping stones for organisation form changes in the LHE Figure 26 - Options for collaboration between PSHFT and HHCT Figure 27 - Short list of options for collaboration between PSHFT and HHCT Figure 28 - Option appraisal criteria Figure 29 - Option appraisal criteria weightings Figure 30 Summary of option appraisal Figure 31 - Summary of back office costs and savings of each option Figure 32 - Option appraisal scores and NPV Figure 33 - Benefits of merger Figure 34 - Merger savings Figure 35 Phased costs and savings Figure 36 Combined cost improvement programme Figure 37 Combined trust income and expenditure summary Figure 38 PSHFT historical I&E Figure 39 PSHFT forecast baseline I&E Figure 40 - HHCT historical I&E Figure 41 - HHCT forecast I&E Figure 42 Sensitivity analysis NPV Figure 43 - First draft of a joint vision Figure 44 Clinicians view of the impact of merger on clinical sustainability Figure 45 Proposed governance meeting structure Figure 46 - Indicative Timeline to implementation of Option Figure 47 - Programme Overview - from OBC to FBC to Statutory Transaction Figure 48 - Overview of approach - Transaction Approval & Implementation Planning Figure 49: Indicative Timeline to implementation of Option Figure 50 Transition programme board governance and work stream structure Page HHCT/PSHFT OBC v2.0 FINAL

14 1. Executive summary Peterborough and Stamford Hospitals NHS Foundation Trust (PSHFT) and Hinchingbrooke Health Care NHS Trust (HHCT) both face significant sustainability challenges. Sustainability challenge for PSHFT In their assessment of PSHFT in 2013, the Contingency Planning Team appointed by Monitor found that while clinically and operationally sustainable, Peterborough and Stamford Hospitals NHS Foundation Trust is not financially sustainable in its current form. PSHFT s financial position on 31 March 2016, i.e. the end of financial year FY16, is a deficit of 37.1m. Despite achieving above average cost improvements for the last few years, PSHFT will not be able to deliver a balanced budget for the foreseeable future without joint working with partners in the wider health economy. The PSHFT recovery plan is based on three pillars: delivery of above average cost improvement; savings through collaboration with Hinchingbrooke; and agreement with the Department of Health that the 15m additional cost of the PFI not met by tariff should be separately funded. The trust has a track record of delivering above average cost improvement for each of the past four years. External reviews have identified further savings, including Lord Carter which identified further opportunities to reduce bank and agency costs. The Department of Health will need to commit to giving the trust long-term financial support at a level that provides stability for the trust. The National Audit Office (2012), the Contingency Planning Team (2013) and PriceWaterhouseCooper (2015) all identified the need for 25m additional ongoing tariff subsidy to meet the additional costs of the PFI. The trust currently receives 10m support in the form of a subsidy, and an additional 15m is required in future. Monitor (2015) identified 10m potential joint savings from PSHFT working collaboratively with Hinchingbrooke through reducing back office and corporate costs. A combination of all three will return the trust back to a position of financial surplus. There are also clinical sustainability challenges for some services which could be mitigated through collaboration with Hinchingbrooke. Examples include gastroenterology and diagnostic imaging. Sustainability challenge for HHCT Hinchingbrooke Health Care NHS Trust (HHCT) is not sustainable in its current form, clinically or financially. Despite the passion, commitment and hard work of the hospital staff, there are services that HHCT is currently struggling to provide sustainably for its local population. Amongst those most affected are clinical haematology (blood disorders), the Emergency Department (ED) and stroke services, primarily because it has not been possible to recruit to all of the permanent consultant posts for these services. 7 Page HHCT/PSHFT OBC v2.0 FINAL

15 As a result of Hinchingbrooke s size and case mix, it is likely to face further clinical service sustainability issues in the near future. HHCT s emergency department is the third smallest in the country and relies significantly on locum doctors to provide a safe service. This is not a sustainable option in the long term. Other services such as orthogeriatrics, neurology, cardiology and end of life care services are also significantly challenged due to the size of the teams delivering the services. In the current configuration, HHCT is too small for the continued future provision of high quality sustainable modern healthcare to its local population. The HHCT Board recognises that alternative solutions are required to ensure that all the existing services continue to be provided locally on the Hinchingbrooke site in the future. The financial challenge at HHCT is also significant. At 15.2%, it has one of the largest financial deficits as a proportion of turnover in the country; a FY16 deficit of 17.1m on 112m turnover The recent national financial efficiency work led by Lord Carter, identified HHCT as being the second most financially inefficient hospital in the country. HHCT annual reference costs are 14% greater than the average costs across the country of providing the same volume and case mix of activity. There is a financial plan to recover this deficit over the next five years which relies on ambitious cost reduction, significant additional revenue from a proposed Health Campus, and collaboration with other organisations to reduce back office costs. However, even if fully delivered, the clinical sustainability issues remain. The Local Health Economy The Cambridgeshire and Peterborough CCG total population is forecast to grow by 10% between 2016 and 2021, with Peterborough growing by 11% and Huntingdon over 65 age group growing by 17%. As people age, they are progressively more likely to live with multiple illnesses, disability and frailty, and therefore we can expect increased pressure and demand for services and care at HHCT and PSHFT in the future. The latest projections across Cambridgeshire and Peterborough show that the financial deficit across the NHS providers and commissioners is likely to be 250m by FY21 if things continue as they have done in the recent past. The system has incurred a collective deficit of 150m in FY16, which is one of the highest per person in the country. Meeting the future demands on services, while maintaining and improving clinical sustainability for patients within the tight financial envelope, means there is a growing need for providers to work together and differently in the NHS. Sustainability and transformation plan Across the country, local commissioners are leading their health and social care organisations in working together to identify how these clinical and financial challenges can be met by developing Sustainability and Transformation Plans (STP) by June Lincolnshire Clinical Commissioning Groups are doing this to cover the south Lincolnshire patients although it mainly focusses on the acute providers within Lincolnshire. PSHFT and 8 Page HHCT/PSHFT OBC v2.0 FINAL

16 HHCT are directly involved with the STP that is being led by Cambridgeshire and Peterborough Clinical Commissioning Group and focusses upon: 1. End to end pathway redesign including primary and secondary care Sustainable General Practice Proactive care and prevention Urgent and Emergency Care (CPCCG is a national Vanguard site) Elective care design Maternity and neonatal services Children and Young People 2. Greater collaboration between HHCT and PSHFT 3. Financial incentives alignment 4. Utilisation of estate across Cambridgeshire and Peterborough 5. Increasing the effective use of staff skills and experience Collaboration between HHCT and PSHFT The STP work includes collaborative working between HHCT and PSHFT. Material changes to how these services are designed and delivered may happen as a result of other commissioner led work streams, but this is not an area which will be decided by the outcome of this Outline Business Case, or Full Business case approval decisions. If as part of the wider STP work, significant changes to these pathways are proposed by the CCG, they would be subject to public consultation before implementation. Maintaining core acute services at Hinchingbrooke Hospital Both trusts are passionate about providing services which are better, safer and local. They are committed to providing high quality care that is easily accessible to the local population. There may be future changes, particularly as a result of the STP, but there is a joint commitment from both trusts to ensure the ongoing provision of safe, sustainable core acute services from Hinchingbrooke Hospital. Key findings of the Outline Business Case (OBC) This document describes the drivers, options and potential benefits of greater collaboration between Hinchingbrooke Health Care NHS Trust (HHCT) and Peterborough and Stamford Hospitals NHS Foundation Trust (PSHFT). This business case shows that merger of HHCT and PSHFT will: 1. Support the ongoing provision of fragile clinical services locally on the HHCT site 2. Improve sustainability of some clinical services in PSHFT 3. Enable financial benefits of more than 9m to be achieved through the integration of back office functions 4. Improve staff experience with more realistic rotas, increased training and educational opportunities, and in so doing, improve retention and recruitment. 5. Offer more robust infrastructure for example through the single procurement and running of IT; greater flexibility of major equipment and more robust business continuity 9 Page HHCT/PSHFT OBC v2.0 FINAL

17 6. Provide real engagement with the local community through the development of a membership strategy and body in Huntingdonshire. PSHFT has over 9,000 members with public and staff representation on the Council of Governors and the ability to appoint the Non-Executive Directors and hold the Board to account. This would be expanded to Huntingdonshire as a part of a merger. Next steps If the OBC recommendations are approved, a Full Business Case (FBC) for the merger of HHCT and PSHFT will be produced. Timelines agreed by both boards and the regulator for the next steps are: Engagement with the public will start from the OBC decision, and formally after the European referendum at the end of June by September 2016, complete a Full Business Case for decision by both Boards Further public engagement post FBC decision for six weeks from November 2016, if the FBC is approved by both Boards and the regulator, commence implementation Subject to all necessary approvals, the formal merger would take place on 1 April The FBC will be the document upon which the final decision by the Boards will be made on the collaboration between the organisations. The FBC will then be sent to regulators for review and approval. This will include the main conclusions contained in the body of the OBC and a more detailed review of both organisations, the case for change and the opportunities and risks associated with any future transaction. During the interim period, both trusts will work together to provide safe sustainable services, particularly in those areas already identified as being unsustainable. To ensure these plans are considered and commented on both internally and externally, public engagement will be undertaken over a four month period. These benefits, and others to be explored as a full business case is prepared, will be delivered through a merged organisation. This will be achieved by April 2017 with some benefits being realised from autumn 2016 and the full benefits being delivered over a four year timetable, i.e. autumn Recommendation from Stephen Graves, CEO PSHFT and Lance McCarthy CEO HHCT The Boards at both trusts are asked to approve this Outline Business Case which shows the clear clinical and financial benefits for both organisations. In doing so the Boards agree to work together to deliver a Full Business Case (FBC) by the end of September The FBC will confirm the date (subject to approval) of a merged organisation. This is currently planned to be 1 st April Page HHCT/PSHFT OBC v2.0 FINAL

18 2. Introduction and background The aims and objectives of this outline business case, and what will be included in a full business case is described in this chapter. It also describes national and local background information which sets the scene for the case. 2.1 Purpose of this Outline Business Case (OBC) Peterborough and Stamford Hospitals NHS foundation Trust (PSHFT) and Hinchingbrooke Health Care NHS Trust (HHCT) both face significant challenges. In their assessment of PSHFT in 2013, the Contingency Planning Team appointed by Monitor found that while clinically and operationally sustainable, Peterborough and Stamford Hospitals NHS Foundation Trust is not financially sustainable in its current form. 1 The HHCT Board recognises the immediate and medium term clinical sustainability challenges faced by some of its services, as well as the significant financial challenges as it has one of the worst percentage deficits in the NHS. Although there is a very challenging plan to address the financial situation, up until now there has been no realistic plan to address its clinical sustainability issues. Aim: This document describes the drivers and options and potential benefits of greater collaboration between Hinchingbrooke Health Care NHS Trust (HHCT) and Peterborough and Stamford Hospitals NHS Foundation Trust (PSHFT). Objectives: The production of this document was agreed in a signed Memorandum of Understanding which describes how both organisations will explore greater collaboration to support the future delivery of sustainable services for the benefit of patients and taxpayers, and reduce duplication and costs. The collaboration project between HHCT and PSHFT will: 1. Agree a shared vision for sustainable and safe clinical services 2. Identify savings opportunities through greater integration of back office and support functions; 3. Recommend organisational form changes which support delivery of these objectives and are: - deliverable and acceptable to patients and other stakeholders including staff; - aligned to the local health economy Sustainability and Transformation Plan; and - affordable, making the best use of public funds 1 Monitor (2013) Peterborough and Stamford Hospitals NHS Foundation Trust Recommendations of the Contingency Planning Team (September 2013) available at ons_contingency_planningteam.pdf 11 Page HHCT/PSHFT OBC v2.0 FINAL

19 The project will deliver: by May 2016, an Outline Business Case for the approval of both Trust Boards which describes the patient benefits, clinical strategy and economic impacts from a proposed organisational form change 2 by May 2016, agreed joint CIP programmes for FY17 and FY18 that deliver robust sustainable savings for the taxpayer whilst not adversely impacting on quality of care. If the decision to proceed to develop a Full Business Case (FBC) is taken in May, public engagement will commence from the end of June 2016 until early September 2016 to discuss the financial and clinical case for change At the end of September 2016, the FBC will be taken to both Trust Boards for a decision in public whether or not to proceed to implementation. If the FBC is approved by both Boards and our regulators, a further period of engagement will take place to discuss and refine the Integration and Implementation plan. At the end of November, if the FBC has been approved by regulators, the Integration and Implementation Plan will be taken to both Trust Boards for approval. If the requirements above are satisfied, implementation can then start. For the duration of the timeline described above, the project will input to and receive guidance on the clinical service reconfiguration plan being developed by Local Health Economy (LHE) system partners. The Outline Business Case (OBC) includes processes, procedures and timelines for the delivery of back office and support function savings; identification of the organisational form changes for the two organisations; and a shared vision for future clinical service provision. The business case makes recommendations to the boards of both trusts on the preferred level of collaboration to achieve these objectives. 2.2 Purpose of a full business case (FBC) Subject to the approval of the OBC, an FBC will be produced according to timelines agreed by both boards and the regulators. The FBC will be the document upon which the final decision by the Boards will be made on whether the two organisations should merge. If it is approved, it will be sent to regulators for review and approval. The FBC will include the main conclusions contained in the body of the OBC but with a more detailed review of both organisations, the case for change and the opportunities and risks associated with any future transaction. Significant additions will include: Patient pathways For those clinical services that are currently rated as being unsustainable (see section 3.1) at either organisation, the FBC will set out in some detail how these will look and feel to 2 The MoU proposed that both Boards would consider the OBC at their April meetings, however as this occurred at a time of purdah it was delayed to the public board meetings in May 12 Page HHCT/PSHFT OBC v2.0 FINAL

20 Huntingdon, Peterborough and Stamford patients. It will also set out how and in what timeframe the clinical collaboration and service sustainability can be achieved for the benefit of patients and staff Public engagement During development of the FBC there will be public engagement on the case for change and the preferred option. Public views will be gathered in face to face meetings and other forums, to ensure the best possible understanding of what concerns need to be addressed. Information gathered will be used to shape the Full Business Case Financial Analysis Financial analyses and information which will be in the FBC include: Long Term Financial Model (LTFM) A LTFM will be prepared for both trusts and for the merged trust which shows in detail the future finances over the next five years. It will include revenue and expenditure and detailed assumptions about economic conditions and future spending scenario s. This will help boards and regulators understand the financial position of both trusts in the long term if no strategic change takes place. Savings The savings associated with the recommended option in the OBC will be analysed in greater detail. This will include how the clinical and financial benefits identified in this document will be delivered, together with an updated analysis of the associated savings. This will also be compared to the FY17 budgets of both organisations. There will be a detailed non-pay review of the possible long term IT savings, and a fully costed and externally assured and benchmarked review of the costs and timeframe of integrating IT systems. Assets and Liabilities A high level review of both organisations assets and liabilities will be completed so both boards understand the risks and opportunities of the merged organisation Governance Proposals will be drawn up of how the enlarged organisation will be run and governed. This will include details on day to day delivery of services, maintaining high standards of quality care, how the enlarged workforce will be managed and operational performance managed. This will be achieved consistently across the new organisation ensuring that patients receive the same level of service and care in the new trust Competition and Markets Authority (CMA) The CMA will formally feedback its analysis of any competition issues that might be relevant to both organisations merging, and if any action is required by them, this will be included in the FBC. The implementation plan assumes that this will only require a phase 1 review. 13 Page HHCT/PSHFT OBC v2.0 FINAL

21 2.2.6 External Assurance External assurance of the financial details contained in the FBC will be provided to both boards. Assurance will be sought on the assumptions, finances, clinical pathways and the design of the future organisation. 2.3 Background National context The demands on NHS services continue to rise with attendance at A&E being one measure of this. In FY04, the number of people nationally attending A&E was around 16.5 million including attendances at walk-in centres and minor injuries units (Figure 1). Since then, the overall number of attendances has increased significantly to 22.3 million in FY15, a rise of more than 35 per cent over the period. Until FY13, attendances at walk in centres and minor injury units accounted for the vast majority of this increase, but between FY14 and FY15 there were increases of 3 per cent in attendances at hospital A&E units. Whilst the number of people visiting hospital is one reason for the rising demand, another is the ageing population which has resulted in longer stays not only in the A&E, but in the number of patients admitted to hospital, particularly in the winter months. Figure 1 NHS A&E performance FY04 to FY16 Source: Quality Watch (2016) 14 Page HHCT/PSHFT OBC v2.0 FINAL

22 Rising demand has affected quality with the number of patients being seen and treated in A&E within the four hour standard dropping from between 96-98% between FY06 and FY11 to 88% in FY16 Q3. The Care Quality Commission inspection processes have identified falling standards across the NHS. In 2012 the CQC 3 reported that 77 per cent of inspected hospital services, which includes acute, mental health and community hospitals, met all national standards. 21 per cent were not meeting at least one standard, and in one per cent of inspections, there were serious concerns. By FY15, they reported 32 per cent were rated as either good or outstanding, while 57 per cent required improvement and 11 per cent were rated inadequate. Government policy has been to protect health spending amidst an overall agenda of austerity but this means that there is an expectation that the health service will respond to rising demand for care within the agreed funding whilst maintaining standards. The rising demand for services with an above average efficiency requirement since 2009 has resulted in significant financial challenges across the NHS, particularly in the provider sector. This has become increasingly apparent since FY14 when the NHS reported its first deficit. The NHS forecast deficit for FY16 was in excess of 2.37bn at Q3 (Figure 2), with 89% of acute trusts currently in deficit. Figure 2 - NHS trusts end of year financial results FY10 to FY NHS trusts end of year financial results FY10 FY11 FY12 FY13 FY14 FY15 FY16 (Q3 forecast) As a result of all the national challenges care quality, recruitment, finances, performance standards and the NHS Constitution all parts of the country are developing system-wide Sustainability and Transformation Plans (STP) to explore areas such as greater innovation in community and primary care to drive reductions in inappropriate demand, and more 3 Care Quality Commission (2012) Our Market Report, The Care Quality Commission (June 2012) Available at 15 Page HHCT/PSHFT OBC v2.0 FINAL

23 collaboration between providers. The emphasis at the Department of Health is on reestablishing financial control through greater collaboration and whole health economy solutions, with less focus on the choice and competition elements of the Health and Social Care Act All providers are being encouraged to work together to create safe, sustainable services in the face of rising demand. With this in mind, both Lincolnshire and Cambridgeshire are preparing Sustainability and Transformation Plans by the end of June Sustainability and Transformation Plan (STP) In the Cambridgeshire and Peterborough local health economy (LHE) the STP is being led by Cambridgeshire and Peterborough Clinical Commissioning Group (CCG), supported by all local health and social care organisations. They have determined that the local health economy is currently unsustainable with economic pressures affecting all providers and commissioners. The latest projections show that the financial deficit across the NHS providers and commissioners in Cambridgeshire and Peterborough will be as high as 250m by FY21, if we continue to perform as we've done in the recent past. The system has already incurred a collective deficit of 150m in FY16, which is one of the highest per person in the country. It has been concluded that transformation of the current configuration of sites and services is required to improve value for money, whilst maintaining standards of care. The scale of the local challenge means clinicians are being asked to identify every opportunity to keep people well, support more primary led care in neighbourhoods, make sure everyone is seen in the right setting if they have an urgent need, standardise and streamline planned care along best practice pathways, and concentrate expertise where this shows demonstrable impact on outcomes. We are also looking at every opportunity to share costs of what we purchase (such as drugs) and our estates, so most funds can be directed towards front line care. The STP will be developed by June 2016 which will be informed by work being carried out by teams (Figure 3) focussing on: 1. End to end pathway redesign including primary and secondary care Sustainable General Practice Proactive care and prevention Urgent and Emergency Care (national Vanguard site) Elective care design Maternity and neonatal services Children and Young People 2. Greater collaboration between HHCT and PSHFT 3. Financial incentives alignment 4. Utilisation of estate across Cambridgeshire and Peterborough 5. Increasing the effective use of staff skills and experience 16 Page HHCT/PSHFT OBC v2.0 FINAL

24 This business case supports the second point and will be used to inform the STP. Figure 3 Governance of the Cambs and Peterborough STP work HHCT and PSHFT Key facts about both trusts are shown in Figure 4. Figure 4 - Trusts at a glance HHCT PSHFT Populations served 193, ,000 Main commissioners CPCCG CPCCG 57% SLCCG 22% NHS England 10% Others 11% Forecast turnover FY m 260.8m Forecast surplus/deficit FY m 37.1m Surplus as % of turnover -15.1% -14.2% Number of sites 1 2 Number of beds day case in Treatment Centre Staff WTE 1,553 4,019 CQC overall rating Requires improvement Good National performance standards YTD Failing ED 4 hour wait and MRSA target intermediate care at Stamford Failing ED 4 hour wait, and MRSA 17 Page HHCT/PSHFT OBC v2.0 FINAL

25 HHCT and PSHFT provide services to a combined population of around 700,000 people living predominantly in Cambridgeshire, Peterborough and South Lincolnshire. Their FY16 combined income was 372m with a combined forecast deficit of 54.8m. Between them, they employ 5,572 WTE employees. The main commissioner of services for both trusts is Cambridgeshire and Peterborough Clinical Commissioning Group although nearly a quarter of the PSHFT activity is commissioned by South Lincolnshire CCG. Local providers Neighbouring NHS hospitals include Cambridge University Hospitals, United Lincolnshire Hospitals (particularly Grantham and Pilgrim hospital at Boston), The Queen Elizabeth Hospital, Kettering General Hospital, Bedford Hospital and University Hospitals of Leicester (Figure 5). 18 Page HHCT/PSHFT OBC v2.0 FINAL

26 Figure 5 - Hospitals around HHCT and PSHFT Catchment areas The catchment area for both trusts is shown in Figure 6. HHCT provides care to 193,000 people from Huntingdonshire and the surrounding area. Peterborough and Stamford Hospital NHS Foundation Trust (PSHFT) serves a core population of over 300,000 people in Peterborough, South Lincolnshire and neighbouring areas with a further 200,000 people in the wider catchment. There is a small overlap in catchments to the southwest of Peterborough around the A1 between Peterborough and Huntingdon which includes the villages of Yaxley, Stilton and Sawtry. 19 Page HHCT/PSHFT OBC v2.0 FINAL

27 Figure 6 - HHCT and PSHFT catchment areas Lincolnshire East CCG South West Lincolnshire CCG South Lincolnshire CCG East Leicestershire and Rutland CCG Corby CCG Cambridgeshire and Peterborough CCG West Norfolk CCG Nene CCG Key Hospital sites CCG boundaries HHCT PSHFT 20 Page HHCT/PSHFT OBC v2.0 FINAL

28 Catchment populations Peterborough is one of the fastest-growing cities in the UK according to the Centre for Cities (2015) 4 study, with an annual growth rate of 1.6% between 2003 and 2013, which is equal top with Milton Keynes and over double the national average of 0.7%. Data from the Cambridgeshire and Peterborough CCG 5 shows that the total population is forecast to grow by 10% between 2016 and 2021 as shown in Figure 7. The highest population growth is in East Cambridgeshire (13%) and Peterborough (11%). In contrast, growth in the over 65 age group is forecast to grow by 14% with the highest increases in Huntingdonshire and East Cambridgeshire (17% for both). Figure 7 - Cambridgeshire and Peterborough CCG population forecasts Total Population Over 65s Change % change Change Cambridge City 136, ,300 12,100 9% 16,200 18,500 2,300 14% East Cambs 87,200 98,300 11,100 13% 16,900 19,700 2,800 17% Fenland 98, ,000 5,700 6% 22,200 24,800 2,600 12% Huntingdonshire 177, ,400 15,600 9% 33,800 39,400 5,600 17% South Cambs 153, ,800 15,900 10% 29,600 33,900 4,300 15% Peterborough 198, ,700 22,400 11% 28,400 32,200 3,800 13% % change Cambs & P boro Total 851, ,700 83,000 10% 147, ,300 21,000 14% PSHFT is an important healthcare provider to the population of South Lincolnshire. Figure 8 suggests much lower overall levels of population growth (4%) in that area, but with an 11% increase in those aged over 65. Figure 8 - ONS forecast population growth for South Lincolnshire CCG area South Lincolnshire CCG Total Population Change % change Over 65s Change % change 145, ,224 6,385 4% 34,290 37,929 3,639 11% 4 Centre for Cities (2015) Cities Outlook 2015, Centre for Cities (January 2015) Available at population-growth 5 Cambridgeshire and Peterborough Health and Care System Technical Appendices Available at page Page HHCT/PSHFT OBC v2.0 FINAL

29 Trust services Both trusts are district general hospitals; PSHFT is the larger of the two with a broader range of clinical services (Figure 9), with most of the inpatient services on the Peterborough City Hospital site, and significant outpatient services on the Stamford site, for example the pain management service based there is one of the largest in the region. As is best practice, both trusts work closely with neighbouring teaching hospitals, especially Cambridge University Hospitals, to provide specialist services through in-reach and shared staff. Figure 9 - Clinical services by trust Service HHCT PSHFT Service HHCT PSHFT Accident & Emergency ü ü Obstetrics ü ü Acute Medicine ü ü Oncology ü** ü Ambulatory Care ü ü Ophthalmology ü ü Audiology ü ü Oral and maxillofacial ü Breast Surgery ü ü Pain ü Cardiology ü ü Paediatrics ü*** ü Clinical haematology ü ü Palliative care ü ü Diabetes and Endocrinology ü ü Pathology ü ü Diagnostic imaging ü ü Plastics and dermatology ü ü Ear, Nose and Throat ü ü Radiotherapy ü Endoscopy ü ü Renal ü** ü Gastroenterology ü ü Respiratory ü ü General Medicine ü ü Rheumatology ü ü General Surgery ü ü Stroke ü**** ü Geriatric Medicine ü ü Therapy services ü ü Gynaecology ü ü Thoracic Medicine ü Lower GI ü ü Trauma and Orthopaedics ü ü Lymphedema ü Upper GI ü ü MacMillan centre ü ü Urology ü ü Neonatal ü*** ü Vascular ü* ü* *Networked service provided by CUHFT **Outpatient service only ***Provided on the HHCT site by Cambridgeshire Community Services ****Stroke rehabilitation only, no acute care Hinchingbrooke Health Care NHS Trust Hinchingbrooke Hospital opened in 1983, it has 235 general and acute beds, and in the dedicated Treatment Centre there are an additional 21 beds specifically for day cases, alongside 25 beds in the procedure unit. The trust also has an Emergency Department, a 40-bed maternity centre (in addition to the 235 general beds), and dedicated facilities for self-funded and private patients. The level 1 Special Care Baby Unit (SCBU), and the children s services at the trust are provided by Cambridgeshire Community Services (CCS) NHS Trust. 22 Page HHCT/PSHFT OBC v2.0 FINAL

30 From February 2012, Circle won the management franchise, making HHCT the first trust in the country to be managed by an independent healthcare company. At the end of March 2015, Circle withdrew their management of the trust due to financial unsustainability. Since April 2015 the trust reverted to the traditional management structure of an NHS trust. The main purchaser of Hinchingbrooke services is Cambridgeshire and Peterborough Clinical Commissioning Group (CPCCG). The trust also provides some services to patients in Bedfordshire and Northamptonshire. Hinchingbrooke employs approximately 1,550 staff in clinical and non-clinical roles with very limited outsourced services Peterborough and Stamford Hospitals NHS Foundation Trust Peterborough and Stamford Hospital NHS Foundation Trust (PSHFT) was formed on 1 April 2004 as one of the first 10 foundation trusts created under the NHS Act 2003, and is the successor organisation to Peterborough Hospitals NHS Trust. The trust moved into the new 623-bed Peterborough City Hospital in November This move brought improved services and facilities to the city including a state-of the-art Radiotherapy Unit, an Emergency Centre with a separate children s emergency department, a dedicated Women s and Children s unit, an expanded cardiac unit, a new respiratory investigations facility and an additional MRI scanner. Inpatients at Peterborough City Hospital are cared for on modern wards where there is a mix of beds including single rooms with en-suite facilities and four-bedded ward areas, each with their own bathroom. This affords patients greater privacy than before and meets the NHS same sex accommodation criteria. Stamford hospital provides a range of outpatient clinic and diagnostic services, a minor injuries unit, day case surgery, is the base for the trust s pain management services and has 22 inpatient beds. The trust employs 4,019 WTE staff across its two sites. 180 staff are based permanently at Stamford Hospital, while the remainder are at the Peterborough City Hospital. In addition, facilities services at the Peterborough City Hospital site are provided through a contracted management service as part of the trust s Private Finance Initiative (PFI) contract Regulation Both NHS providers operate in a highly regulated environment. In addition to meeting financial targets as part of the terms of authorisation, they are also required to meet national performance standards and are assessed for quality by the Care Quality Commission. As a Foundation Trust, PSHFT is accountable to its governors and regulated by NHS Improvement. HHCT is accountable to the Secretary of State through NHS Improvement Quality The trusts have different CQC ratings. As overall headline scores, HHCT are rated as Requires improvement and are currently in special measures, whereas PSHFT has been rated Good. 23 Page HHCT/PSHFT OBC v2.0 FINAL

31 PSHFT had a CQC revisit in May 2015 to review identified areas following the main trust inspection in May The final report was received and published in July 2015 giving the trust an overall rating of Good. A summary of their findings based on the initial inspection in 2014, with the updated scores for the areas they re-inspected in 2015 is shown in Figure 10. There were areas of exemplary practice that the trust was commended for and some areas that were recommended for improvement particularly with regard to medical care in medical specialties. Stamford hospital was rated overall as Good with all inspection domains rated Green. Figure 10 - CQC ratings of PCH services from inspections in March 2014 and May 2015 Urgent and emergency services Medical care Safe Effective Caring Responsive Well-led Overall Good Good Good Good Good Good Requires improvement Requires improvement Good Requires improvement Requires improvement Requires improvement Surgery Good Good Good Good Good Good Critical care Good Good Good Good Good Good Maternity and gynaecology Services for children and young people Good Good Good Good Good Good Good Good Good Good Good Good End of life care Good Good Good Good Good Good Outpatients and diagnostic imaging Good Good Good Good Good Good Overall Good Good Good Good Good Good HHCT was revisited by the CQC in October 2015, following their earlier inspection in September On re-inspection, the overall rating was Requires Improvement. Urgent and emergency care services are rated Inadequate. The summary report is shown in Figure 11. The CQC identified material improvements since their last inspection and reported that the leadership team was well placed to continue the improvements made recently. They recommended that the trust should remain in special measures, with a re-inspection planned in May Page HHCT/PSHFT OBC v2.0 FINAL

32 Figure 11 - HHCT CQC ratings Jan 2016 Urgent and emergency services Safe Effective Caring Responsive Well-led Overall Inadequate Requires improvement Good Requires improvement Inadequate Inadequate Medical care Requires improvement Requires improvement Good Requires improvement Requires improvement Requires improvement Surgery Requires improvement Good Good Good Requires improvement Requires improvement Critical care Good Good Good Good Good Good Maternity and gynaecology Good Good Good Good Good Good End of life care Requires improvement Requires improvement Good Requires improvement Requires improvement Requires improvement Outpatients and diagnostic imaging Good Not rated Good Good Good Good Overall Requires improvement Requires improvement Good Requires improvement Requires improvement Requires improvement National performance standards Operating performance across both trusts are generally similar (Figure 12). Better Care Better Value benchmarking indicators are compiled by NHS Quality Improvement, and are used to identify potential areas for improvement in efficiency 6. Figure 12 - Better Care Better Value performance Q2 FY16 Performance Q2 FY16 Nat avg HHCT Rank 7 PSHFT Rank Reducing length of stay % 13.83% % 43 Emergency readmission (14 day) 5.43% 5.40% % 145 First to follow up ratio Pre-procedure non elective bed days Outpatient DNA 8.21% 5.31% % 42 Day case rate 78.12% 77.47% % 94 Pre-procedure elective bed days The most recent data shows that both trusts have better than average: length of stay, 6 For further information, detail and indicator definitions see 7 Ranked against all NHS organisations included in the indicator 8 This indicator shows a percentage bed day saving and associated financial productivity opportunity to be realised (Lower is better). 25 Page HHCT/PSHFT OBC v2.0 FINAL

33 outpatient first to follow up ratios and Did not attend rates, and pre-procedure elective bed days. Pre procedure non-elective days and day case rates are both worse than average. As well as efficiency measures, all trusts must meet national performance standards, and penalties are imposed where they fail to do so. PSHFT met most of the national performance standards for the past 12 months with the exception of the A&E four hour standard (Figure 13). Figure 13 - PSHFT performance against national standards March 2016 Full Year Target Q1 Q2 Q3 Q4 Full year actual RTT 18 Weeks -% Incomplete Pathways within 18 weeks 92% 96.6% 95.5% 94.6% 93.6% 95.0% All Cancers - 2 Week Wait 93% 95.8% 94.7% 96.4% 96.8% 96.0% All Cancers - 31 day wait from referral to treatment 96% 99.2% 100.0% 99.4% 99.1% 99.5% All Cancers - 62 day wait from referral to treatment 85% 86.8% 88.3% 87.9% 78.7% 86.1% All Cancers - 62 day screening 90% 100.0% 97.2% 93.1% 89.1% 95.0% All Cancers - Subsequent Treatment - Drugs 98% 100.0% 100.0% 100.0% 100.0% 100.0% All Cancers - Subsequent Treatment - Surgery 94% 100.0% 100.0% 100.0% 100.0% 100.0% All Cancers - Subsequent Treatment - Radiotherapy 94% 99.5% 100.0% 94.3% 99.5% 97.9% All Cancers - Subsequent Treatment - All 96% 99.7% 100.0% 98.3% 99.7% 99.1% Breast Symptomatic 93% 94.6% 95.8% 98.3% 97.6% 96.8% A&E - Total time in A&E 4 Hours or Less 95% 91.0% 95.9% 94.4% 81.1% 90.5% C-Diff rates - Inpatients *Target to be met each month in the quarter HHCT performance in Figure 14 shows that they met all national standards for the past 12 months with the exception of A&E four hour waiting time and 62-day cancer referral to treatment. 26 Page HHCT/PSHFT OBC v2.0 FINAL

34 Figure 14 - HHCT performance against national standards March 2015 Full Year Target Q1 Q2 Q3 Q4 Full year actual RTT 18 Weeks -% Incomplete Pathways within 18 weeks 92% 97.7% 97.3% 94.9% 94.2% 96.0% All Cancers - 2 Week Wait 93% 98.0% 97.3% 96.1% 91.5% 95.7% All Cancers - 31 day wait from referral to treatment 96% 100.0% 100.0% 99.4% 100.0% 99.9% All Cancers - 62 day wait from referral to treatment 85% 80.7% 89.6% 80.3% 87.0% 84.4% All Cancers - 62 day screening 90% 100.0% 91.7% 100.0% 93.3% 91.5% All Cancers - Subsequent Treatment - Drugs 98% 100.0% 100.0% 100.0% 100.0% 100.0% All Cancers - Subsequent Treatment - Surgery 94% 100.0% 100.0% 100.0% 97.0% 99.1% All Cancers - Subsequent Treatment - Radiotherapy 94% All Cancers - Subsequent Treatment - All 96% Breast Symptomatic 93% 94.5% 94.4% 97.2% 96.1% 95.7% A&E - Total time in A&E 4 Hours or Less 95% 92.8% 96.8% 94.1% 87.1% 92.7% C-Diff rates - Inpatients Financial performance The experience of both trusts has demonstrated that reliance on traditional cost improvement plans is insufficient to reduce underlying deficits; at best it only delays future deterioration in finances and therefore, potentially impacts on the level of service. The trusts have been operating at a combined financial deficit (Figure 15) for at least two years. Figure 15 - PSHFT and HHCT financial performance FY14 to FY21 HHCT and PSHFT deficits FY14-FY16 actual and FY17-FY21 forecast Deficit - m FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Actual Forecast PSHFT HHCT The combined deficit for FY16 is 54.2m, compared with 52.3m in FY15 and 37.6m in FY Page HHCT/PSHFT OBC v2.0 FINAL

35 Since the move to the new Peterborough City hospital site in FY11, PSHFT has been operating at a financial deficit of around 40m. This is due to reliance on locum and agency staff, below tariff payments, penalties associated with the rise in emergency activity, and the national tariff not covering the premium cost of PFI buildings. Achievement of above average cost improvement has failed to deliver a surplus position over the past four years. The HHCT deficit has arisen in the past two years and is attributed mainly to the size of the organisation with recent significant increases in staff costs associated with both compliance with safe staffing levels and on-going demands of running a small hospital. With the ending of the Circle franchise in 2015 the forecast FY16 deficit is 17.5m and there will be a reliance on HHCT to use external financial support. PSHFT is anticipating a reduction in its deficit largely through delivery of above average CIP, and sustainability and transformation funding. This will reduce the forecast deficit to 17.2m by FY21. Previous reports including the National Audit Office (2012) have identified that PSHFT also require an additional 15m DH premanent subsidy to meet the recognised gap between the tariff and the cost of the PFI. The benefit of this additional funding is not included in the financial plan shown in Figure 15. Including it would bring the deficit to 2m. The benefits of merger would move the trust into a financial surplus position. HHCT current plan eliminates its deficit by FY20 through significantly higher than average CIP and delivery of an emerging estate strategy. In addition, elements of the HHCT CIP already include and are dependent on closer collaboration with PSHFT e.g. sharing corporate staff, IT systems and joint cost improvement plans Financial risk and governance ratings As a Foundation Trust, PSHFT is rated quarterly by NHS Improvement for financial and governance risk. As an NHS trust, HHCT is rated by NHS Improvement. The financial risk of a trust is rated on a scale of 1-4, where higher is better, governance is RAG rated green, amber and red. Prior to the move to the PCH site, PSHFT had a financial risk rating (FRR) of 4, which deteriorated to a 1 from FY12 after the move (Figure 16). Consequently, the trust was placed in special measures and the governance risk rating fell from amber to red. The most recent FRR improved to 2 in FY16 due to the the score being calculated on the basis of performance against budget rather than surplus/deficit as a percentage of turnover. Figure 16 - PSHFT Monitor risk ratings FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FRR GRR The financial performance deteriorated when the trust incurred the cost of the new PFI building and increased use of space in the building is a key contributor to reducing the deficit. As a non-foundation Trust, HHCT are not subject to a financial risk rating process although Section sets out their worsening financial performance over recent years. 28 Page HHCT/PSHFT OBC v2.0 FINAL

36 2.4 Conclusions This business case considers whether closer collaboration between HHCT and PSHFT should be explored in more detail, and if so, what form should be considered. These neighbouring trusts provide district general services to a combined and growing population of around 700,000 people. PSHFT is a financially unsustainable trust, whereas HHCT is both clinically and financially unsustainable. Quality at PSHFT is rated by the CQC as good, whereas HHCT is currently rated Requires Improvement and they are in special measures. In common with providers in the rest of the NHS, HHCT and PSHFT face significant challenges in meeting rising demand within the available finances. They are operating within a challenged health economy, and there is a recognition that the scale of the financial challenges needs to be met on a system wide basis. 29 Page HHCT/PSHFT OBC v2.0 FINAL

37 3. The evidence for change There are three strategic drivers for change described in more detail in this chapter: 1. Clinical sustainability some services are not currently sustainable to be delivered locally for patients now and/or are likely to become unsustainable in the future without collaboration. 2. Better use of the available NHS capacity to meet demand demand for services is increasing regionally and locally, and the current configuration of clinical capacity is not matched to meet this demand. 3. Financial sustainability both organisations are currently financially unsustainable 3.1 Clinical sustainability Despite the passion, commitment and hard work of staff, there are some services that HHCT is already struggling to provide sustainably and where working collaboratively will provide real local benefits locally to patients. There are some services at PSHFT which are not sustainable in the medium to longer term, and others where working with another trust will have benefits for Peterborough patients. This OBC focuses on maximising the quality and accessibility of safe services while managing the local and national challenges for both trusts Clinical Reference Group The Clinical Reference Group (CRG) led by the Hinchingbrooke Deputy Chief Executive is a sub group of the Project Management Board and includes clinicians from both trusts. The terms of reference are included in Appendix 2. The CRG defines sustainable services as those which are located and sized appropriately according to need, and staffed by people with suitable experience and qualifications to provide high quality services that are effective, efficient and represent value for the tax payer (Figure 17). Figure 17 - Definition of clinically sustainable services The challenge for both trusts is to: 30 Page HHCT/PSHFT OBC v2.0 FINAL

38 Sustain and subsequently improve the quality of care and ensure consistent delivery for people who need it Develop our hospitals as a good place to work which will improve recruitment and enable us to keep the staff they have. Integrate care and make best use of our expertise and facilities. Trusts working together are able to make services more sustainable as larger teams can provide the required staffing cover Sustainability example Hinchingbrooke ED third smallest department in the country Unable to recruit successfully to substantive ED consultant roles for years Only two substantive ED consultants compared with the required six Less appealing roles at HHCT due to case mix, smaller teams and fewer trainees Cover provided through use of expensive agency and locums sustainably. Single-handed or small specialties are more susceptible to loss of specialist staff as those individuals move to larger services elsewhere where they are more likely to develop their skills further. An example of clinical unsustainability associated with size is the emergency department at HHCT which is the third smallest department in the country. It has been unable to recruit successfully to substantive their ED consultant roles for a number of years due to a general shortage across the country combined with the relatively less appealing role given its size, case mix and associated poorer career opportunities. Despite all attempts to recruit, only two substantive ED consultants are in post compared with a required establishment of at least six and a 40% vacancy rate in middle grade doctors. To maintain safe services, the remaining gaps are filled by a combination of long-term locums and short-term locum shifts. This is not a sustainable solution for the ongoing provision of high quality urgent care services through an ED. In contrast, PSHFT which has been identified by Monitor as operationally and clinically sustainable, has recently appointed four ED consultants which will enable the trust to move from 9.5 WTE to 11 WTE (after people moving on and retirement) later in the year Services which are unsustainable in their current form The Clinical Reference Group defined services as being clinically unsustainable if one or more of the following conditions are met: Inability to recruit competent substantive staff despite repeated attempts Inability to match provision to demand Inability to meet required service and quality standards Working with these criteria, medical and nursing directors for both trusts identified four services that are currently unsustainable at HHCT, and eight that will become unsustainable in the medium term. PSHFT identified four services which will become unsustainable in the 31 Page HHCT/PSHFT OBC v2.0 FINAL

39 medium term. There are more services identified as significant opportunities to improve quality and efficiency through collaboration. The findings are summarised in Figure 18. Figure 18 Clinical services sustainability Unsustainable Quality/ efficiency Affecting Now Medium term opportunity PSHFT HHCT Accident & Emergency ü ü Acute Medicine ü ü ü Ambulatory Care ü ü ü Breast Service ü ü ü Cardiology ü ü Clinical haematology ü ü Diabetes ü Diagnostic imaging / Interventional radiology ü ü ü ü Endoscopy ü ü ENT ü ü ü Gastroenterology ü ü General Surgery ü ü Geriatric Medicine ü ü ü Gynaecology ü ü Haematology Maternity ü ü ü Neonatology ü ü Nephrology ü ü Neurology ü ü Oncology ü ü ü Ophthalmology ü ü ü Oral and max facs ü ü NA Ortho-Geriatrics ü ü ü Trauma and orthopaedics ü ü ü Paediatrics (provided by CCS) ü NA Pain Palliative care Plastics and dermatology ü ü Radiotherapy - Unsustainable across LHE ü ü NA Respiratory ü ü Rheumatology ü ü ü Spinal surgery ü NA ü Stroke ü ü Therapy services ü ü ü Urology ü ü ü 32 Page HHCT/PSHFT OBC v2.0 FINAL ü

40 Emerging themes and root causes of unsustainability A number of repeated themes have emerged, which the Clinical Reference Group has mapped back to three underlying root causes of unsustainability. The root causes and their impact is set out in Figure 19 below. Figure 19 - Underlying causes of clinical unsustainability Root Causes Effect 1. Uncertainty about the future Recruitment problems (particularly for HHCT A&E and acute medicine) 2. Catchment area too small to support: Optimal sized teams Trainee posts Sub-specialism Fewer clinical posts (several small/single-handed services) Limited opportunity for cross-cover / resilience Peer support limited General/routine case-mix (not varied) Training posts not supported by Deanery (+impact on recruitment pipeline) Senior staff required to act-down Little opportunity for sub-specialist interest Limited opportunity for personal development Onerous on-call requirements (also expensive) 3. National shortage of trained staff Issues above make it particularly difficult to compete for staff for roles where there is a national shortage of trained staff. 4. Overall impact Recruitment & retention difficulties Greater reliance on agency/locum staff Quality impact Cost impact Greater long term collaboration will directly improve the first three of the root causes and indirectly should place the trusts in a position to address the fourth. As part of the Outline Business Case development, a change readiness evaluation exercise was undertaken by lead clinicians to identify a short list of services where sustainability is most under threat and the need and motivation for service change was recognised by the clinical teams. Four specialty areas were selected representing medical, surgical and clinical support functions and these were explored in greater detail to understand current service delivery, and explore the opportunities and potential impact of further collaboration. Although these four were chosen for immediate exploration of possible impact, it is clear that there will be many more services that could see similar impacts. Face to face clinical team meetings were held to discuss the current situation, potential solutions, and the extent to which they could be implemented under each of the organisational form options. 33 Page HHCT/PSHFT OBC v2.0 FINAL

41 Figure 20 Specialities for focus Specialty Diagnostic Imaging Stroke Haematology ENT Reason for focus High cost area with significant service interdependencies Fragile service at both trusts, but unsustainable at HHCT under current arrangements Unsustainable at HHCT ENT on-call rotas under pressure (1 in 4 at both trusts), options for collaboration also include considering the location of short-stay surgery. A further three services which should be considered in the near future include orthopaedics, cardiology/ respiratory (to be linked to the Papworth move) and seven day gastro-intestinal bleed service. Discussions with a sample of clinicians in the four specialties demonstrate the current challenges they face and are included in Appendix 3. The CRG recommendations to improve clinical sustainability include: Work a fixed number of clinical sessions across both organisations Share out of hours and on-call cover Join-up of some, or all, clinical teams The appraisal process should consider the extent to which each of the options will support this closer working to improve clinical sustainability. Clinicians for all services acknowledged the need for single policies, procedures and IT to make it relevant to deliver care consistently and safely across both trusts National initiative sustainability pressures In addition to the current pressures identified locally, the national drive to improve quality will place additional sustainability pressures on both trusts. National guidelines The relationship between increased volume of procedures and the outcome of treatment has long been an area for attention for healthcare professionals and academics. The Royal Colleges, Improving Outcomes Guidance, Clinical Networks and NHS national guidelines are increasingly relating patient outcomes to population size and the need for enough procedures or patients to be treated per annum. National consolidation of some services has already occurred, including the introduction of major trauma centres in 2013 which significantly improved outcomes for patients involved in serious injury, and the vascular service review concentrated all but the most basic vascular procedures into regional centres. Some surgery and other specialised treatment of cancer (including paediatrics) is another area which has been centralised for some time, as have acute stroke services. As with services such as stroke, heart attack, major trauma and vascular surgery, further centralisation at specialist centres is being discussed nationally. The national maternity review led by Baroness Cumberledge, and the Urgent and Emergency Care review led by Professor Keith Willett will set new standards of care for providers and impact on every provider in the country including these two trusts. 34 Page HHCT/PSHFT OBC v2.0 FINAL

42 This business case does not consider any reconfiguration of clinical services which would be led by the commissioner, Cambridgeshire and Peterborough CCG, and would likely be subject to public consultation. Further specialist centralisation will place increased pressure on both trusts from rising clinical thresholds, minimum staffing levels and eventually potential loss of income for some specialties. Failure to collaborate therefore is likely to result in an inability of both or one trust to meet the sufficient numbers of procedures to meet the volume of patients required for accreditation, and hence services will be lost from the local area. Seven day services The government committed to make the NHS a truly seven day service as part of their manifesto. Providing on-site cover, seven days a week will be challenging for our trusts, both financially as well as in the ability to recruit, especially for specialties where we already experience shortages Recruitment and Retention Recruitment of suitably qualified staff is an issue for many trusts in the UK for specialties that are less popular for doctors in training to specialise in. Smaller trusts in particular often find it even harder to recruit to services such as stroke where potential candidates have a number of vacancies to choose from across the region. Working in a small team is considered unattractive because of the lack of peer support, junior doctors and career progression prospects, as well as often very onerous on call commitments. Both HHCT and PSHFT are struggling with recruitment and retention for some clinical roles. For example HHCT are unable to recruit a haematology consultant despite repeated attempts and have no substantive staff member in place for this service. As elsewhere in England, they are highly dependent on temporary staff from agencies. While some level of agency staffing can be positive, giving flexibility to increase or decrease staffing levels according to demand, combined current usage is very high. Both HHCT and PSHFT have gaps in some positions that are currently not filled permanently, for example ED and clinical haematology in HHCT. Sustainable, high-quality staffing depends upon services being attractive to future applicants and current staff. Making services attractive involves ensuring: front-line staff are exposed to the learning opportunities they want and need for professional development; an appropriate work-life balance, for example, enough staff on rosters to allow for a sustainable rotation of on-call duties; a culture of respect and care for staff. Working together will make our organisations more attractive to staff, improve morale and recruitment and reduce reliance upon locum and agency staff. 3.2 Matching available capacity to meet demand The current configuration of healthcare providers will not meet the anticipated demand unless there is a significant change in: Demand by somehow limiting the demand for hospital care Capacity through all providers working together 35 Page HHCT/PSHFT OBC v2.0 FINAL

43 Capacity for in-hospital care is not keeping pace with demand. Demand is forecast to grow faster and it is imperative that hospitals work together to use all the available space. PSHFT operates at an average 98% bed occupancy rate whereas HHCT has empty wards which could be used if there was greater collaboration between the two trusts. High bed occupancy at PSHFT can lead to cancellations and postponement of elective activity 9. HHCT has an estate which could be better utilised. For example, the trust has decommissioned one ward, but the ability to make better use of existing capacity is constrained because clinical staffing is not flexible enough to match the peaks in demand elsewhere in the region. Moving clinical staff between our trusts is possible, and has been done 10, but this has proved to be complex and time-consuming to arrange due to different policies, procedures and equipment availability at each of the sites. Experience has shown the overall efficiency of doing this via SLA s is reduced and therefore this does not make best use of tax payers money. Capacity and demand are often misaligned, with a variety of opportunities to better utilise our staff and facilities, so that we can reduce waiting times, avoid cancellations, and reduce the cost to the tax payer. The misalignment of capacity and demand will increase if the forecast population grows is as expected Demand Figures for Cambridgeshire and Peterborough show that the population will grow by 64,000 between 2013 and The Cambridgeshire and Peterborough CCG total population is forecast to grow by 10% (83,000) between 2016 and 2021, as shown in Figure 7. The highest population growth is in East Cambridgeshire (13%) and Peterborough (11%). In contrast, growth in the over 65 age group is forecast to grow by 14% with the highest increases in Huntingdonshire and East Cambridgeshire (17% for both). As people age, they are progressively more likely to live with complex co-morbidities, disability and frailty. People over the age of 65 account for 51% of gross local authority spending on adult social care (Health and Social Care Information Centre ) and twothirds of the primary care prescribing budget, while 70% of health and social care spend is on people with long-term conditions (Department of Health ). Having reviewed the 9 See the most recent data from NHS England (2015) Cancelled Elective Operations Data available at 10 PSHFT to HHCT elective activity transfers pilot (Orthopaedic Hips and Knees, and General Surgery) which commenced in Health and Social Care Information Centre (2013) Personal Social Services: Expenditure and Unit Costs, England Published (19 September 2013) Available at prov-rpt.pdf 12 Department of Health (2013). Improving quality of life for people with long term conditions. London: Department of Health. Available at: (accessed on 7 January 2014) 36 Page HHCT/PSHFT OBC v2.0 FINAL

44 growth in population and health needs statistics, both trusts are assuming a growth in activity as part of their capacity and finance plans over the next five years Capacity With a finite number of hospital beds, if our trusts work together we could make better use of the available capacity. The CCG has assessed that the way we provide and deliver care remains the same, then due to the growing and ageing population, 259 additional beds will be required for the population of Hinchingbrooke and Peterborough catchment by FY21. This does not include the impact of population growth in the Lincolnshire area. An assessment of the bed and theatre capacity is included in Appendix 4. PSHFT is operating at an average of 98% capacity and has a fourth floor which could be converted into two wards (total 60 beds) with the opportunity to build a further beds through creating three bed bays from single rooms. In addition, 10 beds could be built at Stamford within the current inpatient unit. HHCT has one 30-bed ward which could be renovated and brought back into use. The 140 beds described above are just short of half the total anticipated requirement to meet demand. This explains why the LHE plan includes a focus on reducing demand on hospitals through prevention and consolidation of resources within health and social care. The NHS as a whole needs to work better together across primary and acute health, and local authority boundaries, if capacity of all resources will be able to meet demand. 3.3 Financial sustainability In line with providers nationally, both trusts are in deficit for FY16 and for the foreseeable future (Figure 21). As described previously in section 2.3.9, the PSHFT deficit for FY16 was 37.1m despite average cost improvement and the HHCT deficit was 17.4m. Figure 21 - PSHFT and HHCT forecast deficits Deficit - m HHCT and PSHFT deficits FY14-FY16 actual and FY17-FY21 forecast FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Actual Forecast PSHFT HHCT Without a system wide approach, PSHFT will not deliver a balanced budget for the foreseeable future. 37 Page HHCT/PSHFT OBC v2.0 FINAL

45 There has been much debate around the size an acute trust needs to be in order to achieve clinical and financial sustainability, but there is a general consensus that economies of scale are a significant factor in a trusts ability to recruit larger and more sustainable teams. As described previously, both trusts have better than average performance in areas such as length of stay. Opportunities for further efficiency gains are diminishing and structural change across the local health economy is required to meet current and future demand with the required level of operational efficiency. The forecast shown in the chart above includes the following assumptions: Both trusts will receive sustainability and transformation funding recurrently of 4m for HHCT and 10.8m for PSHFT HHCT will generate 3m of strategic estate partnership funding from FY18 PSHFT will deliver 5m above average cost improvements in FY16 and FY17 HHCT will deliver 6.7% cost improvement in FY17 falling gradually to 2.3% by FY Support for closer collaboration Commissioner support The HHCT and PSHFT incremental organisational change work stream is part of the overall system transformation programme, and the commissioner is supportive both in principle and through engagement on the project management board of closer collaboration being explored. Formal written support for the recommended option will be required if the trusts agree to a change in their current organisational form Regulator support Our regulators support greater collaboration to address the underlying issues at both trusts. While recognising that it will not eliminate the financial deficit, the NHS Improvement (formally Monitor) strategic outline case showed that it will significantly improve finances at both trusts and be an enabler to making services sustainable Trust support The boards of both trusts have agreed a joint Memorandum of Understanding setting out how they will work together to assess the options to progress joint working. The first milestone being the completion of an Outline Business Case by May 2016 to allow for a discussion in the public domain outside of any purdah restrictions. If the recommendations of the OBC are accepted, a Full Business Case will be developed within 2-4 months to be transacted by April Constraints and dependencies The constraints and dependencies relating to any proposed collaboration are identified in Figure 22. Constraints are externally imposed and must be identified and managed from the outset. Dependencies are any actions of development required of others if the ultimate success of the collaboration is dependent on them. 38 Page HHCT/PSHFT OBC v2.0 FINAL

46 Figure 22 Collaboration constraints and dependencies Constraints Aim to maintain clinical services currently provided on each site Sustain wider support of our key stakeholders including commissioners, regulators, staff and the wider public Recognise that some staff will potentially be unable to move between sites to support service sustainability Support delivery of the wider sustainability and transformation plan being led by our commissioners Support continued delivery of services for populations currently served outside the local health economy, primarily in South Lincolnshire and East Leicestershire Meet statutory and regulator requirements placed on NHS organisations Meet competition requirements Continue to utilise PFI buildings Deliver some cost improvement within FY16 and significant savings in FY17 and beyond Proposals must be affordable Payback on investment must be within five years Dependencies Available resources including expertise and finance to develop and implement the full business case Commissioner and Regulator support including NHS Improvement Competition and Markets Authority approval Implementation and integration team, and finances to develop and implement the preferred solution Constraints The collaboration must ensure that services which are currently provided at both trusts are supported and maintained. Under the NHS Act , commissioners have a responsibility to consult with the users of any service where there are proposals to change the way those services are provided. There are no proposals in this business case to change any clinical services, rather the focus is on supporting services across the two trusts and making savings in back office and corporate services which does not require consultation under the Act. As the hospitals provide a key public service, any changes may generate wide interest, hence any proposals must be understood by and have the support of key stakeholders and regulators. Clinical support is crucial to ensure successful delivery of any option. Therefore, there will be extensive engagement with the public, stakeholders and staff. With the financial challenges faced by the wider health economy, any collaboration must also support the plans being developed by commissioners to effectively meet the anticipated demand within available resources. 13 National Health Service Act 2006 Section 242(1B) 39 Page HHCT/PSHFT OBC v2.0 FINAL

47 Although our trusts are directly involved in the sustainability and transformation plans for Cambridgeshire and Peterborough, any collaboration could also impact upon neighbouring areas, particularly South Lincolnshire which is predominantly served by PSHFT, and to a lesser degree, Bedfordshire and East Leicestershire which are served by either, or both, trusts. Any proposed collaboration must not impact negatively upon the populations in those areas Dependencies The success of the collaboration will be dependent on putting in place teams to develop and implement a Full Business Case. This will require external financial support. A team will be required to develop the FBC, and then, if the FBC is approved, an implementation and integration team will be required to deliver the preferred option. Ongoing regulator and commissioner support for the collaboration is required throughout the process. If the collaboration could affect levels of choice for residents in the Peterborough and Cambridgeshire area (we believe this is limited to maternity services), any collaboration is dependent upon support from the Competition and Markets Authority. 3.6 Project management The board for this project is chaired by the CEO for HHCT who reports twice monthly to the Health Executive, as shown in Figure 2. The project board meets every two weeks with representative executive and non-executive directors from both trusts, Cambridgeshire and Peterborough CCG, Monitor and the Trust Development Authority (now NHS Improvement). 3.7 Conclusion The drivers for this collaboration can be summarised as: 1. Safe access to current services cannot be maintained at HHCT in some clinical areas and at both trusts in the medium term due in part to the lack of sufficient numbers of specialists to run sustainable rotas at smaller DGH s, combined with increasing pressures nationally in safe staffing levels, seven day working and the increasing specialisation of services at fewer trusts. 2. Working separately, both trusts are unable to meet the future predicted demand for beds 3. Both trusts are currently not financially sustainable 4. Regulators and commissioners for both trusts support closer collaboration Both trusts face existing financial and operational challenges to meet the growing demand for care. Any collaboration between the two trusts must deliver safe and sustainable services through bringing clinical teams together to support each other with less reliance upon temporary and locum staff. Integrated back office services should facilitate the delivery of joined-up clinical services, and is a pre-requisite for some services such as imaging. 40 Page HHCT/PSHFT OBC v2.0 FINAL

48 Fully aligned policies and procedures are necessary to facilitate the safe delivery of joined up clinical services where there are significant service interdependencies. Joining up back office services should also deliver financial savings for reinvestment to meet the growing demand for clinical care and support future integration of clinical services. 41 Page HHCT/PSHFT OBC v2.0 FINAL

49 4. Options appraisal 4.1 Summary This section describes the development of a short list of four potential solutions to address the issues identified in the previous chapter. After an appraisal process it identifies option 4, a single merged organisation as the preferred option because it delivers the most sustainable clinical services and over 9m of savings per year to the tax payer. 4.2 Objectives of the Local Health Economy (LHE) In 2015, Monitor worked with the senior leaders in the local health economy to prepare a Cambridgeshire and Peterborough strategic option case: potential changes to organisational forms. It describes the shared objective for all providers and commissioners in the LHE to deliver improved changes while reducing the cost base. The objective of the LHE work is: To enable the successful implementation of the System Transformation Programme [now the Sustainability and Transformation Plan] with a focus on determining the most appropriate organisational tie up to: Enable future improved changes in the pattern of care; and Enable the Cambridgeshire and Peterborough local health economy (LHE) to collectively reduce its cost base by driving out back office savings 4.3 Background previously considered options The strategic options case was developed with all providers and commissioners in Cambridgeshire and Peterborough from September The work built upon extensive previous reviews within the local health economy, and new stakeholder engagement exercises including interviews, workshops and system meetings during September and October The key findings from the work informed the next steps on exploring changes to organisational form and functional change within the local health economy Long term aspiration of the local health economy (beyond 2020) During development of the strategic option case, a long list of options (Figure 23) were identified by stakeholders in September 2015 as a possible means to addressing the objectives and challenges of the local health economy referred to in section 4.1 and 4.2. The Dalton review also informed the possible range of options for organisational form changes across the local health economy. Each of these options was evaluated via a series of prioritisation, engagement and appraisal exercises against set criteria (see Appendix 5). 42 Page HHCT/PSHFT OBC v2.0 FINAL

50 Figure 23 - Long list of organisational form options across the LHE Given the scale of the clinical and financial challenges in our local health economy, it was agreed by all that significant transformational change was required, to close the system wide financial challenges and improve the pattern and provision of care for the population of Cambridgeshire and Peterborough, with no single organisation acting in isolation. Through an options appraisal process, an accountable care type solution was identified as the long term aspiration for the Cambridgeshire and Peterborough system at some stage beyond Further consideration was given to the preferred approach to achieve such long term change which is currently not supported by national policy. The SOC supported an incremental stepping stone approach to changing both function and form across Cambridgeshire and Peterborough, via the development of a short to medium term (0 to 5 years) programme of work involving the Cambridgeshire and Peterborough system focusing on deliverable benefits of integration and alignment (Figure 24 below). Figure 24 LHE key outcomes for organisation form changes Outcomes Long term (5 to 10 year plan) preferred solution for system wide organisational form changes: Organisation form solutions Explore system-wide Accountable Care Organisation (ACO) type solutions for beyond This requires a change in national policy Immediate to medium term (0 to 5 year plan) preferred solutions for system wide organisational form changes: Explore an incremental stepping stone approach to incremental integration starting with exploring: - Horizontal integration (form and function) - Financial alignment options - Vertical integration (function only) Source: 2015 Cambridgeshire and Peterborough strategic option case: potential changes to organisational forms 43 Page HHCT/PSHFT OBC v2.0 FINAL

51 4.3.2 Short to medium term aspiration of the local health economy (pre 2020) In 2016, the Cambridge and Peterborough providers and commissioners, continued to progress a system wide programme 14, including the SOC recommendations below: Accelerating the CCG-led system wide clinical reconfiguration programme to address the clinical challenges; and Exploring an incremental stepping stone approach towards further system integration in the short to medium term (0 to 5 years), starting with horizontal integration, including closer working between HHCT and PSHFT. Organisational form options which were excluded as part of an appraisal process, are outlined in Appendix 6. The short list options for the local health economy, including the recommendation to explore further collaboration between HHCT and PSHFT, are outlined in Figure 25. Figure 25 Short listed stepping stones for organisation form changes in the LHE Option HHCT and PSHFT merger Papworth and Cambridge University Hospitals Foundation Trust (CUHFT) merger (post the move to Cambridge) Extending Uniting Care Partnership (UCP now decommissioned) to HHCT and PSHFT Extending UCP to additional services Category Horizontal integration merger Horizontal integration merger Financial alignment/contractual options Financial alignment/contractual options Acute hospital chain (elective service pathways) Horizontal integration Chain/Federation Acute hospital chain (all services) ACO (including CCG and Acute chain plus Cambridgeshire and Peterborough Foundation Trust (CPFT) Multi community provider (GPs and HHCT or CPFT) In hospital and Out of hospital review of Children s services Horizontal integration Chain Partial ACO type solution Vertical integration Vertical integration This short list of options was evaluated (See Appendix 7), and it was recommended that horizontal integration options to maximise system efficiency benefits first, in particular those that did not impact on front line services first i.e. back office costs, including: Closer collaboration working options between PSHFT and HHCT, and Closer collaboration working options between CUHFT and PFT 14 Now referred to as the 5 year Sustainability and Transformation plan (STP) programme of work 44 Page HHCT/PSHFT OBC v2.0 FINAL

52 This recommendation was made alongside a broader five year programme of work for local health economy, including accelerating the CCG led system wide clinical reconfiguration programme to address the clinical challenges. 4.4 Options for collaboration between PSHFT and HHCT Following the Cambridgeshire and Peterborough system work, in December 2015, the Boards of PSHFT and HHCT agreed in a signed Memorandum of Understanding (MoU) (Appendix 1) to explore options for collaboration between the two organisations and the timescales by when decisions would be made. As part of the development of the Strategic Outline Case, varying levels of integration between the trusts had been explored (see Figure 26). Figure 26 - Options for collaboration between PSHFT and HHCT Functional change Possible organisation form Short listed Do nothing for now 2 standalone legal entities - PSHFT and HHCT Yes, this is a pre requisite for all business cases Shared clinical services Shared back office services Collaboration via non contractual agreement i.e. Federation via a memorandum of understanding between the two standalone legal entities - PSHFT and HHCT Collaboration via creation of a new additional legal entity i.e. Joint venture between PSHFT and HHCT Contractual service level chain, for some services, where one provider provides service on the behalf of the other (either PSHFT or HHCT, become a service provider for the other entity) Collaboration via non contractual agreement i.e. Federation via a memorandum of understanding between the two standalone legal entities - PSHFT and HHCT Collaboration via creation of a new additional legal entity i.e. Joint venture between PSHFT and HHCT Collaboration in one or two back office functions only Contractual service level chain/agreement, for some services (more than one or two), where one provider provides service on the behalf of the other (either PSHFT or HHCT, become a service provider for other entity) No, this was excluded during the strategic outline case criteria on the basis of time to implement and cost No this was excluded as part of the C&P system strategic outline case criteria No this was excluded as part of the C&P system strategic outline case criteria. Delivery of previous HHCT/PSHFT surgical service pilots demonstrated high set up and running costs No, this was excluded as part of the C&P system strategic outline case criteria No, this was excluded as part of the C&P system strategic outline case criteria No, the scale of the benefits was considered insufficient 15 Yes, this is one form of consolidation under the Dalton reforms which the strategic outline case considered feasible One operational PSHFT and HHCT remain as two standalone Yes, part of the Dalton reforms, 15 Based on estimates from existing collaborations between the trusts on HR/IT/procurement and governance 45 Page HHCT/PSHFT OBC v2.0 FINAL

53 Functional change Possible organisation form Short listed organisation Two boards, one executive team One organisation legal entities, with one executive team and one operational organisation plus service level agreements integrating back office and operational services to deliver reduced costs and sustainable services Full consolidation between PSHFT and HHCT to create a single organisation via merger or acquisition process Integrated care organisation between PSHFT and HHCT, and some or all of primary care, community, and mental health services in the area, in the next 5 years Accountable care organisation between PSHFT, HHCT, with other parts of the C&P system (including the CCG and other providers) in the next 5 years Source for organisational form descriptions: Dalton review page 18 adopted in some local authorities and identified as potential solution in the strategic outline case Yes, identified in the strategic options case as a potential solution No, this was excluded as part of the C&P system strategic outline case criteria No, this was excluded as part of the C&P system strategic outline case criteria Sharing clinical services was excluded under the chain SOC options, because it was part of the wider STP work. Integration of all back offices was included. An accountable care organisation or integrated care organisation was not considered as this model is being developed more widely within the local health economy. However, we did consider a single executive team working across two organisations as a further option. A complete merger, as proposed in the SOC, was also considered as a viable option. This left four available options for further evaluation in this outline business case. 4.5 Assessment of short list options for collaboration The four available options agreed by both trust boards in the MoU on the 18 December 2015 for further evaluation in this outline business case are included in Figure 27: Figure 27 - Short list of options for collaboration between PSHFT and HHCT Short list of available options Option 1 Option 2 Option 3 Option 4 Do nothing for now Shared back office only leading and integrating back office and operational services to deliver reduced costs and sustainable services Two boards, one executive team and one operational organisation plus option 2 (leading and integrating back office and operational services to deliver reduced costs and sustainable services) One organisation - Full consolidation between PSHFT and HHCT to create a single organisation (via merger or acquisition process) 46 Page HHCT/PSHFT OBC v2.0 FINAL

54 The four options were assessed using the criteria listed in the MoU (Figure 28), using a process agreed by both boards. A detailed report on the process is included in Appendix 8. Figure 28 - Option appraisal criteria Must be deliverable and acceptable to patients and other stakeholders including staff Aligns to STP plans that aim to secure sustainable and safe services for patients Must generate financial savings to ensure safe and sustainable services for patients Maintain safe staffing levels Maintain commissioner requested services Minimise the extent to which patient choice is reduced Ability to alignculture and other values in a short period of time Enabler to address the capacity mismatch across the patch Compatability with the clinical work streams currently underway Ability to build on local clinical collaborations and work already done [with UCP] in the community Aligns with the principles of the Five Year Forward View Continue high quality services within the financial envelope Ensure long term financial viability of any new provider forms Significant financial savings through synergies and better use of physical capacity Must be affordable, making the best use of public funds The cost of investment must not be excessive relative to the financial benefits The payback period should be reasonable Must consider what/whether central funding will be available within the LHE Options were appraised by an equal number of executives and included both Medical and Nursing Directors from both trusts in a session which was independently facilitated and monitored by an external assurer. The boards agreed weightings for the assessment criteria (Figure 29) with quality and finance equally weighted. Figure 29 - Option appraisal criteria weightings Finance - Affordable, 15 Quality - Deliverable and acceptable to stakeholders, 30 Finance - Generate financial savings, 35 Quality - Align to STP, 20 Appraisers allocated 100 points across the four options based upon how well each met the criteria. Scores were collected and any significant variation between scorers was discussed. 47 Page HHCT/PSHFT OBC v2.0 FINAL

55 There was open discussion around the different scores which led to more detailed exploration of how well each option met the criteria. 4.6 Appraisal of options The following section outlines the appraisal of the short listed option, with the recommendation that Option 4 is progressed: One organisation - Full merger of PSHFT and HHCT to create a single organisation. The process to identify the back office savings opportunities in each of the options is explained in Appendix 9. An explanation for each of the back office saving assumptions as agreed by the responsible Executive Directors and checked by both CEO s, is available in Appendix 10. A summary of the option appraisal is shown in Figure 30 and a detailed description of the option appraisal is included in Appendix 11. Figure 30 Summary of option appraisal Must be deliverable and acceptable to patients and other stakeholders including staff Aligns to STP plans that aim to secure sustainable and safe services for patients Must generate financial savings to ensure safe and sustainable services for patients Must be affordable, making the best use of public funds Option 1 Do nothing Option 2 Shared services Option 3 Two boards, one executive team TOTAL SCORES RANK Option 4 One organisation 4.7 Summary of savings Lord Carter is currently undertaking a benchmarking review of back office costs within the NHS and suggests that the total back office costs should not exceed 7% of the income revenue. At present the combined back office costs of both organisations when compared to their combined income is 9%. Once the back office savings of 9.1m as set out in this case are realised (see Appendix 9 for more detail) then the combined back office costs as a percentage of combined income will reduce to 6%. The SOC suggested 11.5m savings could be achieved through back office collaboration between the two organisations (see Appendix 7), so further savings may be available and this will be explored in the FBC. A summary of the costs of each option are shown in Figure 31. The financial assumptions used in calculating these savings are included in Appendix Page HHCT/PSHFT OBC v2.0 FINAL

56 Figure 31 - Summary of back office costs and savings of each option Departments TOTAL '000 Agreed baseline Opt 2 Opt3 Opt4 CEO 3,702 3,702 2,000 1,833 Finance 5,864 5,555 5,555 4,882 HR 4,562 4,218 4,424 3,632 Nursing 4,826 5,044 5,044 4,739 Facilities 34,698 33,831 34,010 33,744 Ops 2,058 2,004 1,556 1,556 IT/IS 6,531 6,531 6,531 5,686 Clinical Support 63,800 63,537 63,483 63,483 CEO Challenge site leadership reductions Additional 4% CIP reduction on pay in yr Non-pay - 1,763 TOTAL 126, , , ,976 Savings Savings against previous option 1,618 2,691 4,756 Saving against baseline 1,618 4,309 9,064 Agency spend on corporate and back office WTE reduction Implementation costs Redundancy ,455 Project costs ,900 Due diligence ,300 IT/IS - 4,000 Delivery of the savings will incur implementation costs and this case describes them at high level, including redundancy, project support costs, due diligence and the 4m cost of integrating IT systems between the two organisations. The IT costs may off-set future costs that both organisations may incur in any case without merger, and this will become clearer during development of the Full Business Case Net present value It is good practice to assess the value today of future savings minus the investment required by calculating the net present value (NPV). A summary of the NPV calculations of the three options over 10 years, discounted at the Treasury recommended value of 3.5% is presented in Figure 32. This shows that option 4 provides the highest return over a period of 10 years. In calculating the net present value of each option, we have assumed: NPV over 10 years (standard assumption for strategic cases) 49 Page HHCT/PSHFT OBC v2.0 FINAL

57 Redundancy is not included in the calculation of costs as per the Green Book; and Full benefits are realised from year 2 under options 2 and 3. Figure 32 - Option appraisal scores and NPV Option Net present value ( m) 0 12,167 30,801 53,452 A sensitivity analysis of each option is considered in chapter Conclusion and recommendation Following the consideration of a wide range of options, the creation of a single organisation through merger or acquisition is the preferred option as it delivers notable clinical and service benefits for patients and saves the taxpayer more than 9m per annum. There is a difference of almost 20 points between the scores for this option and the next ranked option, a single executive team with two boards. The information in the option appraisal will be scrutinised in more detail if the boards agree to progress to Full Business Case, but at this stage it is very clear that a single organisation will deliver significantly more clinical and financial benefits for both organisations than the alternatives. These benefits will positively impact on our local population groups and give them more assurance that they will have sustainable local services at their local hospital site in the longer term. It is recommended that the trusts move forward to undertake the more detailed analysis of a merger of the two organisations in an FBC and this would include an implementation plan setting out the practical and regulatory steps to merger. 50 Page HHCT/PSHFT OBC v2.0 FINAL

58 5. Benefits This chapter sets out the benefits that the recommended option will bring to patients, staff, and the wider NHS; particularly through making services more sustainable and hence safer whilst being delivered locally. 5.1 Benefits summary The key clinical benefits were identified by doctors on the clinical reference group and are summarised in Figure 33. The clinical benefits are described in more detail in Chapter 7 Clinical Vision. Figure 33 - Benefits of merger Benefit Increased certainty about the future through joint clinical vision and clear plan for clinical services Increased catchment area to support optimally sized teams, trainee posts and sub-specialism Effect Improved recruitment particularly for HHCT ED and acute medicine Reduced reliance upon agency locum staff, and reduced cost Better training, education and professional development Greater opportunity for: Multidisciplinary clinical teams Improved resilience and cross-cover, and reduced on-call commitment and cost Sub-specialism and provision of more local subspecialty services More varied case-mix and greater opportunity for training roles, and professional development Reduced overhead costs Repatriation of some more specialist activity Recruitment and retention of staff: Better training, education and professional development Reduced back office costs Reduced barriers to joint working for clinical teams Greater integration of IT systems Improved efficiency and savings for tax payers Overall impact Improved access - more timely and more locations for some services Some new services / specialist clinics and procedures Improved quality and governance More efficient use of taxpayers money Deliverable and acceptable to patients and stakeholders Contrary to concerns about the loss of key services through collaboration, this will in fact ensure the ongoing provision of some unsustainable services locally that would otherwise be lost from the Hinchingbrooke site. 51 Page HHCT/PSHFT OBC v2.0 FINAL

59 However, the awareness of members of the public and other key stakeholders about the vulnerability of some services, particularly those at HHCT, will be explained in more detail in the next phase of this work. A communication and engagement plan will be developed at an early stage to explain how this option will support the future sustainable delivery of services for both sites Generate financial savings to ensure safe and sustainable services for patients The robustness of the quality of care delivered to patients will improve as all clinical teams are joined under a single operational management structure and as a result will benefit from being part of larger teams with medical staff working across locations, sharing workload, rotas and out of hours cover. Merged, larger services that offer greater opportunities for training and sub-specialism will help enhance staff recruitment and retention, which, in turn, will have a positive impact on the care our patients receive. Patients and taxpayers will also benefit from 9m reduction in the cost of back office services which can be reinvested in clinical services to support the growing demand for patient care. Although this option does not completely resolve neither the financial nor clinical sustainability issues, work with the clinical groups suggests there are further opportunities for greater efficiencies, such as reducing reliance upon agency clinical staff, and taking advantage of savings that can be made by bulk buying from suppliers Affordability, making the best use of public funds Creating a single organisation will reduce overall expenditure on corporate and back office services, without impacting upon front line services. Figure 34 - Merger savings Total costs 000 Department Agreed baseline Post merger cost CEO department 3,702 1,833 Finance 5,864 4,882 HR 4,562 3,632 Nursing 4,826 4,739 Facilities 34,698 33,744 Ops 2,058 1,556 IT/IS 6,531 5,686 Clinical Support 63,800 63,483 CEO Challenge site leadership reductions - 18 Additional 4% CIP reduction on pay in yr Non-pay - 1,763 TOTAL COSTS 126, ,976 Saving against baseline 9,064 WTE reduction -70 Figure 34 shows the provisional savings of 9m from merger when compared with the current cost. The small reduction in nursing cost relates to corporate nursing positions, not front line nursing. 52 Page HHCT/PSHFT OBC v2.0 FINAL

60 The departmental savings are not the full opportunities, and the boards have agreed that a further 4% ( 800k) cost improvement should be deliverable throughout the organisation in year Benefits for commissioners and the health economy Commissioners support greater collaboration between the two trusts as part of the proposals for the Sustainability and Transformation Plan. Of the four options, option 4 provides the greatest level of collaboration through creating a single organisation which has been supported by the commissioner representatives at the project board. A merged organisation will be better placed to respond to any changes proposed by commissioners to better meet the needs of the population as part of the Sustainability and Transformation Plan. Merger will allow time for senior management to focus on driving through changes to deliver savings and efficiencies to support delivery of the STP. In future, commissioners will work with a single provider which will bring greater efficiencies in contract and negotiation work which is currently duplicated between both trusts. 5.2 Phasing of costs, savings and CIPS The estimated phasing of costs and savings are shown in Figure 35 and have been developed with an assessment of time taken to implement the necessary joint systems and processes, with a view that the faster new departmental structures can be delivered, the sooner staff can have assurance and stability and the benefits to patients can begin to be realised. Figure 35 Phased costs and savings Savings Costs Yr1 '000 Yr2 '000 Yr3 '000 Recurrent '000 One off 000 Costs Redundancy , ,455 Project transition costs -1, ,900 Legal and due diligence costs -1,800-1,500-3,300 IT integration costs -1,000-1,500-1,500-4,000 Savings CEO department 1,869 1,869 Finance HR Nursing Facilities IT/IS Ops Clinical Support CEO site leadership Additional 4% Non-pay 1,763 1,763 Total -1,305-3,011 1,724 9,064-11, Page HHCT/PSHFT OBC v2.0 FINAL

61 The 9m savings are recurrent, whilst the costs are one-off, and some of the IT costs may have been incurred if the organisations remained independent. Therefore, the payback period is just over one year. The transition costs of 11.6m; comprise 2.4m redundancy; 1.9m project transition costs; 4m IT integration costs; and, 3.3m legal, financial and corporate due diligence costs. Redundancy costs have been assumed as 50% of WTE reduction receiving no redundancy as they will be lost via the normal turnover of staff or alternative employment being found. Of the remainder we have assumed 25% would receive the maximum redundancy of 80k and the remaining 25% will be eligible for a reduced amount of 60k. This has been spread across the three years post FBC agreement and tracks the delivery of new structures in the various departments. Both existing trusts and the merged trust will ensure value for money in any decision it makes. IT integration costs have been estimated at 4m which excludes any costs that would be required for IT upgrades and new systems as part of a do nothing scenario. As described in Chapter 4 however, the cost of integrating IT systems between the two organisations may off-set future costs that both organisations may incur in any case without merger. There is recognition that there may be an optimism bias of up to 25%. IT integration costs will be explored in more detail at FBC stage Cost improvement plans (CIP) The back office savings identified are planned to be on top of the CIP plans already developed within each organisation and which are included within the base case financial scenario s. If we presume a transaction date of April 2017 then the combined CIP plan for the new organisation looks like: Figure 36 Combined cost improvement programme 16/17 17/18 18/19 19/20 20/21 Base-cases Back office Total 22.4m 18.9m 15.6m 19.4m 18.9m Note - In FY17 and FY18 the base case scenario s presume above average CIP delivery at PSHFT. 5.3 Risks Although there have been successful mergers in the NHS, most recently at Frimley Park and Heatherwood and Wexham Trusts, there are risks associated with this scale of organisational change. These have been identified by the Kings Fund which highlighted challenges associated with merging, in particular, conflicting cultures and business models. The merger approval process can be complex and time-consuming with as many as 10 separate organisations responsible for approving some recent mergers, although the efficacy of these organisations in assessing business cases has been questioned. The delivery of savings in line with the phasing assumptions brings both risk and benefits associated with delay or delivery before the dates in Figure Page HHCT/PSHFT OBC v2.0 FINAL

62 5.4 Conclusions There are significant clinical benefits from increased collaboration between the two trusts, which impact positively on patients and staff alike. Increased size of clinical teams will increase resilience, and the enlarged organisation will be better placed to meet the current and expected demand as a result of recruitment and retention of clinical staff. The financial benefits identified in chapter 4 have been tested and show a higher net present value for this option. The change in assumptions required to make the net present value for options 2 and 3 equal to option 4 are unrealistic. Option 4 offers significantly greater benefits than the other options in all the scenarios. 55 Page HHCT/PSHFT OBC v2.0 FINAL

63 6. The Financial Case 6.1 The merged trust From FY20 onwards, the deficit of the merged trust is forecast to be around 6.7m yearly, a significant improvement over the current forecast yearly deficit of 31.7m for both trusts in FY17. This is expected to reduce even further if agreement is reached with the Department of Health on PSHFT s residual PFI subsidy of 15m. It is therefore expected that the combined trust would be able to achieve a break even position within 3 to 4 years. The forecast income and expenditure (I&E) summary is shown in Figure 37. It has been prepared by combining the forecast I&E of both trusts and adjusting for any consolidation adjustments such as transaction synergies and associated transaction costs. It is based on the following key assumptions: the plan forecast is derived by extrapolating the FY17 Annual Plan Review (APR) submission the inflation assumptions applied for both trusts are based on the same assumptions used in the Sustainability and Transformation Plan (STP) which we understand the CCG will prepare shortly the Sustainability and Transformation (S&T) funding continues recurrently for both trusts Transaction synergies The estimated savings identified to date total 9.1m pa, including 6.9m pay and 2.2m nonpay. These figures mainly relate to expected savings from back office collaboration from the CEO, Finance, HR, Nursing, Facilities, Operations, IT/IS and Clinical Support departments. The expected savings have been phased as 2.7m (Yr1); 2.1m (Yr2); 4.2m (Yr3); 9.1m recurrently from Yr Transaction costs Transition costs of 11.7m; comprising 2.5m redundancy, 1.9m project transition costs, 4m IT integration costs and 3.3m legal and due diligence. These costs are expected to be incurred over three years and have been phased as 4m (Yr1), 5.1m (Yr2) and 2.5m (Yr3). Further work on the detail of the implementation will be undertaken should we proceed to FBC and that will improve the accuracy of these initial assumptions. The assumption built into the case is that these costs, although self-financing in the medium term as a result of the savings, will require Sustainability and Transformation funding from the Department of Health in the interim. This funding has been modelled as Public Dividend Capital (PDC). This is in line with other recent mergers Additional capital requirement Incremental activity growth in the combined trust due to the growing and ageing population will require additional capacity. It is assumed that PSHFT s 4 th floor will be converted to create an additional 60 beds, and other capital works will be required to create more three bedded bays and additional beds at Stamford. Works to bring the decommissioned ward at Hinchingbrooke back into use will also require supporting capital. The fourth floor works are 56 Page HHCT/PSHFT OBC v2.0 FINAL

64 estimated to cost 8.8m over two years, starting FY18 and completed in FY19, to be depreciated over an estimated period of 60 years in line with the current depreciation policy and is assumed that this would be funded via PDC. Bed expansion at Stamford is included in the base case, but funding for the three bedded bays and Hinchingbrooke is not yet identified. In addition, a review of both trusts IT capital requirements suggest that there is likely to be a combined spend of around 21m over 5 years in a Do Nothing scenario. However, this would be reduced by about 4m in a merged organisation as duplicate spends, such as on a new Patient Administration System (PAS), would be avoided. This is a further benefit of the merger which has not been included as a benefit in the OBC but will be considered in the FBC. This should not to be confused with the 4m IT integration cost. These estimates do not include other non-it capital needs and the impact of depreciation has not been factored into the financial calculations. Also the estimated IT costs have not been benchmarked against implementation costs in other merger situations but this will be fully assessed during the production of the Full Business Case CIPs The combined trust forecasts to deliver CIPs totalling 86.2m over the five years. This is an average CIP delivery of about 17.2m pa Cash The forecast cash position has been estimated based on the trusts delivery of its external finance limit, which on current terms is estimated at around 2.4m for the merged trust Financial Risk Rating The financial sustainability risk rating which ranges from 1 (the most serious risk) to 4 (the lowest risk), is NHS Improvement s view of the level of financial risk a trust faces to the ongoing delivery of key NHS services and its overall financial efficiency. The FRR of a merged trust shows improvement from 1 to 2 and is expected to gradually improve to at least a 3 in subsequent years in line with projected financial performance Risks rating There are inherent risks in the calculations regarding the savings and implementation costs that would exist in any financial forecast. The most significant of these are: i. Non-pay - a general assumption of 30% reduction in costs associated with total combined spend on computer software licences and maintenance contracts. Both the total combined spend and the 30% cost reduction will need significant further work in the FBC ii. Agency an assumption has been taken that no back office department will require agency staff in the combined trust, as the merging of two departments will have enough substantive staff with the required skills to fill all vacant substantive posts and meet future demands on the departments. This assumption has been checked with each executive director but remains a future risk as 3.2m was spent on agency costs in FY16 back office departments for both organisations. 57 Page HHCT/PSHFT OBC v2.0 FINAL

65 iii. Future Structures all back office areas have attempted to consider future demands on their departments and have submitted structures to manage that demand adequately. iv. Implementation Costs Where possible benchmarked information on integration costs have been used, although with the knowledge that every separate trust is entirely different, the circumstance for merger is different and local and national NHS environments are always changing, the assumption that costs may be similar is a risk. IT integration costs in particular are the most significant risk. A more detailed analysis will need to be done as part of the FBC and this will differentiate between necessary IT investment and the extra IT investment to facilitate merger. v. Risk of double count HHCT has made assumptions around income repatriation from outsourced work in the region of 1.5m yearly. This is not a risk to the potential savings, but rather the accuracy of the assumptions made in the HHCT base case as PSHFT already has plans to reduce outsourced work through its CIP schemes. Similarly, there is a potential risk with HHCT s income forecast with respect to clinical collaboration plans with PSHFT of c. 0.4m yearly, which have not been discussed in any detail. vi. Strategic Estates Partnership (SEP) HHCT s forecast assumes around 2-3m share of net profit from the joint venture. There is a risk that the forecast profit may not materialise to the expected level due to start-up risks or deals once concluded are not as beneficial. vii. HHCT has already included clinical collaborations in its base case although it has no agreements with another organisation as to what those are. As with (v.) above, this is not a risk to the potential savings, but rather the accuracy of the assumptions made in the HHCT base case. 58 Page HHCT/PSHFT OBC v2.0 FINAL

66 Figure 37 Combined trust income and expenditure summary Combined Trust - Option 4 units Out-turn Plan Forecast Forecast Forecast Forecast Summary Income and Expenditure Account Operating income (inc. in EBITDA) Clinical income m Non-Clinical income m Total operating income, inc. in EBITDA m Operating expenses (inc in EBITDA) Employee expense m (247.3) (248.4) (244.7) (245.1) (245.6) (249.8) Non-Pay expense m (119.9) (125.6) (129.3) (132.5) (136.3) (140.7) Transaction Synergies m PFI / LIFT expense m (21.2) (22.6) (22.6) (23.4) (23.9) (24.5) Total operating expense, inc. in EBITDA m (388.4) (393.9) (394.5) (396.9) (396.8) (405.9) EBITDA m (16.3) EBITDA margin % % -4.4% 2.7% 4.5% 5.7% 7.5% 7.8% Transaction costs m (4.0) (5.1) (2.5) Other Operating expenses m (22.5) (20.3) (20.1) (20.5) (20.9) (21.4) Non- Operating income m Non-Operating expenses m (18.1) (18.8) (18.8) (18.9) (19.1) (19.7) Surplus / (Deficit) after tax m (54.8) (32.0) (25.6) (17.7) (7.8) (6.7) Summary Statement of Financial Position Non-current assets m Current assets (excl Cash) m Cash and cash equivalents m Current liabilities m (54.0) (53.3) (53.8) (54.1) (54.6) (55.4) Non- Current liabilities m (417.9) (447.4) (472.7) (495.2) (514.8) (524.9) Reserves m (28.7) (57.9) check Financial Sustainability Risk Rating Financial Sustainability Risk Rating Score Capital Service Cover Liquidity rating Score I&E Margin rating Score I&E Margin Variance From Plan rating Score Summary of assumptions applied in plan CIPs as a percentage of opex within EBITDA less PFI expenses % 3.7% 5.0% 4.3% 3.0% 2.7% 2.5% CIPs m Key Assumptions 1 OBC does not include financial evaluation of potential clinical reconfigurations 2 Pay Savings based on 15/16 costs; Exclude the effect of inflation and CIPs that would arise in later years 3 Funding of the implementation and integration costs via Public Dividend Capital (PDC) 4 Consolidation adjustments include PSHFT's 1.0m Project orange costs in FY 16 and FY17 5 Depreciation does not include impact of additions outside the Trusts normal capital programme 6 7 Day working - assumed it will be self-financing 7 S&T Funding ongoing 59 Page HHCT/PSHFT OBC v2.0 FINAL

67 6.2 PSHFT This section reviews the financial position of the trust in a Do nothing scenario and provides useful information on the historical and forecast position Historical trading Figure 38 shows a summary of PSHFT s historical trading for the last three years including the forecast outturn position for FY16. Figure 38 PSHFT historical I&E Summary Income and Expenditure Operating income (inc. in EBITDA) Actual Actual Out-turn Clinical income m Non-Clinical income m Total operating income, inc. in EBITDA m Operating expenses (inc in EBITDA) Employee expense m (152.5) (167.0) (171.0) Non-Pay expense m (71.8) (75.9) (79.4) PFI / LIFT expense m (19.3) (19.6) (19.4) Total operating expense, inc. in EBITDA m (243.7) (262.6) (269.8) EBITDA m (10.5) (12.4) (9.0) EBITDA margin % % (4.5%) (5.0%) (3.5%) Other Operating expenses m (14.7) (14.0) (14.2) Non- Operating income m (0.0) Non-Operating expenses m (12.5) (12.9) (13.8) Surplus / (Deficit) after tax m (37.8) (38.5) (37.1) The trust has been in a financially challenging position for at least three years, largely attributable to the cost of financing its PFI building. It has been constantly challenging itself and has found new ways to reduce cost and transform how it delivers services Annual plan forecasts The forecast plan (Figure 39) is derived by extrapolating the FY17 draft APR submission to reflect the economic assumptions of the STP group plus an additional internal CIP stretch target of 5m in FY18 and adjusting for a control total of 21.7m. The inflation assumptions applied for both trusts are based upon NHS Improvement published assumptions. To reduce the deficit further, the collaboration work suggests more savings can be achieved and this is demonstrated in the combined trust position. 60 Page HHCT/PSHFT OBC v2.0 FINAL

68 Figure 39 PSHFT forecast baseline I&E Summary Income and Expenditure Operating income (inc. in EBITDA) Plan Forecast Forecast Forecast Forecast Clinical income m Non-Clinical income m Total operating income, inc. in EBITDA m Operating expenses (inc in EBITDA) Employee expense m (174.6) (171.4) (172.5) (173.5) (176.7) Non-Pay expense m (81.2) (85.5) (87.7) (91.6) (95.6) PFI / LIFT expense m (20.7) (20.7) (21.4) (21.9) (22.4) Total operating expense, inc. in EBITDA m (276.5) (277.5) (281.6) (286.9) (294.7) EBITDA m EBITDA margin % % 2.8% 4.3% 4.6% 4.6% 4.6% Other Operating expenses m (15.0) (14.7) (15.0) (15.3) (15.6) Non- Operating income m Non-Operating expenses m (14.6) (14.9) (15.2) (15.5) (15.9) Surplus / (Deficit) after tax m (21.7) (17.1) (16.5) (16.8) (17.2) Forecast cash and capital The forecast cash position has been estimated based on the minimum cash balance required to be held under the terms of the loan with Department of Health. Forecast capital is based on the trust s annual rolling capital programme of 5m pa Historical and Forecast Cost Improvement Plans The trust has consistently met its CIP targets, and expects this to continue. The CIP forecast is based on the 2% assumption in NHSI s planning guidance. In addition, for 2016/17 and 2017/18, the trust has set an internal stretch target of 5m for each of the two years. 6.3 HHCT Historical trading HHCT s historical trading for the last 3 years and the forecast outturn position for FY16 is shown in Figure 40. The trust reported a deficit in each of the last two years (FY15 and FY16) having largely delivered financial balance before that time. The emerging deficit is attributed mainly to the size of the organisation with recent significant increases in staff costs attributable to the required compliance with safe staffing levels, and the on-going demands of running a small hospital has contributed to the trust not achieving its planned cost improvements. 61 Page HHCT/PSHFT OBC v2.0 FINAL

69 Figure 40 - HHCT historical I&E Annual plan forecasts The plan forecast in Figure 41 is derived by extrapolating the FY16 forecast position, adjusting for ordinary cost improvement expectations and reflecting the trust s strategic aspiration as an elective hub along with the development of the Health Campus. The need to collaborate on these schemes with others in the health economy is key, and brings the trust broadly into financial balance over the planning period. The trust is focusing during FY17 on ways of both improving overall efficiency along with opportunities for growth. The trust has significant bed and theatre capacity on which to base its expectation of becoming an elective hub. In addition, it has a significant ambition to develop a health campus in Huntingdon bringing together primary care, community and mental health services along with social care services onto the Hinchingbrooke site. A Strategic Estates Partnership (SEP) is being sought via a procurement process, as a vehicle to fund the significant capital investment that will be needed. 62 Page HHCT/PSHFT OBC v2.0 FINAL

70 Figure 41 - HHCT forecast I&E units Plan Forecast Forecast Forecast Forecast Summary Income and Expenditure Account Operating income (inc. in EBITDA) Clinical income m Non-Clinical income m Total operating income, inc. in EBITDA m Operating expenses (inc in EBITDA) Employee expense m (73.777) (73.286) (72.667) (72.097) (73.034) Non-Pay expense m (45.402) (44.814) (44.664) (44.638) (44.946) PFI / LIFT expense m (1.928) (1.963) (1.999) (2.040) (2.082) Total operating expense, inc. in EBITDA m ( ) ( ) ( ) ( ) ( ) EBITDA m (0.573) EBITDA margin % % -0.5% 2.3% 5.1% 7.2% 8.5% Other Operating expenses m (5.316) (5.412) (5.513) (5.624) (5.741) Non- Operating income m Non-Operating expenses m (4.151) (3.913) (3.727) (3.589) (3.789) Surplus / (Deficit) after tax m (10.028) (6.474) (2.798) One off income/costs m Normalised Surplus / (Deficit) m (10.028) (6.474) (2.798) Forecast cash and capital The forecast cash position has been estimated based on the trust s delivery of its external finance limit. No assumptions have been made on available capital for the development of an Electronic Patient Record, for example, and it is expected that any IT requirement of this sort would be funded through the need for integration around the health campus and afforded through the strategic estate partnership. In this plan, the trust expects to spend all of its internally generated funds on its general capital requirement Historical and forecast CIPs The trust has not delivered all of its expected cost improvements in either FY15 or FY16 although this has improved in FY16. For FY17 the trust has an expectation that it will deliver cost improvement of 2% above the economic assumption along with additional productivity through population growth and the repatriation of activity to Hinchingbrooke, a plan that has some traction with commissioners. The trust is actively using information from the review by Lord Carter of Coles in assessing the opportunities available, and is already working collaboratively with PSHFT in procurement and IT as one vehicle to achieve these improvements 6.4 Sensitivity analysis Given the uncertainties around assumptions, we have introduced sensitivity analysis to test the robustness of the estimates. This looks at the identified risks for example, that the project 63 Page HHCT/PSHFT OBC v2.0 FINAL

71 implementation does not run according to plan, or that the costs have not been properly estimated. In addition, it captures the potential upsides relating to savings not fully costed or captured. In calculating the downside sensitivity, we have assumed that there will be 20% less back office savings than estimated and that transaction costs are 25% higher. Similarly we have calculated the potential upsides by assuming we have not captured 10% of the estimated savings. We have applied these assumptions to the estimated savings and costs over a 10 year period at a discounted rate of 3.5% to produce the Net Present Values (NPV) shown in the below table (Figure 36). The results of the analysis show that Option 4 produces the highest net benefit, with a NPV in the range of 35.9m m; the range being estimates in a best case, likely case and worst case scenario. The best case looks at only the upsides and the worst case considers only the identified risks. In the middle is the likely case which combines the identified risks and the potential upsides. Figure 42 Sensitivity analysis NPV Option 2 Option 3 Option 4 Likely case 'm Best case 'm Worst case 'm Sensitivities of other options to Option 4 To test the sensitivities further, we considered how the other options compare to Option 4, and by how much the assumptions would need to be flexed to produce the same net benefits as Option 4. Option 3 requires a 40% upside in potential savings (from 10%) and implementation risks would have to be reduced to 5% (from 20%) to make it equal to the preferred option. A 40% upside for option 3 represents an increase in savings from 4.3m (Figure 31) to 6m. The only possible additional savings available under option 3 would arise from a single Facilities, HR team and corporate nursing. The trusts agreed that this would not be possible with two separate boards, and even if they were, they only account for an additional 1.25m saving, which is only 29% improvement in savings compared with the required 40% to make option 3 preferable to option 4. Option 2 requires a 240% upside in potential savings (from 10%) and implementation risks would have to be reduced to 5% (from 20%) to make it equal to the preferred option. It is not feasible that an upside of this magnitude could be achieved. The calculations for the transaction savings have been worked up using a methodical approach which have also been validated by external assurers, therefore we would expect 64 Page HHCT/PSHFT OBC v2.0 FINAL

72 the probability of a 40% - 240% upside to be fairly remote. In addition the probability of the implementation risks being 5% is unlikely to be realistic. Using a set of realistic assumptions therefore, merger is the most beneficial financial option. 65 Page HHCT/PSHFT OBC v2.0 FINAL

73 7. Clinical vision and organisational design 7.1 Our joint clinical vision The strategic directions of both trusts are aligned, and the current visions for each organisation fit well with each other. Both our organisations have the same strategic direction; to be the best possible DGH for their local population that seems like a good place to start. Consultant HHCT Clinicians across both sites agree that the overall aim of this work can be summarised as: Better, Safer, Local. Any collaboration should make patient services better; they should be safer, for example through providing faster access to key clinical decision makers; and they should be delivered locally by default, provided elsewhere only if this is the right and safer option. The vision and strategy for a combined organisation will be a matter for the board and governors, but this combined draft version (Figure 43) put together by clinicians is a starting point for discussion. It will be crucial for the transition and implementation phase that we have a clearly articulated vision and set of values that our staff subscribe to and feel they can get behind. They will also be a point of reference for, how we go about implementing changes. Figure 43 - First draft of a joint vision 66 Page HHCT/PSHFT OBC v2.0 FINAL

74 7.2 Areas the collaborating trusts will serve The merged organisation will continue to serve the communities served by the current trusts, namely Huntingdonshire, Peterborough and South Lincolnshire. The combined population will be around 700,000 with the main commissioners continuing to be Cambridgeshire and Peterborough CCG and South Lincolnshire CCG. 7.3 Benefits for patients The creation of larger teams will improve recruitment and retention leading to significant benefits to patient experience and quality of service. Quality of patient care will improve across both sites as services which have been rated as Patient benefit Hinchingbrooke ED Patients needing emergency treatment at Hinchingbrooke Hospital s A&E department will have greater access to a larger number of experienced consultants, nurse practitioners and junior doctors who will rotate shifts between Peterborough City Hospital s busy Emergency Department and Hinchingbrooke s A&E. This will provide a safer service that ensures staffing levels meet patient demand especially at busy times. Hinchingbrooke patients will have access to a larger team of consultants under a merged organisation. Junior medical cover will also be available to support and treat minor ailments. By rotating between the two hospitals emergency departments, consultants will also be able to fulfil training and teaching sessions, to ensure ED staff can further develop their skills. A merged team will also be a far more attractive prospect for all grades of ED staff in the future. Good in either organisation and areas of good clinical practice, can be shared across the Patient benefit Peterborough gastrointestinal bleed service The Gastroenterology service at Hinchingbrooke is good, thanks to strong leadership within the team and a high commitment to providing an out of hours on call service for patients with emergency gastro-intestinal bleeding. The service at Peterborough is, by comparison, not as strong. Under a merged organisation, both patients and staff at PSHFT would hugely benefit from the quality leadership and good working practices developed at Hinchingbrooke. Adding more staff from both organisations to the out of hours GI bleed rota, would provide sustainable cover across both hospital sites for the longer term and ensure that all patients are provided with care which meets, and exceeds, the national standards. 67 Page HHCT/PSHFT OBC v2.0 FINAL

75 new merged organisation to the benefit of all patients Making services sustainable Urgent and emergency care provision will improve across both sites as a result of the expanded teams and there will be opportunities to use capacity across both sites in a more coordinated way. Services which have been identified by the CQC as requiring review, or are otherwise unsustainable in HHCT, could continue to be provided in future as a result of the closer collaboration. Small services such as pain management which has had to close recently at HHCT could in future be provided at local outpatient clinics through the team at PSHFT. Using the clinical sustainability assessment in the evidence for change (Figure 18), the clinical reference group has assessed the impact of option 4 on the sustainability challenge faced by some services and the opportunities for quality improvement in others. These are summarised in Figure 44 below. Further detail on how these improvements will be developed and implemented will be included if there is a decision to proceed to Full Business Case. A summary of clinical services which will benefit from merger is shown in Figure 44 below. More detail is provided in Appendix 12. Figure 44 Clinicians view of the impact of merger on clinical sustainability Service Accident & Emergency Acute Medicine and geriatric medicine Ambulatory Care Breast Service Cardiology Clinical haematology Diabetes Diagnostic imaging / Interventional radiology Endoscopy/ gastroenterology ENT General Surgery Does merger address the issues/risks identified for this service? Yes - Merger facilitates a more sustainable service, but the future is influenced by national policy on A&E designation which is being led by the CCG through the System Transformation work. Partially through a single team working in a joined up way to cover service gaps in delivery on both sites. This is also linked to System Transformation work. Yes opportunities linked to economies of scale and increased use of outpatient IV antibiotic Yes - opportunities for efficiency/collaboration but no sustainability risks. Yes - opportunities for sub-specialism with greater catchment, e.g. repatriation of specialist procedures (PCI) which will ensure they can be provided locally Yes opportunity to support HHCT service with PSHFT team Yes Opportunities for efficiency/collaboration Yes opportunities for HHCT and PSHFT to reduce outsourcing reporting and use of locums through single team, but single IT system is essential Yes HHCT has a fully accredited, high quality, 7-day bleed rota which could be used to improve services for Peterborough patients Yes larger team would result in sustainable on call commitments and improve recruitment Yes improved recruitment and retention due to the improved case mix 68 Page HHCT/PSHFT OBC v2.0 FINAL

76 Service Geriatric Medicine Gynaecology Maternity Neonatology Nephrology Neurology Oncology Ophthalmology Oral and max facs Ortho-Geriatrics Trauma and orthopaedics Paediatrics service in Hinchingbrooke is provided by CCS Pain Palliative care Plastics and dermatology Radiotherapy Respiratory Rheumatology Spinal surgery Stroke Therapy services Urology Does merger address the issues/risks identified for this service? for a single team Partial see acute med. Yes joint team could lead to inpatient gynaecology service for HHCT No as no current problems, This area is being considered by the System Transformation work stream No as no current problems This area is being considered by the System Transformation work stream Yes service and advice for inpatients could be provided by Peterborough team Yes Opportunities to support HHCT Yes Opportunities for efficiency/collaboration Yes Opportunities for efficiency/collaboration Yes Opportunities for efficiency/collaboration Yes will provide more robustness to single handed services on both sites and allow cross cover during periods of annual leave so there is no service interruption for patients. Yes Opportunities for efficiency/collaboration Partially this area is being considered by the System Transformation work stream Yes would provide an opportunity for services to be delivered locally for Hunts patients as previously. Yes will provide more sustainability to a single handed medical service. Other benefits of a single service across the patch will be for staff to get experience in other settings and a more seamless service for patients moving between acute and community and home at this vulnerable time. Yes Opportunities for efficiency/collaboration Opportunity for HHCT catchment patients to access additional LINAC PSHFT closer to home. Supported by Cancer Network Yes - Opportunity for both teams to work together, particularly important after the Papworth relocation Yes Opportunities for efficiency/collaboration Yes Opportunities for collaboration will make recruitment more likely for both trusts Yes PSHFT could provide support to the rehab element of care currently unsupported at HHCT Yes HHCT opportunities for efficiency through scale and improve weekend cover Yes Opportunities for efficiency through scale 69 Page HHCT/PSHFT OBC v2.0 FINAL

77 Patient benefit Diagnostic imaging A single radiology department, based at both sites and using the same reporting system, would reduce treatment times and improve clinical outcomes. Results would be available faster as patient images could be viewed by a consultant at either hospital site, seven days a week. Waiting lists for MRI scans could be potentially shortened as patients can be offered a scan at Peterborough, Hinchingbrooke or Stamford Hospitals. A combined, more robust radiology team would give trainees the opportunity to work across all sites as, at present there is no support available for trainees to work at Hinchingbrooke. Developing trainees is the key to a more sustainable future in radiology services. By giving them greater opportunities to gain experience across all hospital sites, we can be a more attractive prospect for other radiology students in the future Patient records Patients who transfer between the two hospitals will have one set of patient records and one entry on an integrated Patient Administration System (PAS) and other clinical systems. This will improve communication between treating clinicians and improve the speed and accuracy with which clinical decisions can be made at either site regardless of where a patient might be inadvertently admitted. This means that patients will be able to access services at any of the three sites and be able to expect seamless high quality care and decision making. It will also reduce cost, for example from those incurred by duplication of tests or imaging. Access to pathology tests will also be required as part of the shared patient record and PAS. PSHFT has already commenced the procurement of a PAS and HHCT would be included in the roll out when it is procured and implemented. A merged Picture Archive and Communication System (PACS) is essential to delivering joined up care for patients, with clinicians on both sites being able to access radiology images captured on all three sites, resulting in patients being able to access the same care regardless of location. This already works well between Stamford and Peterborough and will be rolled out to Hinchingbrooke during the implementation phase. Where types/makes of clinical systems differ in the organisations, a review of both will determine which gets rolled out across all three sites based on effectiveness of the system, ability to be easily rolled out further, ability to integrate with other clinical systems and cost Integrated pathways Patient pathways will be streamlined following merger. Patients will be referred to one team but could be seen at both sites by the same clinicians as part of their overall care, improving access for patients. Integrated pathways will be delivered through merged clinical teams with a single set of clinical systems and an ability to view test results at any of the three sites. 70 Page HHCT/PSHFT OBC v2.0 FINAL

78 Patients will be registered once, even where they would ordinarily be transferred to the other site during their care, improving efficiencies. On a practical level, this will reduce patients being asked for the same information multiple times, and the same test being requested by both organisations. Information will be shared between the sites more freely improving communication between clinicians and boosting the continuity and quality of care. Patient benefit Clinical haematology Patients using the Clinical Haematology service will see improved quality and far greater continuity in their care. Hinchingbrooke patients will benefit from more, if not all, of their outpatient treatment being delivered at Hinchingbrooke rather than Peterborough. The larger team of consultants at Peterborough would fulfil rotas at both hospitals, giving Hinchingbrooke patients access to a larger team of experts across the whole range of blood diseases much closer to home. Patients who require regular ongoing hospital visits will receive seamless, high quality care from dedicated consultants whom they come to know, rather than seeing a locum, which is beneficial to their mental and physical health. A merged team will be a more attractive prospect for new doctors in this field, eliminating the recruitment issues faced by Hinchingbrooke As specialists at either site will be supported by colleagues at the other, this will improve resilience, reduce use of agency staff and avoid cancellation of appointments or procedures associated with the current lack of resilience in the individual small teams. The new staffing model will allow senior decision-makers to be at key points in the patient pathway Increased specialisation Increasing the catchment area will support a move towards sub-specialisation where individual clinicians focus upon developing specialist areas of expertise, conducting higher numbers of similar procedures. For example, under the current pathway a patient might be seen by a general orthopaedic surgeon, and then referred to a colleague. With a larger combined orthopaedic team, patients will be referred to the appropriate sub-specialist in foot and ankle, hip and knee, upper limb or hand depending upon the referral. Specialist non-acute stroke support at HHCT, which is currently supported by non-specialist physicians, will become available as the teams combine. This will provide opportunities for configuration of beds to provide the most appropriate care in the right setting with ongoing support to patients from a single team. Patients will have a clear pathway using both sites with management of the immediate aftermath of a stroke managed at Peterborough City Hospital, but with rehabilitation of Huntingdonshire patients under the same team focussed on the HHCT site Improved governance systems Governance systems will merge across the combined organisation. A single governance arrangement, with merged clinical policies, management arrangements and operational procedures, will give greater flexibility for staffing and service provision across sites. 71 Page HHCT/PSHFT OBC v2.0 FINAL

79 7.4 Benefits for staff Staff can more easily move across sites to further develop their skills and experience and see the widest set of clinical conditions possible. This will assist in improving the morale and retaining clinical staff, as well as those in corporate teams, which should in turn improve the trusts recruitment capabilities. As we move towards a permanent rather than agency workforce, this will improve the morale of current staff members. Merger will facilitate the integration of cultures, with levels of joint working across sites not seen before as clinicians work to deliver a shared vision of excellent patient outcomes delivered safely, efficiently and locally for patients. There are significant demands on staff time to support joint clinical collaborations included in the STP work and any future collaboration with other providers and commissioners. A merged organisation will be better placed to support this work as the number of clinicians involved in designing the new pathways will be halved between the two organisations. This will increase patient facing clinical time available. The current arrangement of SLAs for orthopaedics and general surgery are reliant on doctors working to two sets of clinical and operational policies. With this option, there will be only one set of policies and ways of working for clinical staff who are working in multiple locations, making things easier and safer for them. Capacity and demand can be managed more easily across sites to reduce patient waiting times and maximise their choice of where to be treated. 7.5 Organisational structure It has been suggested that the current clinical and clinical support services are organised into divisions which are managed on a cross site basis. Each division will be clinically led, usually through an experienced medically trained consultant, but supported by a divisional manager and a divisional lead nurse in a tri-partite model of management. This arrangement will provide robust clinical, nursing and operational leadership for each division and will underpin the delivery of excellent care. Each major division will operate along a business partnering framework and be supported by a dedicated individual in Finance and HR. All post holders will be accountable for delivering within quality, performance and budgetary expectations. They will also all have a key role in leading their merged teams through a period of change, providing welfare support and embedding new ways of working at pace while continuing to drive improvements in quality standards. Maintaining momentum to drive the implementation of new pathways of care will require a transformation team to support the leadership with change management, allowing managers time to maintain operational performance. Cross site management and delivery will have the benefits of ensuring: Faster and more successful integration of cultures, working across sites to deliver a shared vision of excellent patient outcomes delivered safely and efficiently. 72 Page HHCT/PSHFT OBC v2.0 FINAL

80 Improved ability to support the joint clinical collaborations as highlighted in section 5. Implementation of merged clinical and operational policies to improve safety across the sites where clinical staff are working in multiple locations. Staff move easily across sites to further develop skills and experience, cover on-call responsibilities and manpower gaps to reduce risk. Capacity and demand is managed across sites to reduce patient waiting times and maximise their choice of where to be treated. It is proposed that each of the two main acute sites will be managed on day to day basis by two Senior Associate Director of Operations. The purpose of these roles it to support day to day management and resolve problems at each of the sites; provide senior site management to staff and patients, driving site efficiency and high quality standards. This will provide the Chief Operating Officer an opportunity to work with external partners to deliver the strategic operational change required for a successful health economy. 7.6 Future board arrangements and structure Trust Boards have a number of duties both statutory and voluntary, they include: Setting the strategic direction of the trust Ensuring the care delivered to patients is safe and of high quality Ensuring value for money for the tax payer and that all public money is spent wisely and effectively to improve care for patients Ensuring services are accessible and responsive Managing significant risks to the organisation, its staff and the patients and public who visit it The Board will receive assurances on these responsibilities through a variety of board subcommittees and reports, and through proactive and direct engagement with the operational divisions, the services they provide and the patients they treat. Figure 45 shows the proposed governance with both statutory and non-statutory meetings of a Foundation Trust board that will enable it to achieve the duties as set out above. Final arrangements however would be confirmed by the newly appointed Board members. The wider governance system will provide assurance that the standards and obligations set for the trust are met as a minimum, and that organisational, clinical and financial control systems are in place and operating effectively. The output from the governance systems and reporting will provide a valuable and independent quality assurance for the performance management systems and reporting. 73 Page HHCT/PSHFT OBC v2.0 FINAL

81 Figure 45 Proposed governance meeting structure 7.7 Performance management The merged trust will, in the first years of operation, face significant challenges in maintaining and improving quality, whilst delivering day to day operational services, aligning processes and procedures and most importantly the cultures. Consequently, a robust and comprehensive performance management framework with a single set of associated performance reporting systems are essential. At the heart of this is the need to ensure that there is clear visibility and accountability for performance at all levels of the organisation. Non-achievement of performance will be managed in accordance with trust policies to ensure staff and patients receive the highest standards of care and welfare delivery. 74 Page HHCT/PSHFT OBC v2.0 FINAL

82 8. Programme timeline, governance and management 8.1 Programme overview Subject to OBC approval and agreement to proceed to FBC, public engagement would commence, subject to EU referendum purdah rules, at the end of June and continue to September. The Full Business Case will be discussed in public at the end of September 2016, which, if approved, would be followed by a period of further engagement to inform and develop the Post Transaction Integration and Implementation Plan (PTIIP) by November In total the public engagement period would be over four months. Subject to agreement and approval at each stage, our two organisations would then merge on 1 April 2017 see Figure 46. Figure 46 - Indicative Timeline to implementation of Option Legal route to transaction Of the three possible legal routes to which the new combined trust could be established we have identified that only an acquisition of HHCT by PSHFT is viable and this chapter describes how this could be achieved by April The three possible routes considered were: 1. Merger (dissolution of both trusts, and the formation of a new NHS Trust) 2. Acquisition of PSHFT by HHCT ( organisation is an NHS Trust) 3. Acquisition of HHCT by PSHFT ( organisation is an NHS Foundation Trust) All three scenarios have been considered for relative advantages and disadvantages taking into consideration examples of previous NHS transactions nationally. Specialist advice from regulators and legal advisors has also been sought. It is concluded that; in terms of process and management, the two organisations will merge taking the best of both organisations. Legally this will be achieved through PSHFT acquiring HHCT, however this would only relate to the transaction and transfer of assets and liabilities Overview of transaction An overview of the programme from OBC, to FBC, to Statutory Transaction is set out in Figure 47 below. There are two overlapping stages to the implementation plan: 75

83 1.) Plan to Approval - regulatory review and assurance, through to transaction approval 2.) Plan for Implementation 8.2 Plan to Full Business Case approval NHS Improvement s framework for significant mergers and acquisitions is as follows: Stage 1 - Strategic Options Case Stage 2 - Outline Business Case Stage 3 Full Business Case Stage 4 Decision and execution Approving this OBC and taking the decision to develop an FBC will initiate Stage 3 of this framework. The next steps will be for our regulators to formally review our OBC and advise of particular issues or risk areas that will need to be addressed in the FBC. Following OBC approval and decision to proceed to an FBC, the project board, with support from NHS Improvement, will formally notify the Competition and Markets Authority (CMA). This will initiate a formal review of the potential impact on competition. As part of this review, NHSI will provide expert advice to the CMA on the patient benefits of a merger. In parallel, we will agree Heads of Terms for the development of a Business Transfer Agreement (BTA) which will set out the nature of the transaction, the new organisation and details of assets liabilities and staff to transfer. Once we have developed the FBC in draft, we will need to undertake a due diligence exercise to assure our boards, and subsequently our regulators, that the FBC is comprehensive and robust. Figure 47 - Programme Overview - from OBC to FBC to Statutory Transaction The steps to from OBC to FBC approval and transaction taken from guidance provided by Monitor 2015, are illustrated in Figure

84 Further Trust Board decision points are: FBC Approval Accountants Report Approval Board Transaction Approval The final stage is to provide evidence of governors support (for PSHFT) and a letter of support from the Secretary of State for Health (for HHCT) before a Statutory Order is granted by NHS Improvement. 8.3 Legal and regulatory approvals Competition Mergers can benefit patients by helping providers improve the efficiency and quality of their services. At the same time, choice and competition also have an important role in encouraging providers to deliver better services. The merger review process allows for both the competition effects and the benefits of mergers to be taken into account in order to determine what is in the overall best interests of patients. Monitor and the CMA work together to ensure that the interests of patients are always at the heart of the merger review process. We want to ensure that the merger review process is well understood and operates as quickly and predictably as possible, both to serve the patient interest and to preserve public resources NHS Improvement s role with regard to Competition In summary NHS Improvement s role is to: Provide expert advice and guidance on the regulatory framework governing transactions in the NHS; Assess merger benefits and provide expert advice on benefits to the CMA; NHS Improvement would be the regulator of any merged HHCT-PSHFT organisation Competition and Markets Authority (CMA) The Competition and Markets Authority is the UK s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. The Process There are three phases to the CMA evaluation: i) Pre-notification ii) Phase 1 iii) Phase 2 (only needed if the evidence supplied at phase 1 is not sufficient to eliminate any competition concerns) Pre-notification has no time limit but is an opportunity to liaise informally with regulators and the CMA to provide data analysis, mitigating factors and patient benefits that are considered sufficient to give CMA all the information they need to fully understand the local picture to 16 Competition review of NHS mergers: A short guide for managers of NHS providers 77

85 what their data analysis may suggest is an area of concern. It is a two way dialogue that is an opportunity to prepare sufficiently well that a phase 2 referral is not required. Once a merger has been formally notified to the CMA by Monitor, the review process is as follows: Phase 1: (Lasts up to 40 working days). As part of a phase 1 review, the CMA must decide whether there is a realistic prospect that the merger will result in a substantial lessening of competition and have an adverse effect on patients and/or commissioners by significantly reducing their choice of provider, and consider Monitor s expert advice on the benefits of the merger. If the CMA believes that the merger will not result in a realistic prospect of a substantial lessening of competition, or if the benefits of the merger outweigh any lessening of competition, it will not refer the merger for a Phase 2 review and that would conclude the CMA s review of the merger. If a merger is not cleared at Phase 1, the review progresses to Phase 2. Phase 2: (Limited to 24 weeks). In Phase 2, the CMA conducts a detailed assessment and must decide whether the merger is reviewable and whether it is expected to result in a substantial lessening of competition. As part of their process to understand if competition issues exist with collaborative working, the CMA will undertake a service by service analysis of emergency and elective work and where GP s refer patients to. Data Analysis We have already engaged with NHS Improvement s Competition and Co-operation Department, which has been acting as an advisor to the collaboration project to help us understand the likely level of interest from CMA in the proposed merger. The CMA will consider as part of pre-notification and phase 1, whether the impact of reducing competition in the above services, is likely to significantly affect patients. We will also have an opportunity to provide evidence to the CMA to support the case in terms of patient benefits of the proposed merger, and measures that we might put in place to ensure that patients would not be disadvantaged by a reduction in choice. Competition - next steps PSHFT and HHCT are working to identify the possible impact for individual services. This is being done in collaboration with NHS Improvement s Competition and Co-operation Department and this, in turn, will inform pre-notification discussions with CMA. If this OBC is approved by our Boards, the next step will be to commence further detailed work to develop an FBC. As part of the FBC development, we would formally notify the CMA and commence a Phase 1 CMA review. Note: If a Phase 2 review should be required, this will have a significant impact on the transaction and implementation timeline. An FBC decision cannot be ratified without CMA approval. 78

86 8.3.4 Due diligence prior to board FBC approval and regulator review The areas of due diligence (assurance that the FBC is comprehensive and robust) required as assurance for FBC board approval and regulator review, are listed below: Clinical Financial Legal Workforce Infrastructure, including IT and estates Governance processes including quality Commercial Understanding stakeholder perspectives This due diligence forms part of the FBC process as set out in section Implementation planning - principles and approach Figure 48 below illustrates the key areas of work to be undertaken, pre and post transaction. Figure 48 - Overview of approach - Transaction Approval & Implementation Planning There are some services where it may be sensible to merge clinical or back-office teams ahead of the full organisational merger transaction. However, unless there is a compelling need to consolidate early, the focus will to on developing detailed plans to be implemented following merger. Any service or function merging early would require staff to transfer to one organisation, and the service to be provided back to the other under a service level agreement (SLA). This TUPE transfer of staff, and SLA development would mean significant additional work. It is suggested that this course of action is only pursued where there is a compelling clinical need or service benefit to merge early Possible Implementation Timeline The nature of the transition and process between approval and incorporation will be set out in the FBC and is a decision for the Trust Boards for ratification by regulators. However, it is recognised that the length of the transition period needs to be limited in order to minimise 79

87 uncertainty for staff and direct resources, enthusiasm and focus towards continued delivery of high standards of care. High level timelines have been developed to illustrate a number of options and consider the correct balance between pace and pragmatism and project timelines. Risks of merging too quickly include: Losing focus on the implementation, resulting in having to work through issues in a reactive way post-transaction. Too little time for detailed implementation planning. Not having enough senior staff capacity to both merge and run the existing services To achieve a very fast merger would also require considerable expenditure on external consultancy support. Risks of merging too slowly include: An extended period of uncertainty for our staff Staff who are more mobile, in demand or anxious about what the future may hold, may choose to leave for roles elsewhere. Others, who are not as mobile, may become overly worried, demotivated, or disenfranchised and resistant to change. There are four key factors that affect the overall potential timeline to transaction: 1) Legal route to transaction (see Sec 8.1.1) 2) Public and staff engagement (see Sec 8.5) 3) CMA approval (see Sec 8.3.3) and other Regulatory approvals 4) Resourcing of FBC & integration and implementation team(s) Figure 49: Indicative Timeline to implementation of Option Programme Governance Structure The proposed programme will be delivered through a number of work streams that will operate to drive activities within specialist areas. The oversight of the development of the FBC and detailed implementation plans will be through a Transition Programme Board (Figure 50) which will replace the existing Collaboration Project Board. 80

88 Figure 50 Transition programme board governance and work stream structure Section 8.7 outlines the implementation blueprint, which will be delivered through this programme structure. Programme Management and Governance arrangements A project team will be required to develop the FBC, but this team will need to be supplemented with additional dedicated resource to deliver the more detailed outputs required. For example, there will need to be significant focus on staff and public engagement, and an implementation plan developed to cover each and every back-office and clinical service across both organisations, as well as ensuring that the necessary assurance is in place to support regulatory review and approval at each stage. Feedback from other similar NHS transactions is that it is imperative that there is dedicated programme management and implementation planning resource to support this work. Project Management methodology It is proposed that at Programme Management Office (PMO) is established, accountable to the Transition Programme Board to coordinate and track each work stream s progress. Prince 2 17 methodology will primarily be used. 17 PRINCE2 (an acronym for Projects In Controlled Environments, version 2) is an industry standard project management methodology which encompasses quality management, control and organisation of a project with consistency and review to align with project objectives. 81

89 8.5 Communication and engagement A draft communication and engagement strategy is attached at Appendix 13. The purpose and proposed arrangements are summarised below: Purpose of the Strategy Develop stakeholder understanding of the reasons why closer working and why service change is necessary Ensure robust and effective communication and engagement systems are in place to ensure joined-up, consistent, credible, timely and well-coordinated messages to stakeholders Ensure robust systems for communicating and engaging with staff during a period of change, enabling them to shape and become advocates of the new organisation Build confidence among stakeholders in plans for working more closely together Ensure best practice in terms of communication and engagement; for example, integrity, openness, inclusivity and involvement is followed Ensure Healthwatch, the relevant Overview and Scrutiny committees and other stakeholders are engaged with. Ensure formal consultation with staff on any changes that may affect them is undertaken as required Support the development of a common vision, values and culture for closer working Start sharing a profile of closer working between the two organisations with their communities Ensure communication on potential future organisational forms (including internal stakeholders) and the commissioner-led Sustainability and Transformation Plan external stakeholder process are aligned Ensure communication is sufficiently resourced to be deliverable, using existing channels whenever possible; ensuring value for money and appropriate use of public funds at all times Communications and engagement governance arrangements A Communications and Engagement work stream will be established to oversee the development of the strategy set out above and that it delivers against the timelines and key milestones. This group will also oversee coordination of plans with the wider health economy and will include leads from the following organisations: 82 Cambridgeshire and Peterborough CCG NHS Improvement Hinchingbrooke Health Care NHS Trust Peterborough and Stamford Hospitals NHS Foundation Trust 8.6 Post-Merger Integration and Implementation Plan (PMIIP) This section sets out the early approach to implementation planning for the merger and describes the key things that must be in place for Day 1. Achieving a successful merger and a stable financial and operational future requires early and detailed planning. The actions required to achieve a smooth transition to the new organisation on Day 1 must be clear, in order to have effective control of the combined organisation, and become a fully integrated organisation as quickly as possible. The detailed planning for the successful merger must also ensure clear accountability for the delivery of the business as usual activity in the interim.

90 Planning for the new organisation must also build on the existing work underway at both our trusts, and the development of an organisational design strategy will be an example of this. The date upon which the new merged organisation is expected to come into being is dependent on the factors outlined in section 8.4.1), however, regardless of these factors, a new organisation being constituted would be subject to approval of the FBC by the two Trust Boards, Foundation Trust Governors, Regulators, and the Secretary of State for Health. Section sets out the approach to developing the benefits realisation strategy, which is how the benefits that will be delivered by the merger will be measured and tracked. 8.7 Integration and Implementation Blueprint Underpinning all implementation plans will be an emphasis on developing a single, consolidated, centralised structure; and a single set of systems, processes and policies. Activities will be focussed on the development of the Post Transaction Integration and Implementation Plan (PTIIP). This will be done in an inclusive manner that ensures that all work stream leads own and deliver these plans as part of their day-to-day activities. Performance during the merger activities must be sustained so there needs to be an early focus upon developing a shared understanding of the performance and activity at service line level. A proposed organisational structure has been developed and more detailed work now needs to take place with the corporate, functional and clinical work streams to plan for Day 1 and beyond. All specialty work stream leads will be asked to structure their plans in a common way using the change readiness evaluation process piloted with four specialty areas as part of the development of this OBC. The output of this process will be a set of clear action plans covering each of the following categories: 83 People and culture Processes and policies Systems Facilities Contracts Financial The outputs of this work will be used to determine the scale and scope of the change programme that will be initiated and implemented both pre and post-merger. This section contains an initial summary of the key deliverables planned for Day 1. We will need to take account of the priorities and interdependencies between the work streams. These plans will be completed for the FBC and tested with relevant advisers including the legal team before FBC submission. For the FBC, the PTIP will be developed and integrated into each work stream s detailed project plans with interdependencies clearly identified. These plans will highlight the actions to be completed in the run up to Day 1, and forward to the end of the second year post implementation.

91 In practice, detailed project plans will cover a rolling 12-month period and address service redesign and transformation, CIP delivery, skills and capacity development, workforce engagement and involvement and leadership development for board and clinical staff Operational and clinical leadership Operational and clinical leads and executive sponsors will be established to focus between now and September 2016 on developing a detailed plan to include the following key areas: Culture alignment Strategy formulation Policy development Information systems and reporting alignment/integration Identification of service and financial merger synergies Future organisational structures Partnership and stakeholder engagement In addition, they will work with the merger team, as well as operational and clinical leaders across our three hospitals, to help develop the requirements for the FBC. The management of the transition, from the current operational management arrangements to the new structures, is to be worked through as part of the FBC. In transition: Accountability for delivery of clinical, operational and financial performance during the transition period remains with the existing management structures and governance arrangements across our three hospitals. Accountability for the development of the operational plans, including service standards and financial and targets, including CIPs, remain with the existing management arrangements. The merger work streams will contribute to this process, with effective collaboration between the current management teams and the merger work streams. Planning for Day 1: On Day 1, any changes in management and control arrangements below Board level will be limited to those areas which are essential for day to day running of the trust. For other areas, the merged trust s management structure will evolve over the following year by merging the best of both organisations. Accountability for the delivery of operational plans will sit with existing operational structures and management arrangements until new arrangements are ready to be put in place. Further consideration is being given by the Project Management Board to the management of that transition and the assessment and management of the risks associated with it Communications and engagement A coordinated corporate communications team will be in place. A communication and engagement strategy (see Sec 8.5) will be ready to guide and support the positioning of the merger within the community and the workforce. Planning for Day 1: There will be a single corporate identity, including; publications, reports and stationery. Efforts will be made to achieve a single website, basic intranet and standard addresses in advance of Day 1 as a channel to engage and communicate with staff. 84

92 8.7.3 Governance Systems (Corporate) Governance Systems have been defined as integrated governance of the following: 85 Policy and procedure development Risk governance Regulatory compliance Board and membership In each of these four areas detailed plans will be developed that will enable the successful transition from two organisations into one. This section summarises some of the key actions and milestones for Day 1 in each area. Planning for Day 1: A vision, objectives and set of values will be in place for the new organisation. A Day 1 executive team will also have been appointed and there will be agreement on policies, procedures and guidance and those critical to operational and risk management will be identified. Integrated governance - the trust will have board members and terms of reference for the Board will be documented and approved. The trust will be registered with the CQC and NHS Litigation Authority and a single set of key operational and clinical policies will be in place e.g. health and safety, fire, clinical guidelines, clinical audits, and procedures for clinical untoward incidents and safeguarding children and adults etc. The trust will have a major incident plan and procedures for complaints, legal services, and coroner s inquest arrangements. The trust will also have clear arrangements in place for organisation membership, governor appointments, and patient involvement Functional level - Implementation The functional areas cover HR, Information Management and Technology (IM&T), Finance, Procurement and Estates. In each of these five areas detailed plans are being developed for the transition from two organisations into one. Planning for Day 1: Again, the emphasis will be upon having a single, consolidated, centralised structure and single systems, processes and policies. Functions will be responsible for the line management of those areas that are likely to be devolved and adopt a business partner approach. Further work will be undertaken as part of the development of the FBC to assess workforce capabilities, decisions on which functions will remain in-house etc. Some of the key planning actions are as follows: Human Resources Planning for Day 1 Following appropriate consultation as required by legislation and trust change management policies, existing NHS employees will be transferred into the merged trust.

93 86 Key employment and employee relations policies will be in place. Contracts, terms and conditions for staff will be standardised in line with the national contracts. An initial gap analysis identifying any differences between both organisations broader suite of HR policies will be complete and a plan and timetable for their harmonisation will be agreed. Organisational Development (OD) Work to establish an agreed vision for the new organisation along with an agreed set of new strategic objectives will be complete An initial exercise, through engagement of employees of both trusts, to establish both the prevailing organisational cultures, along with a clear and agreed description of the desired cultural state for the new organisation for the future will be complete. Planning for Day 1: An evaluation of each organisation s current OD programmes and provision will be complete and a roadmap to integrate such programmes will have been developed and agreed. Finance Planning for day 1: Transfer of all assets and liabilities into the merged trust A coordinated finance function, with consistent Standing Financial Instructions and management accounting structures in place A single financial IT system Contracts and SLAs for service provision will be agreed with commissioners Procurement Work has already commenced to develop coordinated procurement functions in order to increase purchasing power and increase efficiency. A Head of Procurement is already leading the procurement teams in both organisations. Estates Planning in transition: An Estates investment and divestment plan will be established. Planning for Day 1: A single estates and facilities risk register and reporting arrangements will be in place. IM&T This work stream is currently assessing the clinical requirements of the merger and further engagement will be required with the clinical work streams as they are established. Systems to enable single management reporting are being assessed. Planning for Day 1: Network integration, single service and diaries will be created. An information governance structure, policies and procedures will be established. Principle patient database systems will be aligned.

94 87 All policies will aligned with the new 'Policy for Policies'. Post implementation planning IM&T Systems for Patient Administration System (PAS) will need to be fully integrated Operational and clinical - Implementation High level clinical integration The steps below set out the intended high-level approach to clinical integration which will be applied to each clinical service separately. The overall aim is to ensure a smooth transition and the delivery of sustainable services. A change readiness evaluation process has been designed to help: Assess change readiness and prioritise service integration Identify and define specific interventions to address readiness needs Identify opportunities for clinical standardisation to improve efficiencies and patient outcomes This will then facilitate: Development of integration plans, applying a consistent approach and templates, supported by workshops with clinical teams Tracking of benefits, evidence capture and lessons learned Ongoing communication and engagement These specialty implementation plans will need further detailed work-up as part of a Full Business Case, and will be a key feature of the overall implementation plan. Developing the culture Cultural differences are increasingly thought to be a major cause of post-merger dysfunction. (Carroll, 2006) but Both our organisations have the same strategic direction; to be the best possible DGH for their local population that seems like a good place to start. Consultant HHCT. Differences in culture have not been raised as a concern throughout the clinical collaboration workshops, but the importance of how transition to merged services is managed has been raised repeatedly: It is not just about implementing what looks to be the right thing to do on paper. We must go about it the right way There are risks to losing staff, or destabilising services in any transition. Mishandled change will result in unintended consequences, and a failure to fully realise the benefits we are setting out to achieve. Staffing is fragile. Mishandled change will represent a significant risk to retention and recruitment. The Clinical Reference Group recommendations include: Respect for job plans Protection of specialist sessions

95 Rotas and OOH cover must be workable Opportunities for flexibility should be maximised Key stakeholders, including staff, will be engaged in the implementation plan as it is developed and refined to provide opportunities to maximise buy-in, but we must avoid a prolonged period of uncertainty by failing to make timely changes. Proper planning and resourcing the transition is critical. Consultant PSHFT. Operational Management Maintaining and improving patient safety, operational and financial performance in the new organisation depends on clarity of responsibility and accountability for each service line through the transition period. A clinical operational model be agreed with the medical directors, chief nurses and chief operating officers. The model will define the management team at clinical directorate and service line level, and further work will develop the wider teams and workforce within and establish their performance management and operational and professional governance arrangements. The operational management work stream will develop an integration programme around the following areas, within the governance arrangements outlined above. Each clinical directorate will consider services across the new organisation under the four headings below: i. Management of clinical risks Aligned to the work of the governance work stream, plans will be developed that will maintain the standards of clinical governance and identify improvement opportunities. Clinical risk policies will be in place and current risks to clinical services (such as pressurised rotas and use of locums, bank and agency staff) will be reviewed to determine how to configure the extensive resources and capacity that becomes available through the merger and address these where possible. ii. Leadership and care pathways There will be one management team responsible for each clinical service across all sites. A detailed organisation design will be completed with professional accountability clearly articulated. These roles will be consulted on and then filled with a relevant training programme of support provided. Care pathways will be consistent across sites with a view to implementing many of the required changes ready for day 1. iii. Financial control Financial management and control capabilities will remain aligned with the structures of the existing organisations until consultation and appointments are complete. iv. Performance Management Performance management arrangements will continue in line with the arrangements in place at the existing organisations. In anticipation of the creation of a unified structure, a single 88

96 performance management process will be developed and implemented at the point at which staff are appointed to the new organisation. 8.8 Benefits realisation strategy Further to the benefits set out earlier in this document, a benefits realisation strategy will be developed through the FBC phase to form a central part of the overall integration plan. The costs of realising the benefits will be assessed as part of the implementation planning process and built into the FBC submission. As implementation proceeds, the forecast benefits will be cross-referenced with work stream project plans, risk management plans and the corporate vision and objectives to which each benefit relates. The potential benefits will be identified using the following processes: Development of benefits captured in the OBC and FBC Discussion through the work streams, with programme board oversight Work with members of the programme management team and external advisers Identification of relevant items arising in other working papers Benefit and metric identification The prime benefits expected from the combined trust may be summarised as follows: - Providing a sustainable and viable platform for services - Providing a strengthened workforce with improved flexibility, recruitment and retention - Establishing one environment which takes the 'best from both organisations - Achieves economies of scale in corporate services, facilities, functional and clinical areas. Further work will be undertaken to develop benefit profiles for the items identified and standardised template developed. The completion of a benefit profile template ensures that the following issues are considered: Details of measurability Details of interdependencies with other benefits and projects Allocation of responsibilities for the realisation of the benefits Fitness for purpose checklist Are the dates by which the benefits should accrue clearly understood and realistic? Are the dates by which the benefits should accrue in line with the programme milestones and relevant project deliverables? Are the actual benefits accruing compared to the projected benefits? Content of the benefits realisation plan A schedule detailing when each benefit or group of benefits will be realised. The identification of appropriate milestones when a programme benefit review could be undertaken The details of any handover activities, beyond the mere implementation of a deliverable or output, to sustain the process of benefits realisation after the programme is closed Benefits realisation (delivery) plan The benefits realisation plan will be used to track the delivery of benefits across the programme. It will be owned initially by the Programme Management Office (PMO) but over 89

97 time it is intended to integrate this into the routine business management processes of the combined trust. Once developed, the plan will include the dates by which the key benefits will be delivered and ensure that these are in line with the programme milestones and project deliverables. It provides clarity about where and when the benefits will occur and who will be responsible for their delivery. The plan will show that it will be necessary to identify clear processes to sustain the process of benefits realisation after the initial integration programme is finished. The plan will include evidence of how action plans will be written to identify the activities, timelines, responsibilities, interdependencies and resources required to achieve the benefits at an operational level. The plan will give details of the key performance indicators and tracking mechanism that will be used to monitor achievement of benefits against expectations and targets. 90

98 9. Risks The risks to achieving a preferred option for collaboration that is jointly agreed by both Trust Boards have been identified, documented, and tracked throughout the development of the OBC. These risks and mitigations have been reviewed fortnightly by the HHCT/PSFHT collaboration Project Board. This section discusses the key risks to delivering the preferred option; focussing upon how the identified risks will be managed as the organisations progress from OBC to FBC, and from FBC to implementation of the preferred option, including risks to delivering its stated benefits. This includes: Impact on performance targets for both pre and post-merger Achievement of the merger benefits Potential blockages to change from staff or other stakeholders Impact on transition and financial position, particularly if transitional costs are not externally financed 9.1 Risk Assessment and management Risk assessment is a fundamental management tool and forms part of the governance and decision making process at all levels of an organisation. The risk register is a risk management tool whereby identified risks are described, scored, controls identified, mitigating actions planned and a narrative review is recorded. Risk management is a key item covered in trust reports, including the financial and operational management reports. The principles of risk management are also embedded in the trust s approach to business continuity planning, the internal and external audit reviews, local counter fraud services and security management. It should be used as a tool to drive decision making at all decision making levels in organisations, and therefore the identification and accurate reporting of risks needs to be embedded into staff culture at all levels, along with an understanding that risks reported will be acted upon appropriately by those in more senior positions. This will be vital throughout any collaborative work, in order to ensure day to day performance on quality, finance and operational performance does not slip, and in order to support the integration processes of merging the two organisations. Following approval, the project will continue to adopt sound and tested risk management processes based on both trust s risk management policies to allow the project (or shadow) board to understand the project risks and put in place mitigation measures to manage those risks. The most significant risks to the project for either or both trusts, are those which score 12 and above. These should be reviewed at each separate organisation s board or appropriately identified sub-committee to ensure the risks are adequately scrutinised, managed according to known mitigating factors and implications on the individual trusts are known. The risk register matrix of how all identified risks are scored is included in Appendix 16. Risks that are rated high or significant are deemed as unacceptable to trust boards and actions should be taken to ensure the risk becomes reduced over time. 91

99 9.2 Current project risks The full risk register of current project risks is included in the risk register in Appendix 17. These are reviewed and managed fortnightly at the project board. 9.3 Risks of not proceeding The risks of not proceeding with option 4 have been set out in chapter 5 s option appraisal descriptions of the alternative options. In summary however they include: Short, medium and long term clinical unsustainability of various services at one or both trusts, due to issues with recruitment of specialist staff and an inability to fill rota s and provide seven day services for patients. Lack of ability to improve quality by reducing variability in patient outcomes and experience. Inability to deliver CIP targets and a continuation of a deteriorating financial position, not making best use of tax-payers money. Lack of ability to find another suitable partner to collaborate with due to worsening clinical and financial position and reputation of willingness to partner. Inability to contribute to the STP both through the points above and senior staff within the organisations will need to spend increasing amounts of time managing the worsening internal pressures. 9.4 Risks of moving to a single organisation With more than 20 NHS hospital mergers in the previous five years, it is essential to review the problems and issues those mergers faced, in order that we can learn lessons and put in place robust mitigations to ensure this project does not suffer from them. Recent reviews by the Kings Fund 18 and others have led to a variety of published papers detailing the mistakes other mergers made and things the trusts will need to ensure they are adequately prepared for such a transaction. For example, although there are advantages for patients and staff in creating larger organisations as cited in Chapter 6, in practice it is evidenced that there are often disadvantages that need to be considered in order that they can be avoided, for example: The organisation becomes unresponsive and slow to make decisions, leading to lack of service developments Senior management are removed from the front line, leading to deterioration in quality of care Managers feeling removed from services and deterioration in morale Increased travel time of staff and reduced communication at all levels In almost all cases senior management had underestimated the timescale and effort involved in the mergers and the restructuring of teams and staff can easily become distracted by the merger process itself and the uncertainty of employment. In a review of mergers that occurred in the 1990 s Fulup et al (2002) 19 found that the loss of managerial focus on services during the merger had some detrimental effects on patient care. Also although 18 The Kings Fund: Foundation trust and NHS trust mergers 2010 to 2015 (September 2015) 19 Fulup (2002) Process and impact of mergers of NHS trusts: multicentre case study and management cost analysis British Medical Journal 2002 Aug 3; 325(7358):246 92

100 open, fair recruitment into merged posts is necessary, if it is viewed by junior staff that more staff from one of the original organisations seem to be appointed, then there are often feelings of disassociation with the new organisation and feelings that they have been taken over. A further issue highlighted as an unintended difficulty post-merger was understanding and addressing the cultural differences between organisations. In this business case, both trusts are local district general hospitals delivering a similar range and complexity of services and therefore many staff should feel familiar and have similar behaviours, values and ways of working. However, there will inherently be differences in some aspects of culture. If it is decided to proceed to FBC, then an implementation plan that addresses all of the above issues and provides assurance that a new organisation can avoid and mitigate against them occurring will need to be created. 9.5 Risks of proceeding The CMA rule against the decision to become a single organisation. Lessons learnt from the proposed merger between Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust and Poole Hospital NHS Foundation Trust 20 include a lack of clear understanding by the trusts of the process and requirements of the CMA approval process. This led to documents that did not clearly articulate the reasons behind the merger and did not show that the proposed form was the only one that could deliver the patient benefits that were being claimed. It also led to delays and miss-communications at board level of the two trusts and between them, Monitor and the CMA which led to the trusts being on the back foot from the beginning. As set out in chapter 8, this project has already been engaging with Monitor s Cooperation and Competition Department to understand the area s where the CMA may find that a combined trust would lead to a lessening of competition, and to begin to provide further detailed information on the contracting landscape and relationships for those services. Continuing with this ongoing dialogue and having regular updates to the project board (and subsequently to trust boards) where it is a standard agenda item will ensure the project remains on the front-foot and any concerns the CMA may have can be addressed and answered with appropriate evidence in a timely manner External stakeholders This risk arises if the local public, patients and political figures do not agree with the case for change and reasons for the transaction. The project needs to ensure the current situation of clinical unsustainability is made clear in the public communications campaign so stakeholders can fully understand the case for change, as well as how an organisational form change can deliver the improvements more sustainably for the longer term. 20 The Heath Foundation: Mergers in the NHS Lessons learnt from the decision to clock the proposed merger of hospitals in Bournemouth and Poole (December 2014) 93

101 9.5.3 Impact on operational, quality of financial performance Delay Delay on making the decision could lead to; distraction of staff from day to day operational tasks; a deterioration in performance standards; a deterioration in quality; lack of progress on service development; loss of key talent; increased cost; decreased reputation of both trusts. Tight robustly managed operational and quality performance agenda s in both trusts, plus a clear communication strategy is essential to ensure the consequences above are mitigated. The project team however need to work to ensure that significant delays to the programme of work do not occur, by having: a realistic implementation plan including times for external transaction and approvals continued close liaison with external regulators and approval bodies tightly managed plan by the project board clear, regular communications to all staff including down to individual meetings where individuals are directly affected. Leadership and management capacity Failure to invest the required leadership and management capacity to deliver the transaction, integration and day to day running of the organisation is a key risk in both organisations. Mitigation against this being a concern include a well resourced project and implementation team that can adequately support both the transaction and implementation in order that other managers can continue to focus on delivering the day to day operational running of the organisations Staff Resistance Loss/lack of support from clinical colleagues This will result in poor and/or slow clinical integration of teams and a reduction of the pace at which patients can begin to see the benefits. Involving clinical colleagues in describing the clinical vision of the combined trust and ensuring they are engaged with colleagues from their service in the opposite trust in designing how a merged service will look, the benefits it will bring and how it will be achieved is vital to ensure clinical teams are engaged from the outset. Supporting them to deliver that vision through good management and leadership is then essential to continue their support throughout the implementation. Culture differences and lack of support Differences could lead to slow and difficult integration of teams, and lower morale of some staff. An assessment of the culture of both organisations will be undertaken as part of FBC with a robust organisational development plan put in place. Continued open and honest communication with all staff and strong leadership from the senior team to focus upon shared values and beliefs will help to mitigate this. The communications and engagement plan will need to continue some years following transaction and should engage with every member of staff across the three sites, even where they are not directly involved in working at other sites. A new organisational identity borne out of staff and public engagement will assist in creating a shared unity for staff Financial assumptions are incorrect Incorrect assumptions used in the original base case and savings opportunities will result in an unachievable financial forecast and a loss of reputation of the combined trust. The implementation costs are also at risk of being inadequate. Further due diligence at FBC stage will be needed to provide the required internal and external assurances. 94

102 9.5.6 Financial position of the merged organisation if transition costs are not externally financed This would lead to a significant pressure on the merged organisation from day 1 and would result in a continued financially unsustainable organisation into the future. Sustained engagement with regulators to agree the financing of the transitional costs, as well as detailed analysis in FBC to ensure the expected costs are accurate is essential. This will be managed through the programme board and reviewed directly with regulators on a regular basis Intended benefits are not realised/delivered The process of identifying the benefits to be derived from a merger is set out in the approach to developing the Benefits realisation strategy (see section 8.8 on page 89.) This includes defining what is to be achieved by when, by whom, the measures to be used, and arrangements for tracking their delivery. 95

103 10. Appendices Appendix 1 Memorandum of Understanding Appendix 2 Clinical Reference Group ToR Appendix 3 Clinical service discussions Appendix 4 Capacity analysis Appendix 5 Strategic outline case assessment criteria Appendix 6 Strategic outline case long list reasons for exclusion from the short list Appendix 7 Strategic outline case short list of options Appendix 8 Detailed report in the option appraisal process Appendix 9 The process for identifying back office savings opportunities Appendix 10 Back office savings assumptions Appendix 11 Detailed description of option appraisal Appendix 12 Clinical services which will benefit from merger Appendix 13 Financial assumptions Appendix 14 - Indicative Timeline to Transaction Approval (by 1 April 2017) Appendix 15 Communications and Engagement Plan (DRAFT) Appendix 16 Risk register matrix Appendix 17 Full risk register 96

104 Appendix 1 Memorandum of Understanding COMMERCIAL IN CONFIDENCE DRAFT MEMORANDUM OF UNDERSTANDING FOR COLLABORATIVE WORKING AS PART OF CAMBRIDGE AND PETERBOROUGH SYSTEM TRANSFORMATION PROGRAMME BETWEEN THE PARTNERS LISTED BELOW: HINCHINGBROOKE HEALTH CARE NHS TRUST (HHCT) PETERBOROUGH AND STAMFORD HOSPITALS NHS FOUNDATION TRUST (PSHFT) 1. The project 1.1 The partners agree to work collaboratively together to reduce duplication and costs, and support the future delivery of sustainable services for the benefit of patients and taxpayers. The partners agree to the following objectives: Identification of back office and support function savings opportunities; Identification of the organisational form changes for the two organisations; and Agreement on a shared vision for future clinical service provision. 1.2 The key deliverables from this project will be: Joint CIP programme for 2016/17 and 2017/18; Outline Business Case for organisational form change (and a Full Business Case should the OBC recommend it) Input into the clinical service reconfiguration plan for the LHE being undertaken through the System Transformation Programme. 1.3 The project will continue as a minimum until final business case approval and implementation, or until outline business case is presented to the respective boards if there is no decision to proceed. The term of the project will be reviewed at the time of submission of the OBC. 2. Timescales 2.1 The project will commence in November Immediate shared CIP opportunities for 2015/16 will be identified by 14 January /17 shared CIP opportunities will be presented to the respective Boards in February 2016 in line with national timetables. 2017/18 shared CIP opportunities will be presented to the respective Boards in April 2016 at the same time as submission of the OBC. 2.3 The outline business case will be presented to each board in April Subject to approval of the outline business case, draft heads of terms and a full business case will be presented to each board by: Heads of Terms May 2016 Full business case July If the full business case is approved, more detailed heads of terms will be presented to each board by August The preferred option from the OBC will be implemented from October A detailed timeline leading to development of the OBC is provided in Appendix Background

105 3.1 As part of the Cambridge and Peterborough System Transformation Programme it was agreed that the partners listed above will collaboratively work together to reduce duplication and costs, which will also support the future delivery of sustainable services for the benefit of patients and taxpayers. This will include the jointly created CIP programme for 2016/17 and 2017/18, an Outline Business Case for organisational form change and input into the clinical service reconfiguration plan for the LHE. 3.2 The OBC work will encompass both: the financial case for reducing the duplicate corporate structures including Board functions and corporate support services; and the clinical vision for closer working to deliver clinically sustainable services and improved outcomes for patients. 4. Purpose and Commitment 4.1 This work will assess the opportunities to reduce duplication and plan for shared CIPs and changes in organisational form across the two organisations in the areas identified above. The partners commit to the identification and delivery of material CIPs in order to reduce the provider deficit as soon as possible. 4.2 By mid January 2016, the partners will have prepared a joint 2015/16 in-year plan for shared CIPs. By February 2016, the partners will have a jointly created 2016/17 CIP programme focussing on shared support functions. 4.3 The partners commit to monitor the delivery of the jointly created CIPs via the project board up until April Following this, a review will be undertaken to agree how best to monitor shared CIPs going forward. 4.4 By April 2016 an outline business case will be prepared for both boards which explores the future organisational form of the trusts based on a number of options defined below. This will include the jointly created shared CIP programme (to be fed in as a supporting work stream). 4.5 The partners agree to provide management resource and all relevant data connected with the services in scope and for this information to be shared between partners. 5. Project arrangements 5.1 Both CEOs will support this project, the PSHFT deputy CEO will act as Project Director and the HHCT CEO (lead CEO) will chair the project board. 5.2 The project will be supported by relevant expertise from within each trust, the System Transformation Programme and external support from and through Monitor and the TDA. 5.3 The project arrangements can be changed in the event that both parties agree with Monitor and the TDA the new arrangements. 6. General principles 6.1 This project will: above all, work to the timescales defined in section 2 above. remain compatible with other work streams in the system transformation programme, as far as they are known at the time. Remain compatible with national and local initiatives including: - New models of care urgent and emergency care vanguard - * Work in ENT, orthopaedics, ophthalmology and cardiovascular - * Extension of Uniting Care Partners to include PSHFT and HHCT in the future board. - LHE led work on Children s services - NHS England maternity review

106 - Urgent and emergency care vanguard - * Local clinical strategy for HHCT and PSHFT to deliver a long term sustainable vision 6.2 Both parties agree to ensure value for money during the preparation of the outline business case and will limit strategic decision making and avoid incurring short term costs which may need to be reversed depending on the outcome of the business case. 6.3 Both parties agree to explore all opportunities to fast track any potential back office savings in advance of the April 2016 outline business case decision. These will be set out in a Joint 2016/17 CIP. 6.4 Both partners agree to avoid entering into any additional long term strategic or financial commitments without the prior approval of both CEOs and regulators, including: appointment of substantive executive and senior management posts; approval of new major capital projects; and strategic partnerships. 7. Confidentiality 7.1 Until the existence of this Memorandum of Understanding is declared as part of public engagement, this agreement will be commercial in confidence and not subject to disclosure where a request is made under the Freedom of Information Act (2000).This is considered as being exempt from disclosure under section22 (information intended for future publication) of the Act. Whilst work is ongoing on the subject matter of this agreement this is considered exempt under section 43 (prejudice to commercial interests) of the Act. 7.2 If either party to this Memorandum of Understanding is approached or is considering disclosure of the existence or content of the agreement, then the other party will be informed, and formal legal advice sought as consideration of the public interest test under the Freedom of Information Act 2000 at the time of the request will apply. 7.3 Commercially Sensitive Information provided by each provider as part of this project is provided in confidence and is not to be disclosed beyond the project team or to whom it is essential. All individuals in receipt of commercially sensitive or confidential information will be required to sign a separate non-disclosure agreement. If either party suspects that this is breached they are to inform the other party as soon as is practically possible. 7.4 Any information already available in the public domain is not exempt from disclosure under the Freedom of Information Act Competition law 8.1 The partners agree that for the purposes of this Memorandum, Commercially sensitive information means any and all trade secrets, confidential financial information and confidential commercial information including without limitation, information relating to the terms of actual or proposed sub-contract arrangements (including bids received under competitive tendering), future pricing, business strategy and costs data, as may be utilised, produced or recorded by either partner, the publication of which a corporate entity in the same business would reasonably be able to expect to protect by virtue of business confidentiality provisions, providing that this shall not apply where the exchange of such information is permitted in accordance with this Memorandum. 8.2 The partners acknowledge that competition law will apply to their conduct before any possible transaction and that competition approval is likely to be necessary in relation to any transaction. 8.3 In particular, the partners acknowledge that competition law imposes obligations in

107 relation to dealings with each other during this stage and in relation to the preparation of the Outline Business Case and that the partners are required to take special care to ensure compliance with the obligations. In particular, the partners acknowledge that the sharing of Commercially Sensitive Information is an area that might cause competition law concerns unless these communications are properly managed. 8.4 The partners acknowledge that, at this early stage, in practice, the information that is likely to be shared will predominantly be already in the public domain. 8.5 To the extent such information is not already in the public domain, the partners have, in Appendix 2 set out the principles which will govern the conduct relating to information sharing in order to comply with competition law. 8.6 Any commercially sensitive information must be shared in accordance with the protocol set out in Appendix 2 and in line with Competition Guidance. Any information related to areas of work where the organisations may be considered to be in competition, should not be shared with staff involved in contractual arrangements. 9. Governance 9.1 The project board will form part of the governance arrangements for the system wide transformation programme show in diagram The project board will report to the Shadow Health Executive. 9.3 The lead CEO will report every two weeks, updating system leaders, Monitor and NHS England on project progress, including any risks or issues requiring clarification or support from partners. 9.4 Each CEO will report to their individual Boards and Governors as applicable 9.5 The project will be established and operated on PRINCE principles. 9.6 A project board will be established which will comprise both CEOs, with individual work stream leads from within each trust and representation from Monitor and TDA 9.7 The Project Board will include a nominated Non-Executive Director from each Trust. Diagram 1 Stephen Hay, Paul Baumann, Bob Alexander Routine oversight Monthly update to regional tripartite PSHFT/HHCT organisational form project Shadow Health Executive (every 2 weeks) Programme Director, supported by PMO 1. Demand management & prevention 2. Reconfiguration 3. Efficiency (inc support functions & Estates) 4. Financial alignment 5. Turnaround & CIPS

108 9.8 The outline business case will be structured so as to enable assessment and appraisal of the content to be carried out in accordance with the Five Case Model (HM Treasury 2007) for business case development, as described in the table 1 Table 1 Five case model OBC Strategic case to demonstrate that the proposals are supported by a robust case for change. Economic case to demonstrate the options appraisal of potential benefits compared to costs, and that value for money has been optimised for society as a whole Commercial case to demonstrate that the proposals are commercially viable Financial case to demonstrate that the proposals are financially affordable Management case to demonstrate that the proposals can be delivered successfully Proposed HHCT/PSHFT OBC The case for change*: - National context - LHE - CCG commissioning intentions - Drivers for change Options appraisal* - Previously considered options - Available options - Assessment of options Benefits* - Benefits for commissioners and the local economy - Clinical case Not included Financial case - Assessment of each trust s financial position - Assessment of the finances of the proposed new organisational form Vision and organisational design - Vision for the proposed organisational form - Areas the new organisation will serve - Organisational structure - Board structure(s) - Governance of the enlarged structure - Performance management Programme timeline, Governance and management - Programme timeline - Transactional workstream - Organisational workstream - Legal and regulatory approvals - Communications and engagement - Programme management and governance arrangements * Note - the Monitor strategic outline case will form the core of these sections 9.9 Business case development The trusts will explore the following options for organisational form in an outline business case: Option 1: Do nothing for now Option 2: Shared back office only leading and integrating back office and operational services to deliver reduced costs and sustainable services Option 3: Two boards, one executive team and one operational organisation plus option 2 (leading and integrating back office and operational services to deliver reduced costs and sustainable services) Option 4: One organisation

109 9.10 The outline business case will be presented to the two Trust boards in April If one of the options 2-4 is approved to proceed, the full business case will be presented to the August 2016 boards, following each Board undertaking its own due diligence, for implementation from October Criteria for ranking possible remaining options 10. Resources 10.1 As far as possible, both organisations will utilise in-house resources with external support as required. The costs will be shared 50: PSHFT resource will include: Deputy Chief Executive (Project Director) Assistant Director of Strategy Assistant Director System Transformation and Stamford Redevelopment Deputy Director of Finance - Planning Deputy Director System Transformation Other individuals to support the programme of work will be identified to lead workstreams as required 10.3 HHCT resource will include Individuals to support the programme of work will be identified to lead workstreams as required

110 10.4 The System Transformation Programme team will provide activity analytic support where available In agreement with Monitor, procure financial analytic and competition analysis support where required Separate to the above arrangement each Organisation will procure and incur the costs of its own due diligence which will cover at least, legal, commercial and financial matters. 11. Work streams 11.1 The project board will oversee six work streams to develop the outline business case. These are described in more detail in Appendix The outline business case will be developed from the Strategic Outline Case Responsibility for writing the business case rests with both organisations with the lead author being the Project Director The work streams to develop the OBC include: Strategic drivers for change Activity analysis Financial analysis Competition The clinical vision and organisational design Programme design CIP 11.5 Depending on the outcome of the outline business case a process of due diligence may be required. This will run consecutive to the development of the full business case. 12. Communication The Trusts will jointly develop and manage a single and consistent communications plan through the Project Board. 13. Agreement Signed by: HHCT Chief Executive: (L.McCarthy) PSHFT Chief Executive: (S.Graves) November 2015

111 MoU Appendix 1 Detailed timeline for development of the outline business case Milestones Dates A formal Memorandum of 11 December 2015 Understanding between PSHFT and HHCT agreed Programme Arrangements and 11 December 2015 Governance agreed PID agreed for presentation to 11 December 2015 Programme Board First Programme Board 24 December 2015 Work stream programmes of work 24 December 2015 commenced Agreed 2015/16 shared CIP 14 January 2016 Agreed 2016/17 shared CIP February 2016 Agreed 2017/18 shared CIP April 2016 Outline Business Case completed April 2016 PSHFT/HHCT formal approval to April 2016 proceed to Full Business Case FBC commences (should the May 2016 decision to proceed be taken) CMA Phase 1* (if required) June 2016 Full Business Case completed July 2016 PSHFT/HHCT formal approval of Full July 2016 Business Case Monitor assessment process September 2016 concludes* (if required) Formal Board/Governor approvals by September 2016 both PSHFT and HHCT to conclude transaction* (if required) Transaction go-live* 1 October 2016 *As the outcome of the OBC decision is uncertain, this timetable sets out an indicative process which is the most complex, i.e. it requires competition and regulatory approval. In the event that these are not required, the FBC and Transaction go-live date could be earlier.

112 MoU Appendix 2 Conduct and Information Sharing Protocol Commercially sensitive or other confidential information that relates to the work being undertaken in accordance with this Memorandum of Understanding will only be shared with identified members of the project teams. All project team members will be required to sign a non-disclosure agreement. Any other individuals requesting access to such data who are outside the project teams will need to be approved on an exception basis by the Project Director or the Chief Executive of the party to whom the information relates. Information shared between the project teams can be done: o electronically over NHS.net or otherwise encrypted and/or o to a dedicated box accessible to project team members only and/or o to a shared secure document location

113 MoU Appendix 3 Work streams to develop the outline business case Business case Strategic drivers for change Activity analysis Financial analysis Competition Vision and organisational design Programme design Analysis of each optiion Analysis of each option 'Customer' benefts v reduction in competition Clinical vision Management and governance arrangements Detail of preferred option Detail of prefered option Engagement with regulatory bodies Organisational structure Shared CIP analysis Strategic drivers work stream The project board will review the strategic drivers in the Monitor strategic outline case. Activity work stream Led by xxx. Supported by the strategic transformation programme. Analysis of the impact on activity will be for each option. Detailed analysis for the preferred option. Resource will include xxx from PSHFT, xxx from HHCT, support from the STP. Financial work stream Led by the PSHFT Deputy Chief Executive. Assess the financial savings of each option. Assess the long term financial viability of the preferred option. Both trusts will operate on an open book basis and share all relevant financial information with each other and with the additional external support. Resource will include xxx from PSHFT, xxx from HHCT, Monitor/Partners procured independent scrutiny of the finances. Competition work stream Led by xxxx. Support by the Monitor team. Monitor/Partners procured independent scrutiny of the competition issues. Based on the previous work in this area. Identify the benefits to customers (commissioners and the public) of each proposed option. Propose an approach to regulators to implement the preferred option. Resource will include xxx from PSHFT, xxx from HHCT, Monitor/Partners procured independent scrutiny of the finances. Vision and organisational design work stream Led by xxxx. Develop a high level clinical vision and site strategy. Supported by a clinical senate sub group.

114 Propose the governance arrangements for the preferred option. Facilitation will be through hospital and PSD teams. Shared CIP analysis Led by xxxx Identify and deliver 2015/16 shared CIPs from support functions. Jointly Identify and create a shared CIP programme for 2016/17 and 2017/18.

115 Appendix 2 Clinical Reference Group terms of reference Role and purpose The Purpose of this group is to lead on the clinical design and evaluation of sustainable clinical service models, and provide support an advice to the Collaboration project team giving Clinical Oversight to the content and implications of options set out in the OB The Aim of the group is to: Agreeing the counterfactual (Opt 1) Assess the range of options / opportunities to provide services under more sustainable* models (Opt 2-4) This will be achieved through: Agree existing risk areas and assess impact under each option Ensure Clinical Oversight to the content and implications of options set out in the OBC (as this is developed) Identifying opportunities to fast-track areas of work to deliver improved performance / capacity / efficiency Ensure clinical involvement in the design / evaluation of potential Operational structures and Clinical Governance arrangements Critical success factors OBC document draft to Boards in March correctly reflects underpinning clinical perspectives Patient experience and outcomes are maintained or improved The overall combined unit costs of delivery are reduced Existing risks for clinical services are relieved / mitigated Workforce is sustainable (recruitment, retention & training arrangements) Meeting arrangements Meetings will be held fortnightly at HHCT or PSHFT Papers will be circulated at least two working days in advance Non-members may be invited with the prior agreement of the Chair / Exec Lead Project team will provide notes / meeting records. Accountability The Group reports to the HHCT-PSHFT Collaboration Project Board The Group is accountable via individual members and the respective Boards within their individual organisations Membership Chair & Workstream Executive Lead:

116 Cara Charles-Barks COO HHCT Hinchingbrooke Health Care NHS Trust Filippo DiFranco Anitha Mathews Hagen Schumacher Suzanne Hamilton Chris Walsh (NED) Peterborough & Stamford Hospitals NHS Foundation Trust Alfred Choy Jon Naylor Fiona Miller Sateesh Nagumantry Madhu Davies (NED) Sarah Dunnett (NED) Collaboration Project Team Cara Charles-Barks COO HHCT Mark Avery Deputy Director Obi Onyiah Workstream Project Manager

117 Appendix 3 Clinical service discussions A detailed service by service sustainability analysis by the medical and nursing directors for HHCT and PSHFT is shown below. Unsustainable Quality/ efficiency opportunity Affecting Description HHCT/ PSHFT Immediate Medium term Accident & Emergency ü ü Acute Medicine ü ü ü Ambulatory Care Breast Service Medium term PSHFT HHCT ü ü ü ü ü ü Cardiology ü ü Current inability to recruit and retain medical and nursing staff due to size and case mix & career opportunities PSHFT has just appointed 4 A&E consultants. Urgent care redesign across the region to provide long term robustness forms one of the key streams of work of the STP. Roles and service delivery models are moving and changing, requiring nursing & AHP staff to develop to match changing models. Challenge for a smaller workforce. Nursing risks (recruitment and retention) 2 consultant vacancies (currently covered by locums) PSHFT has appointed 2 new consultants but still has 3 additional vacancies Opportunities (linked to economies of scale) Outpatient Parenteral Antimicrobial therapy (OPAT) 1 vacancy (covered by locum) 2 breast radiologists due to start May/June (joint posts with CUH) Opportunities for efficiency/collaboration but no sustainability risks. PSHFT has appointed one new consultant breast surgeon HHCT one substantive consultant, with budget for 2.4 WTE to meet training needs. Opportunities for sub-specialism with greater catchment, e.g. repatriation of specialist procedures (PCI) when Papworth moves to Cambridge

118 Unsustainable Quality/ efficiency opportunity Affecting Description HHCT/ PSHFT Immediate Medium term Medium term Respiratory See Thoracic med Clinical haematology ü ü Diabetes Diagnostic imaging / Interventional radiology Endoscopy ENT ü PSHFT HHCT ü ü ü ü ü ü ü ü ü Gastroenterology ü ü General Surgery ü ü Geriatric Medicine ü ü ü Gynaecology ü ü Haematology Unsustainable. No substantive HHCT consultants. Locum cover only. Unable to recruit. 5 consultants in post and a further one commencing in October Opportunities for efficiency/collaboration but no sustainability risks. Multidisciplinary / SpNs / Podiatry HHCT & PSHFT outsourcing reporting/ use of locums as both unable to fill all consultant posts. Joined up IT essential. Full JAG accreditation. High Quality, 7-day bleed rota. Nurse endoscopist national society chair high profile. Sustainable & resilient Full JAG accreditation with spare room capacity. 1 in 4 on-call cover at both trusts unsustainable No seven day bleed service at PSHFT PHSFT likely to benefit from linking with HHCT Endoscopy See endoscopy above Lack of variety leading to impact on recruitment and retention See - Acute medicine - Orthogeriatrics (single consultant) - Stroke Dementia services development (key to the Health Campus Strategy) good quality service. Opportunities come with scale. No IP gynae service (elective or nonelective.) Most work is daycase in the treatment centre. See Clinical Haematology Maternity ü ü ü Options for providing future capacity under different service models.

119 Unsustainable Quality/ efficiency opportunity Affecting Description HHCT/ PSHFT Immediate Medium term Neonatology ü ü Nephrology ü ü Neurology ü ü Oncology Ophthalmology Oral and max facs Medium term PSHFT HHCT Linked to STP work. HHCT No recruitment issues. Quality & Patient experience scores high. Level One unit provided by CCS. Opportunity being explored via STP work. HHCT advice and support provided by Addenbrookes on an honorary contract HHCT single handed consultant ü ü ü See - McMillan Centre - Radiotherapy ü ü ü ü ü NA Ortho-Geriatrics ü ü ü Trauma and orthopaedics ü ü ü Paediatrics ü NA Pain Palliative care ü Opportunity to undertake more activity at PSHFT dedicated theatre/proc room not used. HHCT single consultant PSHFT has sessions from a care of the elderly consultant. Opportunity to merge cover to provide more reliable service all year round including cover in periods of one being absent. Location for elective surgery and possible development of spinal service within larger service. R&R for trauma nurses not HHCT Options being developed under STP work. HHCT not commissioned for a pain service. When spinal back pain service ceased the impact on PSHFT chronic pain referrals increased creating a capacity and demand challenge. HHCT. Fragile. One WTE consultant cover HHCT 16 nurses. Rotate through community. PSHFT has two consultants working with the local hospice and the joint

120 Unsustainable Quality/ efficiency opportunity Affecting Description HHCT/ PSHFT Pathology Immediate Medium term Plastics and dermatology ü ü Radiotherapy Unsustainable across the C&P LHE Medium term PSHFT HHCT ü ü NA Respiratory ü ü Rheumatology ü ü ü Spinal surgery ü NA ü Stroke ü ü Therapy services Urology ü ü ü ü ü ü hospital and community MacMillan service. Opportunities for all staff to increase learning and development., TPP Sustainable but opportunities for >efficiency through >scale CUH unable to cope with demand. 3 rd PSHFT operational Autumn 16 Opportunity for HHCT catchment patients to access additional LINAC PSHFT closer to home. Supported by Cancer Network Papworth move to Addenbrookes may impact on HHCT residents and PSHFT flows. Combined service may allow for development of a more local service Stable service with good reputation at HHCT and PSHFT HHCT unsustainable in its current form. Single handed Consultant leaving imminently. see correlated impact under pain services No service at PSHFT HHCT unsustainable under current arrangements (issues = mix of financial/contractual & clinical no stroke physicians) HHCT opportunities for efficiency through scale. Poor weekend cover New service at HHCT 2-3 years ago. Now established locally, 4 consultants, service doing well. Opportunities for efficiency through scale

121 Haematology Hinchingbrooke has no substantive consultants in post, and has been unable to recruit locums. Previously, PSHFT provided consultants to HHCT, but following the departure of two consultants were unable to continue this support. HHCT staff are supportive of a single team across both trusts if this results in providing a better, more sustainable service to patients. The shared view is that only providing consultant cover at HHCT will not work because without on-site junior cover, the posts will not be attractive or sustainable as demonstrated by the lack of locum applicants. Most important is a viable, sustainable service at HHCT HHCT haematology specialist nurse Successful consultant recruitment is the key to delivering a sustainable service. This requires a 500,000 catchment population, about the same as the PSHFT core and wider catchment, as well as an opportunity for sub-specialism. A single team would meet these requirements making recruitment more likely. ENT Out of hours and on call cover can be difficult at both trusts with frequent on call shifts. Middle grade sharing could work, but only if there is only one site open at weekends for acute admissions. To date the two trusts have worked collaboratively to manage demand at Peterborough which has included transferring all care for some patients to HHCT. Long term arrangements are essential for these patients to ensure there is effective planning, resourcing and recruitment. Stroke In London where 31 hospitals used to provide stroke care, services are now concentrated in eight hospitals - and outcomes have improved from one of the worst to one of the best in Europe. There are no specialist stroke consultants or Specialist Registrars at HHCT. The service is provided by a locum consultant (1.4 wte) and two SpR s, who are all general medicine physicians or geriatricians without specialist skills in the care of patients with a stroke. Consequently, the Joined up IT is absolutely essential! backlog on the Stroke National Audit Programme (SNAP) is around 12 months and the CQC have recommended that there Consultant physician HHCT is a service review. This contributes to a payment and contracting risk with rehabilitation patients who receive treatment in the Trust from days 13 to 44 of the stroke pathway not being paid for under tariff. There is support for the creation of a single stroke team to create a sustainable, safe service. Diagnostic imaging Both Trusts have vacant consultant posts, with three at Peterborough and four at HHCT. Hinchingbrooke completely outsources the out of hours reporting, whereas PSHFT uses this as a back up to local reporting. Peterborough has full Imaging Services Accreditation Scheme (ISAS) accreditation but HHCT does not. Equipment is managed in house at HHCT which includes an MRI machine which is 14 years old and beyond the end of its agreed life cycle. Peterborough has a fully managed equipment service as part of the PFI contract. The groups said that collaboration will help to address some of the staffing and equipment issues, but are contingent on joined up IT and PACs which is only possible where a combined set of patient data exists across the two Trusts. Collaboration could help in delivering workable rotas and out of hours cover, but will need to For Hinchingbrooke and Peterborough, and regionally, it is really important to talk and keep talking. PSHFT radiologist

122 address the lack of investment in the infrastructure.

123 Appendix 4 Capacity analysis CPCCG assessment of required additional non-elective beds additional requirement of 111 HHCT and 148 PSHFT

124 Theatre capacity Laminar Flow Non Laminar Flow HHCT 4 5 Of which two are protected for Ophthalmology PSHFT 6 12 One of which is mothballed Day case Other Total No separation from main theatres at Peterborough City Hospital day case theatre in H&N unit +1 interventional radiology theatre +1 procedure room in outpatients (T&O) +2 DC theatres at Stamford used as procedure rooms 18 (+5)

125 Appendix 5 Strategic Outline case assessment criteria

126

127 Appendix 6 Strategic outline case long list reasons for exclusion from the short list Option Exclusion rationale Process by which option excluded Collaborations with organisations outside the LHE Buddying and informal partnering Contractual partnerships/jvs Implausible /not feasible options to explore, as providers on the outskirts of the Cambridge and Peterborough system are part of other collaboration talks: o United Lincolnshire Hospitals part of Sustainable Lincolnshire (all Lincolnshire providers) o Queen Elizabeth Hospitals Kings Lynn o Bedford hospital (part of Bedfordshire and Milton Keynes sustainability plan) o Kettering General Hospital part of Healthier Northamptonshire (including Northampton General Hospital) Not aligned to system agreed objectives and wider STP programme of work Ruled out on grounds that there are not enough benefits The proposed solution will clearly add limited to no benefit in meeting the objectives Buddying is implausible as an intervention on its own, as it is unlikely to effectively impact on the scale of challenges Ruled out all new/additional JVs/contractual partnership on the basis that they are likely to add additional recurring costs and complexity to an already complex baseline of arrangements SOC recommended further detailed analysis is undertaken on the As is baseline of Contractual Partnerships/JVs across the C&P area prior to considering any additional JV arrangements, as there are a number of historical arrangements in the C&P LHE and that this work should be linked to the STP cross organisation CIP work The Dalton review highlights that financial efficiency savings are at the lower end of the spectrum of savings possible from different organisational forms (after buddying), this is supported by the PWC Project Brown work, which also suggested dis-benefits due to additional costs Early September2015 stakeholder interviews Excluded in evidence review stage of Strategic outline case preparation, 18 th of September 2015 Excluded in evidence review stage of Strategic outline case preparation, 18 th of September 2015 Collaborations with other Trusts Papworth related transactions (non Ruled out Papworth and either of HHCT/PSHFT, given Papworth s clinical service pathways; stakeholder responses and strategic misalignment with the STP: CUHFT) Papworth s strategy includes collaborative working with CUHFT, through moving to Addenbrookes site and CUHP; In May HM Treasury approved Papworth s Business Case to relocate to the Cambridge Biomedical Campus (New Hospital project); March 2015 Papworth Hospital reached financial close on the New Papworth Hospital PFI project, land acquired in Dec 2014, 20 million PDC received in 2014/15 and the Trust plans to move Q The 2012 CPT tested PSHFT hosting Papworth, noting neither Board considered it a possible option at the time. The proposed solution is unlikely to address underlying issues in the system. Excluded in evidence review stage of Strategic outline case preparation, 18 th of September 2015

128 Option Exclusion rationale Process by which option excluded CCS related transactions Out of area chains (Mental Health or Community) UCP plus any acute organisation Ruled out as majority of services are not delivered in Cambridgeshire and Peterborough LHE and so a CCS merger is unlikely to address underlying issues in the System. The SOC noted that estates rationalisation could make an impact, and it was recommended that estate rationalisation was explored as part of the shared system wide CIP work. Ruled out on strategic misalignment, as the proposed solution is unlikely to address underlying issues in the system Removed as stakeholders did not want to explore this option further as a short, medium or long term solution, as not aligned with out of hospital plans Excluded in evidence review stage of Strategic outline case preparation, 18 th of September 2015 Excluded in evidence review stage of Strategic outline case preparation, 18 th of September 2015 Initial shortlist evaluation 18 th of September CUHFT related transactions CUHFT and PSHFT ruled out on strategic misalignment and insufficient savings, given the distance from CUHFT and PSHFT, limiting scope for redirecting patient flows CUHFT and HHCT ruled out in the initial shortlist criteria evaluation, zero stakeholders in the LHE voted to consider this option further Shortlist criteria evaluation and stakeholder voting exercises - 18 th of September

129 Appendix 7 Strategic outline case short list of options

130 Appendix 8 Detailed report in the option appraisal process Option appraisal notes from the session 3 March Introduction This report briefly describes the option appraisal process on the HHCT/PSHFT collaboration conducted on 3 March 2016 at Hinchingbrooke hospital. The main focus is on the areas where scores differed significantly. Where this occurred, this report captures the main points of the discussion which explains why there was variation Process The session followed the process in the option appraisal process v1.5. The facilitator asked each person to individually score each of the section, one at a time, with scores shared with the whole group at the end of each section. The workbook checked that individual scores added up to 100 and there were no more than two tied scores per description Variation Significant variation between scorers was discussed. The criteria numbers and the associated description in the table relate to those used on the scoring sheet. Criteria Description Outlier Option Variation in score 1 Compatible with the clinical work streams currently underway 1 Compatible with the clinical work streams currently underway 9 Maintain safe staffing levels C Hubbard and K Rege Discussion 1 35 C Hubbard Scored option 1 at 35 as there is an opportunity for us to work together collaboratively without other back office changes. Back office change would facilitate it, but it is not a requirement that we do it. K Rege scored option 1 at 0 because of alignment with the STP. Addenbrookes joining in future provides an alternative route to achieving improvement in clinical services. K Rege 4 70 K Rege scored option 4 as 70 as this is the only option that truly allows free movement of staff across the two trusts. Single governance, policies, employer, stakeholders, single environment better able to facilitate the required changes and move towards the FYFV aims. K Rege 3 95 Option 3 would not deliver from a medical perspective because it is still fundamentally a service level agreement type collaboration which could unravel. Haematology and some of the other services meeting this week have spoken about the need to move staff across a single organisation with joint standards and policies. There are no SLA s under option 4, and a single organisation won t unravel under strain. C Hubbard agreed that some SLA s have

131 Criteria Description Outlier Option Variation in score 12 Minimise the extent to which patient choice is reduced 13 Acceptable to the public and key stakeholders including staff Discussion had to end in the past. C CBarks operating under a single governance structure with separate organisations would pose challenges, for example recruitment if the post was employed by one organisation but required to work across two organisations under option 3. All 2 25 C Hubbard - Back office is invisible to patients, it won t impact materially on patient choice. S Graves we need to agree what patient access means, are we to score this as being from the current place, or whether the collaboration will maintain service across either site. K Rege Gerry Hackett at CUHT has commented that we need one set of documentation across the whole health economy to facilitate the changes in clinical collaboration to maintain and improve patient access. This criteria is scored on the basis of the CMA view of competition, but we need to describe this holistically All There was a discussion over whether this criterion could be scored. L McCarthy said that generally stakeholders would view do nothing as good, but not if they were informed of the consequences of doing nothing. C CBarks said it was most important that we maintain viable services. The status quo is not sustainable, but that is not understood by the stakeholders at this time. S Holden summarised that they need to understand the views of individual stakeholders and K Rennoldson asked if we have communicated the reasons for the change to stakeholders, and whether they understood that services could be lost in a do nothing option. D Fowler said that do nothing equates to reconfiguration of back office services, and then there are opportunities to change clinical services. S Holden summarised that there is a financial imperative behind the business case but there are also opportunities for clinical collaboration. C Walker there has been an early focus on finance, but now this is extending to clinical opportunities. S Graves stakeholder views is an area we may not be able to overtly answer. L McCarthy said that public opinion has been heavily weighted against change, but we need to inform the public to help them understand the need for change. C Walker this will be developed in a FBC. S Graves the public are not of one single view. The Peterborough public are not in the same position as the Huntingdon public. We need to consider how we communicate the reasons for change with the public. S Graves Overview and Scrutiny Committees are key stakeholders. Lance has been to his local committee who were calling for a public consultation as they assume Hinchingbrooke will close. This is absolutely not the case; one or two services may change as a result of

132 Criteria Description Outlier Option Variation in score 14 The cost of investment must not be excessive relative to the financial benefits C CBarks C Hubbard Discussion Closing discussion Once the group had reviewed the combined total scores for each option, discussion followed: currently unsustainable services and external reviews. S Holden - this collaboration is an enabler to maintain services, both trusts are at financial risk and have some clinically unsustainable services. L McCarthy the local MP for Huntingdon is a key stakeholder we need to work with to help him understand what do nothing means and what is being proposed. Based on the points above, it was agreed that it was impossible to give a single answer to this question as there was no agreed position on who the stakeholders are, or which patients need to be engaged with. If we progress to FBC, there was a commitment to engage with key stakeholders. At the OBC stage, it is not appropriate to share anything, until there is a clear view of the future direction and the pace of the proposed change. S Graves We need to consider how we phrase the engagement in the OBC implementation plan section. We recognise that we don t have a legal duty to consult, but we need to work to inform stakeholders. There are at least four stakeholders, staff, patients, public and commissioners. There are at least two views of the options, views before an explanation and views after they understand what a do nothing option means. S Holden summarised that there is a clear commitment to explain and involve stakeholders at the right time. C Walker we want to do it properly, all the individual leaders care about getting it right. 1 C CBarks scored option 3 high because it is cheaper than option 4. C Hubbard scored option 4 as much higher than option 3 because the benefits from option 4 were so much greater than option 3, in comparison to the increase in cost. L McCarthy - It appears that this option 1 is an investment of 0, but agency etc. will be a further additional investment. Both trusts are already investing beyond the available funds as they are both in a deficit position. Continuing as they are, both trusts are in deficit, and the actual baseline position is more difficult to assess as the current situation could deteriorate, costs are hidden, may need to work up what these hidden costs are. The group agreed that there has been an open and robust discussion around the different scores. This was demonstrated by the differing scores, which led to good discussion about how each option met the criteria. S Holden summarised that this project is required to move at pace, but there also needs to be engagement with the public and stakeholders. Is the current timetable prescribed in the MoU right?

133 S Graves We are going to do engagement if we go to FBC. Pace needs to allow enough time to do this, but be fast enough to keep people on board. In the OBC, we need a range of views on different levels of engagement with a description of the risks of both and different timescales for each. S Holden summarised that the group agreed that trusts will need to work together during the engagement period. S Graves consider what sort of coming together this will be, we need transformation work alongside the transaction work. C Hubbard this will be a journey that we are on, and it is important to implement changes which will benefit patients early on. We also need clinical engagement to help the bottom line. S Holden summarised that there is a shared intent, and the panel need a structure to take this forward, we also need early clinical wins. S Graves we need to write down what the combined intent means, this will give greater confidence that it will deliver. L McCarthy we have a joint view of where we are heading, and a good basis to move forward. We still need clarity on how we communicate with stakeholders what the do nothing option means. There is some variability in the scores which is encouraging as it demonstrated that there has not been a group think. Option 4 a clear preferred option as long as it is delivered in a reasonable timescale to allow engagement with the relevant stakeholders, transformation of some clinical changes and transaction of back office. This will be worked up through the PMB, and discussion between the executives. Some work up is also required on the financials. An assurance report on the session will be provided shortly. Comms will be limited to Executive team and Chairs. Chairs will decide if they share with NED s.

134 Appendix 9 - The process for identifying back office savings opportunities The outline organisational structures and associated opportunities for workforce and software system rationalisation have been developed through detailed work with complimentary Executives of both current organisations. The process involved a number of steps: 1. Gaining an understanding of current divisional, corporate and back-office structures through organograms, including the costs deployed to resource them if staff were all paid at mid-point on the AfC 15/16 pay scale. 2. Comparing the organogram costs to 15/16 actual costs as supplied by Monitor in December 2015 (using full year projections provided by the Trusts), in order to understand whether any differences were due to: a) unfilled vacancies, b) adhoc agency cost c) agency cost to cover substantive vacancies d) in year CIP delivery. 3. Designing new structures that the Executives agreed would be sufficient to manage an enlarged organisation efficiently and effectively, considering known future pressures and risks (eg 7 day working). 4. Agreeing which elements of this could be delivered through closer joint working that options 2 and 3 would deliver. Understanding and documenting the assumptions and reasoning around this. 5. Comparing the costing of these new structures (at mid-point on AfC 15/16 pay scale) to 15/16 actual costs (as in point 2 above) and reflecting the pay saving opportunities and wte reductions that fell out of this. 6. Validating savings and structures against other Trusts via Lord Carter s report and other benchmarking data where available. 7. Robust check and challenge meetings of all executive proposed plans as above, by the Chief Executives of both organisations. The design principles that guided the development of structures for the enlarged organisation are outlined below; All three sites at Hinchingbrooke, Peterborough and Stamford will be maintained with clinical service provision remaining the same as it is now. There will be a single, Trust wide, executive team and one operational organisation using the same policies, systems and processes across the three sites. The Board and all departments will be of the minimum size necessary to effectively and safely manage the Trust, maintaining rapid and flexible decision making and delivering all required performance targets and safety standards. Effective clinical leadership will be at the core of the design, to deliver upper quartile performance outcomes, and excellence in patient care There will be clear and harmonised roles, responsibilities and accountabilities across the enlarged Trust, with elimination over time of all duplication.

135 New layers of management will not be created, and posts will be able to effectively meet the demands and responsibilities placed upon them.

136 Appendix 10 Back office savings assumptions CEO Dept The Board costs are made up in the majority of Executive and Non-executive Directors, supporting administrative costs and substantive strategic posts where present. Whilst the organisations remain legally separate there will need to be a set of non-executive directors at both organisations, however the costs of an executive director team can be shared in option 3. Supporting administration costs such as PA s and substantive strategic posts follow the executive team reductions although as HHCT are currently light of posts in this department, it is presumed that all of PSHFT costs remain in options 3 and 4 as opposed to doing a simple reduction of the combined total by half. This minimises the savings but is considered more realistic. There is no presumption that the individual staff members at PSHFT would remain in these posts but they would be subject to the usual competitive appointment process. Due to turnover of the small number of posts at this level, we have used benchmarked costs (of similar sized acute trusts) to calculate that option 3 would deliver 1.7M of savings by merging one set of executive directors, whilst a fully merged organisation would deliver an additional 0.2M ( 1.9M total). Finance Both Finance departments have met, discussed and agreed a structure that would be sufficient to manage an organisation with a 400M turnover, split across three sites and running a deficit. When compared to the current organograms (costed at mid-point) this represents a saving of nearly 1M recurrently although may take a couple of years to realise as two sets of accounting systems will need to merge. In a scenario where there are two legal entities (options 2 and 3) and operating boards it is felt that due to internal and external reporting functions minimal savings could be achieved. There are however some opportunities around running a joined up procurement team via an SLA process which would reduce pay costs in both options 2 and options 3. This delivers a 300k saving on pay for these options. HR Both HR directors have met multiple times to discuss and agree the opportunities there could be for working together more collaboratively. It has been agreed that certain departments within HR such as some of Learning and Development, Occupational Health and Recruitment, could work well under an SLA type arrangement offered in option 2 and 3. The advantages to this are that an improved service could be offered to the staff of both organisations and that in turn could lead to greater morale and staff satisfaction. It is unlikely however that collaborative working in these areas would lead to any significant pay cost reductions within those departments themselves, indeed the management of SLA s may mean a small increase in pay costs should option 2 be the preferred choice. It is agreed that option 3 offers no further advantage to option 2 aside from the director level saving. Indeed to be reporting and managing two separate boards it is proposed that a site HR Assistant Director would be needed at each organisation in order to operationally run the day to day functions and strategies. This would be at an increased cost of 110k above option 2, although upon challenge by the CEO s the banding of this post would decrease. In a fully merged organisation (option 4), as well as the improved service to staff deliverable in the options above, there are many more synergies that could be achieved when there s one organisation requiring one set of workforce information data and where one set of operational divisions require business partner support. This option would deliver 850k recurrent pay saving by year 2. Other benefits available in a merged legal organisation should include an improved ability to fill bank shifts on the wards and lower turnover with staff getting career progression and experience across three sites. This could eventually lead to a reduction in the need to use agency staff in front-line areas particularly, and therefore an improvement in patient safety and

137 satisfaction; although at this stage of the OBC we are unable to take any saving assumptions on agency staff in front line areas. Estates/Facilities The two organisations currently run these departments very differently with little to compare. In part this is due to PFI arrangements and a significant proportion of the workforce at PSHFT being part of that contract. This results in restricted pay saving opportunities with any of the options when looking at budget, however due to the difficulties in recruiting suitably qualified staff in some areas of this back office function, the organisations have spent 270k on agency costs in 15/16 with more spend being attributed to capital spend. Both Directors have agreed that collaborative working is likely to eliminate the need for this agency cost and this represents a real pay saving opportunity for all options. Non-pay spend is another area where collaborative working could lead to savings on external contracts such as soft fm and logistics, these savings have suggested a further 560k saving should be possible when working collaboratively. Non-financial opportunities also exist with regard to improved team resilience and personal development opportunities. Through SLA s it would be possible to deliver the identified savings in option 2 onwards albeit with some investment in the management of the SLA s. Option 3 is considered to require some additional staff to manage the reporting functionality from two separate boards and in order to support the Director to manage three sites effectively. The proposed amount has been reduced in the CEO challenge meetings. As a fully merged organisation in option 4, the need for the additional staff in option 3 is eliminated whilst also delivering the staff and non-pay efficiencies highlighted above. There is a further advantage in this option of greater space and capital rationalisation of back office departments across the three sites, maximising the use of clinical space in the future where capacity and need is greatest. For the OBC this cannot be financially quantified but it remains an agreed operational advantage of the short and long term effects of a fully merged organisation. IT/IS Whilst the two organisations remain separate legal entities there will be a requirement for there to be two sets of patients running on any information system. There will also be the same requirement for external reporting to regulators, commissioners etc. Aside from some very top level management therefore there is limited pay savings that can be achieved until a merged organisation exists. Even at that point many of the pay bands below band 7 would still be required to manage the hardware, training and technical support side of this department. Maximum pay saving opportunities for option 4 are suggested to be 300k plus 500k agency spend, but with minimal achieved prior to that point. Realistic non-pay savings can be achieved once a combined set of patients is delivered, as this allows negotiation with software system suppliers to merely extend licences. Basing a 30% cost reduction in this area (although the systems may sit in other operational areas) leads to a non-pay saving of 1.7M Corporate Nursing It has been agreed by the two Directors that via SLA s in option 2 and option 3, certain functions such as Chaplin service, Professional standards role, lead nurse for Children and Volunteer service could be run collaboratively. This could deliver advantages to both organisations in terms of staff and patients receiving an improved service through greater team resilience and cross pollination of ideas and skills. It is unlikely however that with the same staff and clinical service provision running across sites that there will be any pay savings associated with these benefits.

138 With one single Board in option 4, duplication of roles can be almost eliminated with all staff working across all three sites. The savings associated with this are not significant however as with the same volume of nursing staff, wards and no change to service provision, there needs to remain a continued strong focus on leading the nursing staff to deliver high standards of quality of care and meet all CQC and patient outcome standards. Operations Chief Operating Officers have met, discussed and agreed a structure that would be sufficient to manage an organisation with a 400M turnover, split across three sites but delivering the same commissioned services as currently and with no changes to patient access and site location. The proposed budgeted structure delivers a 500k saving against current operational structures of band 7 and above managerial roles including divisional heads of nursing but excluding matrons. This could be delivered in both options 3 and 4 but would be unachievable whilst there are two executive teams in option 2. This structure also supports the delivery of transformation and CIP delivery across both acute sites. Clinical Support For departments such as pharmacy, diagnostic imaging, therapies, and sterile services it would be possible to share Heads of Service posts between both Trusts via an SLA arrangement. This delivers approx. 300k of savings for each of the options. Some posts like Pharmacy and maternity may need both until option 4 as they are legally organisational based.

139 Appendix 11 Detailed description of option appraisal Option 1 Do nothing Option 2 Shared services Option 3 Two boards, one executive team Option 4 One organisation 1. Must be deliverable and acceptable to patients and other stakeholders including staff Scores Maintain safe staffing levels Maintain commissioner requested services Minimise the extent to which patient choice is reduced Ability to align culture and other values in a short period of time Medical Directors have identified services that are currently unsustainable. Some services will not be sustainable and as a result maintenance will be threatened. Some services will not be sustainable and as a result choice will inevitably be reduced and patients would need to travel further. No plan to align cultures Merged clinical services would provide greater opportunities for staff to develop, gain new skills and rotate across services. This in turn will lead to an increase in staff satisfaction which in turn should lead to improved retention rates in those services and help support safe staffing levels. Will support some services, but reliant on SLA s being maintained Improved patient experience for patients and public visiting our hospitals and safe staffing levels will directly improve patient safety and length of stay. Alignment not required under this option and therefore might be more acceptable to some staff, however if there were increased use of SLAs to provide individual services, then the provider organisation would need to be sensitive to, and align outputs to the needs of the other. Rotas and ability to recruit - Opportunities to share rotas and out of hours cover across both sites e.g. Haematology at HHCT, Gastro 7-day bleed service at PSHFT - Larger critical mass will allow greater opportunities for training, a varied workload, and sub-specialisation will help recruitment and retention. Specialist services such as Haematology and Pain Services at HHCT site could be provided through the PSHFT team if the two trusts agreed this under an SLA Opportunity to collaborate to improve efficiency, cross-cover and patient access in: - Radiology - Cardiology - ENT - Respiratory Medicine - Stroke - Haematology - Pain - Ophthalmology - Diabetes All reliant on SLA s between the two organisations Some opportunities to align as a result of a single executive team, but with two separate organisations with two boards, staff could still feel they belong to one organisation or another and not fully integrate cultures or could take longer. 2. Aligns to STP plans that aim to secure sustainable and safe services for patients Scores Enabler to address the capacity mismatch across the patch Not addressed as the two trusts are not working together to make better use of the available estate Medical Directors suggest the following services could be delivered more collaboratively via SLA s, to address capacity mismatch: - ENT - Haematology - Ophthalmology With both organisations working with a consistent set of policies, procedures, equipment standardisation, staff would be better able to move and work between organisations with continuity of working practices. Balancing of resources could be more flexible than option 2 because staff would be working under one management structure. But, flexing capacity between organisations may be very costly and time consuming to appropriately track and manage via multiple SLAs. Clinical Reference Group and Medical Directors have identified that this option builds on option 3 as new staff would more easily be recruited if they knew that the collaboration was longterm and couldn t be subject to reversal. Specialist services such as Haematology and Pain Services at HHCT site would be provided through the current PSHFT team. As in option 3 but not reliant on an SLA s therefore the collaboration will be robust and long-term to give patients more assurance that their choices won t be reduced with notice in the future. It would be in the new orgnisations interest to maintain and improve access on all sites. This option is initially more disruptive but over time will lead to the greatest alignment of cultures in clinical pathways regardless of which site they are delivered on.. A survey of executives who have managed through mergers, [said that culture clash] was the No. 1 reason for a deal s failure to achieve the promised value. Increases the level of collaboration beyond the other options as clinical teams work for one organisation.. Operating under a single organisation, a single executive team and support services and a single board, many complexities will be removed and use of capacity, particularly for elective activity could be much more flexible.

140 Compatibility with the clinical work streams currently underway Ability to build on local clinical collaborations and work already done [with UCP] in the community Aligns with the principles of the Five Year Forward View Option 1 Do nothing Does not preclude the organisations from further clinical collaboration, however without closer collaboration the STP work will not develop at the required pace. Frail medical specialist centre / Health Campus at HHCT aligns to the plans for a community hub location developed by UCP No Option 2 Shared services Partial compatibility with: - elective pathway work streams - Estates pathway - Urgent and emergency care Build on areas we have collaborated under the Elective Care Programme work stream. Medical Directors suggest the following services could be delivered more collaboratively, some of which could be part of an SLA: - Radiology - Cardiology - ENT - Hand Surgery - Respiratory - Stroke - Nephrology - Haematology - Oncology - Anaesthetics - Ophthalmology - Diabetes Yes under the contractual heading Option 3 Two boards, one executive team Option 3 increases the chances of effective collaboration beyond those set out in option 2 as executive teams would be in a position to directly steer and control the collaboration of clinical teams for both organisations they would be managing.. The experience of orthopaedics and ENT showed that even with the support of both executive teams, lack of harmonised policies, procedures and procurement add delay to the collaboration. In time, a single executive team and support services should lead to greater harmonisation subject to the two boards agreeing. As option 2 plus the older people hub could be better supported by larger clinical teams offering recruitment and retention opportunities for: - community/acute geriatricians - a critical mass that could support some sub-specialist clinical roles - varied training opportunities for all staff groups Reliant on SLA s between the trusts and different IT systems Yes under collaboration heading 3. Must generate financial savings to ensure safe and sustainable services for patients Scores Continue high quality services within the financial envelope Ensure long term financial viability of any new provider Historical difficulties in recruiting specialist staff to some back office areas, this option offers little chance to fill these skills gaps through collaboration. Financial risk rating will be 1 for each year Recurrent saving against baseline of 1.6m including a reduction of 270k agency fees through single merged Estates team, fully merged procurement team. Financial risk rating will be 1 for each year Savings of 2.1M against baseline costs including a reduction of 278k on back office agency fees. This overall saving is 841k more than option 2. Savings are predominantly a reduction in one set of executive directors, and one set of senior operational managers. A merged set of Executives will be working across the two organisations and will have an improved ability to move and allocate resource according to operational and clinical pressures. This will increase the ability of the organisations to maintain and drive improvements to quality and efficiency standards. Financial risk rating will be 1 for each year Option 4 One organisation One less organisation to negotiate with in delivering the STP future vision for services in Cambridgeshire and Peterborough. Greater ability of management to focus on STP as they wouldn t be continuing to manage unsustainable services. As option 3 but without organisational barriers Yes under the consolidation heading Improved savings of 9M against the baseline costs including all agency fees for back office are eliminated and reduction of 1.7M against non-pay costs on software systems and external contractors. Financial risk rating: FY17 (Plan) 2 FY18 (F cast) 2 FY19 (F cast) 2

141 Option 1 Do nothing Option 2 Shared services Option 3 Two boards, one executive team Option 4 One organisation forms FY20 (F cast) 3 FY21 (F cast) 3 Significant financial savings through synergies and better use of physical capacity There are no savings available related to physical assets, or combined savings through joint procurement of systems and external contracts. Opportunities for better collaboration and synergies: HR - Learning and Development - Organisational Development - Occupational Health - Recruitment Corporate Nursing - Chaplain service - Professional Standards roles - Volunteer Service Unlikely however to result in significant pay cost reductions within those departments as the same volume of staff and patients will need to be served across both sites. There may be some opportunities to venture into SLA s on back office service such as Sterile Services, Health Records and Pathology in the future. There are no additional synergies available in this option over and above what could be possible in option 2. An advantage could be an improved ability (both speed and effectiveness)to drive quality and operational efficiency improvements with one executive per department, but this is unquantifiable financially for the purposes of the OBC. 4. Must be affordable, making the best use of public funds Scores The cost of investment must relative to the financial benefits The payback period should be reasonable Must consider what/whether central funding will be available within the LHE The costs are equal to the continued deficit position for both trusts Not applicable Central funding will not be provided indefinitely and will be dependent on a credible turnaround plan Estimated costs are roughly equal to the value of one full year of the estimated savings. The estimated savings of this option are 1.6m. Payback period of around one year assuming that all SLA s can be agreed in that period Central funding will not be available for this option Estimated costs are roughly equal to half the value of one full year of the estimated savings. A reasonable estimate of costs include OBC development of 100k (inc VAT), plus legal fees of 800k for a full suite of SLA s plus governance arrangements for the Alliance Board and management of the collaborative, making a total of 900k plus 1.2M redundancy cost Payback period of around one year assuming that all SLA s and governance arrangements can be agreed in that period. Given the complexity of the governance, and the experience of the Salford trusts, it is suggested that the actual payback period will be two years. Central funding will not be available for this option TOTAL SCORES RANK A fully merged organisation maximises all available opportunities for working together to deliver savings and use physical capacity better to maximise use of clinical space on both sites to drive income opportunities. This option is the only one where IT systems can be fully aligned (with one set of patients) and financial reporting can achieve the efficiencies of only one set of accounting reports. This allows the merged Trust to negotiate non-pay system savings as well as significant pay savings associated with managing them. The transition costs of 8M for this option are roughly equal to one full year of the anticipated level of savings. Costs include development of the FBC (legal, due diligence, CMA engagement) 4m, and redundancy 3.2M plus 800K for project management and implementation costs. Payback period of around one year assuming that all FBC and competition issues can be resolved in that period. Given the complexity and number of posts which will be redundant, it is suggested that the actual payback period will be two years. Funding could be sought from national bodies

142 Option 1 Do nothing Option 2 Shared services Option 3 Two boards, one executive team Option 4 One organisation 5. Must be deliverable and acceptable to patients and other stakeholders including staff Scores Maintain safe staffing levels Maintain commissioner requested services Minimise the extent to which patient choice is reduced Ability to align culture and other values in a short period of time Medical Directors have identified services that are currently unsustainable. Some services will not be sustainable and as a result maintenance will be threatened. Some services will not be sustainable and as a result choice will inevitably be reduced. No plan to align cultures Merged clinical services would provide greater opportunities for staff to develop, gain new skills and rotate across services. This in turn will lead to an increase in staff satisfaction which in turn should lead to improved retention rates in those services and help support safe staffing levels. Will support some services, but reliant on SLA s being maintained Improved patient experience for patients and public visiting our hospitals and safe staffing levels will directly improve patient safety and length of stay. Alignment not required under this option and therefore might be more acceptable to some staff, however if there were increased use of SLAs to provide individual services, then the provider organisation would need to be sensitive to, and align outputs to the needs of the other. Rotas and ability to recruit - Opportunities to share rotas and out of hours cover across both sites e.g. Haematology at HHCT, Gastro 7-day bleed service at PSHFT - Larger critical mass will allow greater opportunities for training, a varied workload, and sub-specialisation will help recruitment and retention. Specialist services such as Haematology and Pain Services at HHCT site could be provided through the PSHFT team if the two trusts agreed this under an SLA Opportunity to collaborate to improve efficiency, cross-cover and patient access in: - Radiology - Cardiology - ENT - Respiratory Medicine - Stroke - Haematology - Pain - Ophthalmology - Diabetes All reliant on SLA s between the two organisations Some opportunities to align as a result of a single executive team, but with two separate organisations with two boards, this could perpetuate and develop differences. 6. Aligns to STP plans that aim to secure sustainable and safe services for patients Scores Enabler to address the capacity mismatch across the patch Not addressed as the two trusts are not working together to make better use of the available estate Medical Directors suggest the following services could be delivered more collaboratively, to address capacity mismatch: - ENT - Haematology - Ophthalmology With both organisations working with a consistent set of policies, procedures, equipment standardisation, staff would be better able to move and work between organisations with continuity of working practices. Balancing of resources could be more flexible than option 2 because staff would be working under one management structure. But, flexing capacity between organisations may be very costly and time consuming to appropriately track and Clinical Reference Group and Medical Directors have identified opportunities to share rotas and out of hours cover across both sites particularly favourable for services that are currently unsustainable, or struggling Larger critical mass will allow greater opportunities for training, a varied workload, and subspecialisation which all help recruitment and retention. Specialist services such as Haematology and Pain Services at HHCT site could be provided through the PSHFT team Greater opportunity to support services across both sites. Areas the CRG identified as having most opportunity for collaboration to improve efficiency, cross-cover and patient access are: Radiology, Cardiology, ENT, Respiratory Medicine, Stroke, Haematology, Pain, Ophthalmology, Diabetes This option is complex and disruptive in the short term. A survey of executives who have managed through mergers, [said that culture clash] was the No. 1 reason for a deal s failure to achieve the promised value. Increases the level of collaboration beyond the other options as clinical teams work for one organisation.. Operating under a single organisation, a single executive team and support services and a single board, many complexities will be removed and use of capacity, particularly for elective activity could be much more flexible.

143 Option 1 Do nothing Option 2 Shared services Option 3 Two boards, one executive team manage via multiple SLAs. Option 4 One organisation Compatibility with the clinical work streams currently underway Ability to build on local clinical collaborations and work already done [with UCP] in the community Aligns with the principles of the Five Year Forward View Does not preclude the organisations from further clinical collaboration, however without closer collaboration the STP work will not develop at the required pace. Frail medical specialist centre / Health Campus at HHCT aligns to the plans for a community hub location developed by UCP No Partial compatibility with: - elective pathway work streams - Estates pathway - Urgent and emergency care Build on areas we have collaborated under the Elective Care Programme work stream. Medical Directors suggest the following services could be delivered more collaboratively, some of which could be part of an SLA: - Radiology - Cardiology - ENT - Hand Surgery - Respiratory - Stroke - Nephrology - Haematology - Oncology - Anaesthetics - Ophthalmology - Diabetes Yes under the contractual heading Option 3 increases the chances of effective collaboration beyond those set out in option 2 as executive teams would be in a position to directly steer and control the collaboration of clinical teams for both organisations they would be managing.. The experience of orthopaedics and ENT showed that even with the support of both executive teams, lack of harmonised policies, procedures and procurement add delay to the collaboration. In time, a single executive team and support services should lead to greater harmonisation subject to the two boards agreeing. As option 2 plus the older people hub could be better supported by larger clinical teams offering recruitment and retention opportunities for: - community/acute geriatricians - a critical mass that could support some sub-specialist clinical roles - varied training opportunities for all staff groups Reliant on SLA s between the trusts and different IT systems Yes under collaboration heading 7. Must generate financial savings to ensure safe and sustainable services for patients Scores Continue high quality services within the financial envelope Historical difficulties in recruiting specialist staff to some back office areas, this option offers little chance to fill these skills gaps through collaboration. Recurrent saving against baseline of 1.6m including a reduction of 270k agency fees through single merged Estates team, fully merged procurement team. Savings of 2.1M against baseline costs including a reduction of 278k on back office agency fees. This overall saving is 841k more than option 2. Savings are predominantly a reduction in one set of executive directors, and one set of senior operational managers. A merged set of Executives will be working across the two organisations and will have an improved ability to move and allocate resource according to operational and clinical pressures. This will increase the ability of the organisations to maintain and drive improvements to quality and efficiency standards. One less organisation to negotiate with in delivering the STP future vision for services in Cambridgeshire and Peterborough. As option 3 but without organisational barriers Yes under the consolidation heading Savings of 8.6M against the baseline costs including all agency fees for back office are eliminated and reduction of 1.4M against non-pay costs on software systems and external contractors.

144 Ensure long term financial viability of any new provider forms Significant financial savings through synergies and better use of physical capacity Option 1 Do nothing Financial risk rating will be 1 for each year There are no savings available related to physical assets, or combined savings through joint procurement of systems and external contracts. Option 2 Shared services Financial risk rating will be 1 for each year Opportunities for better collaboration and synergies: HR - Learning and Development - Organisational Development - Occupational Health - Recruitment Corporate Nursing - Chaplain service - Professional Standards roles - Volunteer Service Unlikely however to result in significant pay cost reductions within those departments as the same volume of staff and patients will need to be served across both sites. There may be some opportunities to venture into SLA s on back office service such as Sterile Services, Health Records and Pathology in the future. Option 3 Two boards, one executive team Financial risk rating will be 1 for each year There are no additional synergies available in this option over and above what could be possible in option 2. An advantage could be an improved ability (both speed and effectiveness)to drive quality and operational efficiency improvements with one executive per department, but this is unquantifiable financially for the purposes of the OBC. 8. Must be affordable, making the best use of public funds Scores The cost of investment must relative to the financial benefits The payback period should be reasonable Must consider what/whether central funding will be available within the LHE The costs are equal to the continued deficit position for both trusts Not applicable Central funding will not be provided indefinitely and will be dependent on a credible turnaround plan Estimated costs are roughly equal to the value of one full year of the estimated savings. The estimated savings of this option are 1.6m. Payback period of around one year assuming that all SLA s can be agreed in that period Central funding will not be available for this option Estimated costs are roughly equal to half the value of one full year of the estimated savings. A reasonable estimate of costs include OBC development of 100k (inc VAT), plus legal fees of 800k for a full suite of SLA s plus governance arrangements for the Alliance Board and management of the collaborative, making a total of 900k plus 1.2M redundancy cost Payback period of around one year assuming that all SLA s and governance arrangements can be agreed in that period. Given the complexity of the governance, and the experience of the Salford trusts, it is suggested that the actual payback period will be two years. Central funding will not be available for this option Option 4 One organisation Financial risk rating: FY17 (Plan) 2 FY18 (F cast) 2 FY19 (F cast) 2 FY20 (F cast) 3 FY21 (F cast) 3 A fully merged organisation maximises all available opportunities for working together to deliver savings and use physical capacity better to maximise use of clinical space on both sites to drive income opportunities. This option is the only one where IT systems can be fully aligned (with one set of patients) and financial reporting can achieve the efficiencies of only one set of accounting reports. This allows the merged Trust to negotiate non-pay system savings as well as significant pay savings associated with managing them. The transition costs of 8M for this option are roughly equal to one full year of the anticipated level of savings. Costs include development of the FBC (legal, due diligence, CMA engagement) 4m, and redundancy 3.2M plus 800K for project management and implementation costs. Payback period of around one year assuming that all FBC and competition issues can be resolved in that period. Given the complexity and number of posts which will be redundant, it is suggested that the actual payback period will be two years. Funding could be sought from national bodies

145 Option 1 Do nothing Option 2 Shared services Option 3 Two boards, one executive team TOTAL SCORES RANK Further detail of the information available for the option appraisal is given below. Option 1 - Do nothing for now Figure 1 - Summary of option 1 Option 4 One organisation Existing formal SLA s and secondments in some areas Assumptions Separate Board and external reporting Separate policies and governance Existing SLA s for orthopaedics, general surgery and ENT FY21 combined forecast deficit for both trusts of m Forecast deficit by FY21 of - 7.8m Deficit growth mitigated by Estate strategy (sale of land and lease income), but still not break even Clinically unsustainable services in haematology, pain and stroke Seven day service additional pressure Forecast deficit by FY21 of m Deficit growth mitigated by above national average CIP, but still not break even Clinically unsustainable services in stroke, ENT and haematology if seven day service required Continued outsourcing to the private sector where there is insufficient bed capacity Both trusts will continue to operate as two separate organisations with back-office and clinical teams working largely as they do now (Figure 1). This assumes no greater collaboration than exists currently. It does not mean however that collaboration of any kind cannot occur at some point in the future, and due to unsustainability of certain services there will almost certainly need to be future changes to services at one or both sites. The System Transformation Programme forecasts that activity demand will continue to rise, even after QIPP, over the coming years. If we continue to deliver hospital inpatient care as we do now, population and rising

146 acuity pressures mean we would need an additional 219 hospital beds in five years time across both PSHFT and HHCT to meet the demand for elective and non-elective care. There are insufficient finances to create these additional beds which may mean that service provision would need to be altered or ceased entirely to fit within available capacity. While there has been come collaboration in orthopaedic and ENT specialties, this is on a small scale and does not address the capacity mismatch across the organisations. Option 1 will therefore result in increased outsourcing of low-risk activity and increased in-hospital cancellations of operations. Aligns to the Sustainability and Transformation Plan Option 1 does not preclude the organisations from further clinical collaboration without back office integration, however without closer collaboration the STP work will not develop at the required pace. The mismatch between demand and the available capacity is not sufficiently addressed under this option as the two trusts are not working together to make better use of the available estate. The strategy to provide a frail medical specialist centre / Health Campus at HHCT by co-locating acute medical care with primary care, therapy, step-down/intermediate care capacity, pharmacy and older peoples mental health contributes to aligning capacity and demand for this population sector and can still be achieved under option 1. This strategy is aligned to the plans for a community hub location developed by UCP and could be extended to South-East Peterborough patients in particular. ENT and orthopaedics have provided examples of how the two trusts can collaborate effectively to use spare capacity in one trust to support excess demand in the other. This has resulted in some reduction in outsourcing to the private sector while reducing waiting times for patients. Without further collaborations the two trusts ability to meet growing demand within their own capacity while delivering efficiencies, will be limited. The existing arrangements may end as SLA s can by definition be ended by either party with notice. Examples include the SLA s between HHCT and CUHFT. Must generate financial savings to ensure safe and sustainable services for patients and stakeholders The cost for back office at both organisations currently stands at 126M. This includes 800k of agency costs that is in place across both organisations in back office services. Due in part to historical difficulties in recruiting specialist staff to some back office areas i.e. Estates and Facilities, this option offers little further chance to fill these skills gaps via opportunities arising from collaboration. Spending 800k per annum recurrently on agency fees does not represent value for money and diverts funds away from investment in frontline services. CQC reports of both organisations highlight areas for investment and improvement and given the deficit position, medium to long term lack of investment could begin to impact significantly on the quality of services each provides. In addition to the lack of pay related savings there are no savings available related to physical assets, or combined savings through joint procurement of systems and external contracts. Must be deliverable and acceptable to patients and stakeholders Medical Directors have identified services that are currently unsustainable i.e. Haematology and Pain Services at HHCT. Where it is not possible to recruit staff, or the scale of operation is insufficient to sustain specialist staff and resources, services will have to stop or be outsourced to another provider which would be unacceptable to patients and the public. There will be no impact on patient choice in the short term, but in the longer term as has been described in the OBC main document, some services will not be sustainable and as a result choice could be reduced

147 Must be affordable, making the best use of public funds Option 1 appears to involve zero investment, however as both trusts are in deficit, without collaboration there will be significant ongoing use of agency. Therefore the actual investment in continuing services is much higher and will require further investment by the tax payer. Examples include the duplication of IT systems which both trusts are required to procure as part of the national drive towards electronic patient records. Requirement for safe staffing levels to meet national initiatives is not included in the baseline position as it is unknown what additional investment this will entail. Option 2 - Some back office and clinical collaboration Under the Dalton Review (2014), this collaboration represents a contractual agreement between the two trusts. This option assumes increased levels of collaboration beyond, or to formalise, the areas where we already support each other. The level of sharing ranges from part time secondment of individuals, through to one or more completely shared services, hosted by one of the organisations but working equally across both (Figure 2). Figure 2 - Back office and clinical collaborations Part time secondment Staff will work as part of an extended team across both trusts sites; or Staff have a substantive contract with one trust but work on secondment for all or part of their week, or for a defined period of time for the other. Presence on both sites Attend external meetings on behalf of the organisation they are employed by on that day Duration of agreement agreed by both organisations, with neither being committed beyond the agreed term Examples include Director of HR from PSHFT on secondment to HHCT and PSHFT procurement management working part time at HHCT Shared services Services provided to the employing trust, and the other trust under a series of service level agreements (SLAs) or contracts. For shared clinical support services e.g. radiology both trusts maintain separate groups of patients and management of 18 week pathways, external and internal reporting etc. Examples include HHCT membership of the Pathology Partnership Arrangements already exist for visiting consultants in some specialties, making use of scarce clinical resource. While this can help both organisations and benefit patients, it can lead to organisational difficulties as the trusts have their own group of patients to care for but less flexibility over resources to meet individual fluctuating demands. This has on some occasions led to breaches in patient access targets for one or both trusts and the ending of SLA s. A further complexity is the varying governance, policies and processes that exist in separate organisations. While attempts would and should be made to streamline these in order to improve patient safety and operational efficiency, there is no guarantee that two separate executive and non-executive Boards would agree to this arrangement, leaving clinicians at risk of working with two sets of governance processes and thereby increasing risk. Creating a shared back office across the two organisations is attractive as it provides efficiencies in areas with minimal direct patient contact. However, patient records and IT are an area of concern. A clinician on the project has observed that one set of documentation is a key enabler to facilitate the clinical collaboration required to maintain and improve patient access. IT and information services cannot be merged whilst there are two separate organisations due to the requirement for separate statutory reporting.

148 Creating shared non-clinical back office services does not encounter these difficult operational realities and in some areas such as procurement, estates management etc. some true efficiencies could be realised through one organisation providing services for the other under an SLA arrangement. With one single team, specialist skills of individuals in estates for example could be shared across both sites and reduce the need for agency staff. Other savings are likely to be achieved in the future through larger procurement and contract agreements with external suppliers. Figure 3 illustrates how option 2 will build on the current SLA s which already exist between the trusts. Whilst both organisations are still two legal entities there will still be a requirement for external reporting and regulation to remain separate, and this limits the workforce savings available in other areas of back office functions. For example, both trusts are required to submit separate accounts, patient data and performance reports. Figure 3 - Option 2 HHCT/PSHFT SLA's SLA s and secondments for additional SLA s in procurement, HR, Estates, corporate nursing Assumptions Separate Board reporting SLA development and monitoring Separate policies and governance SLA s for additional clinical services e.g. stroke and haematology and diagnostic imaging FY21 combined forecast deficit for both trusts of m Potential SLA s for service in haematology and stroke Seven day service additional pressure Maternity and ED reviews require greater collaboration Continued requirement for back office support Deficit growth mitigated by above national average CIP, but still not break even Clinically unsustainable services in stroke, ENT and haematology if seven day service required Continued outsourcing to the private sector where there is insufficient bed capacity

149 The work plan for each shared service will be agreed jointly by the trust at least annually, and performance will be monitored and reported in line with normal SLA management practice. As with any SLA, either organisation is able to serve notice and cease to be involved with the arrangement. For the provider organisation this could leave additional excess staffing costs for a period of time and for the employing organisation it could leave them at risk of being unable to provide a local service to their patients and meet contractual and performance requirements at short notice. This option may have a positive impact on bed capacity as clinicians from one trust make greater use capacity in the other. Aligns to the Sustainability and Transformation Plan Both trusts are actively engaged in seeking increased collaboration in the Sustainability and Transformation Plan work streams. Option 2 will build on areas we have collaborated under the Elective Care Programme work stream. Medical Directors suggest the following services could be delivered more collaboratively, some of which could be part of an SLA: - Radiology - Cardiology - ENT - Hand Surgery - Respiratory - Stroke - Nephrology - Haematology - Oncology - Anaesthetics - Ophthalmology - Diabetes The transfer of ENT activity from PSHFT to HHCT and use of HHCT theatres and wards by PSHFT orthopaedic surgeons is already managed under service level agreements. Learning from this collaboration provides a template for expansion in other clinical services and supports the STP theme of providing care across boundaries. Areas identified for future back office collaboration under option 2 are shown in Figure 4. Option 2 would also offer opportunities to share clinical resource and capacity between organisations. For example, SLAs could be established to undertake a proportion of one trust s elective activity at the other site on a regular basis. This would help address the mismatch between capacity and demand across the patch.

150 Figure 4 - Option 2 collaboration opportunities CEO + Greater collaboration between the two CEO s - As there will be two separate organisations, there is a continued need for two executive teams Finance + Procurement opportunity - Other financial services are already outsourced at PSHFT HR + Learning and Development, Occupational Health and Recruitment teams could SLA - Insignificant reduction in cost Estates/facilities + Reduce spend on agency + Economies of scale in non-pay areas such as soft FM and logistics - Set up costs for SLA s and ongoing monitoring costs IT/IS - Two sets of patients, information governance requirementsto keep data separate - Costs of managing the data, reporting and software licencing etc. remain. Corporate nursing + Share chaplaincy, professional standards and lead nurse for children and volunteer services. Operations -No opportunities under this option Clinical support +/- Possible opportunities (as/when regional PACS (electronic image sharing) issues are resolved) for shared reporting in diagnostic imaging. Must generate financial savings to ensure safe and sustainable services for patients and stakeholders This option delivers a recurrent saving against baseline of 1.6m including a reduction of 270k agency fees by having a single merged Estates team. The saving also includes a fully merged procurement team which can be run on an SLA basis to deliver a reduction in substantive pay costs for the procurement team as long as they were co-located on a single site. There is only a minimal substantive pay reduction in Estates due to the large variation in the types of site both organisations have e.g. large PFI at PSHFT and large retained estates at HHCT. In addition, the health campus vision at HHCT will demand that specialist staff remain working on site. There are opportunities identified to establish SLA s for Heads of Service in clinical support services such as pharmacy, diagnostics, emergency planning, sterile Services, health Records and Pathology (although note that HHCT is already in a shared service with tpp) in the future. This will result in a minimum of 260k pay savings per annum and could result in efficiencies associated with physical space, providing opportunities to use redundant space for clinical income opportunities. As yet the estates opportunities are unquantified as they cannot be guaranteed. Other back office soft benefits include opportunities for staff to develop, gain new skills and rotate across services which may lead to improved staff morale and therefore recruitment and retention rates. There are additional costs associated with developing each SLA and the ongoing management associated with monitoring patient flows and coordinating patients across the two sites.

151 Deliverable and acceptable to patients and stakeholders The Medical Directors identified services with potential for collaboration based on current service vulnerabilities. If collaboration in these areas helps to support continued delivery of services at their current locations, then this will be a viewed as a positive step for patients and local stakeholders. A reduction in agency spend, better alignment of capacity leading to reduced elective cancellations are other examples which would be positive to patients and local stakeholders. Merged clinical services would provide greater opportunities for staff to develop, gain new skills and rotate across services. Development opportunities are usually linked to an increase in staff satisfaction which in turn should lead to improved retention rates in those services and help support safe staffing levels. All of this should lead to an improved customer service experience for patients and public visiting our hospitals and safe staffing levels will directly improve patient safety and length of stay. The need to align whole organisational cultures is not required under option 2 and therefore might be more acceptable to some staff, however if there were increased use of SLAs to provide individual services, then the provider organisation would need to be sensitive to, and align outputs to the needs of the other. For any teams (clinical or back-office) combined under this option, culture would be a factor to manage at service level. Readiness to do so will be a factor in the selection of the service to be shared and other departments and teams which depend on the shared service. Must be affordable, making the best use of public funds The estimated costs are roughly equal to the value of one full year of the estimated savings. It is assumed that there will be no full business case development under this option. The estimated savings of this option are 1.6m. SLA s will be developed which may require legal advice, and management time. A reasonable estimate of costs include OBC development of 100k (inc VAT), plus legal fees of 400k for a full suite of SLA s including clinical, making a total of 500k plus 600k redundancy cost. Option 3 - Two boards, one executive team and one operational organisation Under the Dalton Review (2014), this collaboration represents a contractual arrangement. This option is the least well known in the acute sector of the NHS and is therefore more theoretical. In September 2015 NHS England released a set of 13 acute care vanguards that had been approved to link together local hospitals in order to improve clinical and financial viability. A single executive team will be accountable to two Boards, with two separate and distinct groups of nonexecutive directors, for the delivery of all services and strategic direction of both organisations. Both organisations retain separate legal identities, with separate meetings to consider matters relating to their own trusts, and each remains accountable for external governance and regulatory requirements. Due to this there are some departments such as Finance and IT where the majority of the staff would need to remain in place to support two separate external reporting functions, two sets of patients and two legal groups of staff. Under this option, as far as possible, clinical and operational teams will be able to merge as described by the executive teams. Each support team will have a single base but a presence on both trust sites. Outside of the acute NHS sector there are other examples of where a single executive team has reported to two separate boards, however there is little available evidence as to whether this was successful and/or lessons learnt as to how to make this model work effectively.

152 Figure 5 - Option 3 HHCT/PSHFT 'chain' Merged corporate teams, and operational management. Potential for shared governance committees e.g. Drug and therapeutics, Clinical audit and Effectiveness, R&D and Clinical Ethics SLA s/secondments for merged services Separate teams: IT/IS teams to support separate records and data sets, and board reporting Separate HR site teams Additional estates staff to report to two boards Senior deputy for corporate nursing required for each site Assumptions SLA s for additional clinical services Separate Board reporting SLA s to be developed and monitored Separate policies and governance FY21 combined forecast deficit for both trusts of m Merged executive team and corporate teams Seven day service, maternity and ED collaboration across both trusts enabled through single executive and operational teams Separate governance and policies addressed partially through joint trust committees Partial merger of back office SLA s required for merged services Separate internal and external reporting requires separate back office e.g. IT/IS SLA monitoring required Risk and reward There will be an agreed approach to risk and reward for both trusts. Hempsons solicitors (2016) suggest that this would be an area for agreement at a joint Alliance board. Board accountabilities The boards will comprise the non-executive directors of each trust with executives from the single team sitting on both boards. The PSHFT board will continue to be accountable to their governors whereas the HHCT board

153 will continue to be accountable to the Secretary of State for Health through the NHS TDA. The executive and advisors to the boards will act and advise in accordance with these separate accountabilities. Significant transactions such as major capital investment and other financial commitments will be reserved matters for both Boards. Hempsons (2016) suggest a joint Alliance board meeting will be held periodically to coordinate members, agree annual or five year strategies and allocate risk and reward. Management structure The two boards will set the strategic direction for their trusts. The executive will provide a networked view of leadership and delivery for the operational management team(s) depending on the structure agreed. Working as part of a chain, there is an expectation that the executive team will provide strategic direction, with a consistent approach across both organisations to principles, philosophies and ways of working. Policies and standard operating procedures, governance arrangement, SFIs, approval processes etc. will all be aligned. However, this is within the context that individual boards, operating under separate regulatory frameworks, and with the time horizon defined by the duration of the chain agreement will have the final decision, and by definition may not always agree. Back office The single executive team will be supported by combined back office functions that will merge wherever possible to one or other of the trusts or externally, and staff will transfer to one of the trusts to meet the combined needs of both organisations. For any merged functions (back office, or clinical); services will be provided to the other trust under a series of service level agreements (SLAs) or contracts. The shared philosophies and principles will allow adoption of merged policies, with a process where the two boards fail to agree. The back office functions will be responsible for providing the separate accounts, contracts, audits, inspections, and both trusts will have separate quality, financial and performance metrics and ratings. There will be a programme of work for the back office functions, signed off in advance by both Boards. This programme will be varied by the executive team during the year with significant changes being a reserved matter for consideration by the Boards. Aligns to the Sustainability and Transformation Plan This option increases the chances of effective collaboration beyond those set out in option 2 as one executive team can directly oversee and align clinical teams for both organisations. This could lead to integration in a shorter timespan than in option 2. The experience of orthopaedics and ENT shows that even with the support of both executive teams, lack of harmonised policies, procedures and procurement adds delay to the collaboration. Therefore a single set of these created by a single executive will assist in greater harmonisation. Opportunities for shared corporate services are shown in Figure 6.

154 Figure 6 - Option 3 collaboration opportunities CEO + Shared Executive Finance + Estates and procurement - Shared Director of Finance post, actual savings will be minimal as they will require support to meet the needs of two separate boards. HR + Learning and Development, Occupational Health and Recruitment teams could SLA - Director posts but reporting to two separate Boards will require a site HR site director for both trusts to operationally manage the day to day functions and strategies. Estates/facilities + Agency, soft FM, logistics - Additional staff resource to manage reporting to two separate boards IT/IS - Two sets of patients, information governance requirementsto keep data separate - Costs of managing the data, reporting and software licencing etc. remain. Corporate nursing + Share chaplaincy, professional standards,lead nurse for children and volunteers - Additional cost due to different governance arrangements within both trusts Operations + Joint operational management at bands 8a and above managerial roles including divisional heads of nursing - Exclude matrons who need to remain on each site to focus on quality Clinical support +/- Opportunities to collaborate at head of department level, although not in maternity or pharmacy Opportunities for single governance committees within a comprehensive shared structure under this option include Drug and therapeutics Committee, Clinical Audit and Effectiveness, R&D and Clinical Ethics. Option 3 would not necessarily deliver the required level of medical collaboration although if a clinical service chain model is followed then this would deliver full collaboration whilst it was in place. Haematology and some of the other clinical services have identified the requirement to move staff across a single organisation with joint standards and policies. Previous attempts at working to an SLA have had to end once one or the other parties have come under strain e.g. haematology. In theory therefore this arrangement could be dissolved although one might consider this unlikely once the change is fully embedded and savings are realised as it would require investment to dissolve the arrangement. As with the previous options the strategy to provide a specialist frail medical specialist centre by collocating acute medical care with primary care, therapy, step-down/intermediate care capacity, pharmacy and older peoples mental health will focus on providing care for this population. A merged executive team working across two organisations will have an improved ability to move and allocate resource according to operational and clinical pressures which will support greater use of available capacity. Must generate financial savings to ensure safe and sustainable services for patients and stakeholders This option would deliver savings of 4.3m against baseline costs but costs still include 500k of agency spend in IT predominantly which cannot be eliminated whilst there are two sets of patients (a requirement of two separate legal entities) and therefore two separate departments. This overall saving is 2.7m more than option 2. The savings are predominantly made up of a reduction in executive directors and senior operational managers on top of those delivered in option 2.

155 A merged executive team will work across two organisations and have an improved ability to move and allocate resource according to operational and clinical pressures. This will increase the ability of the organisations to maintain and drive improvements to quality and efficiency standards. Must be deliverable and acceptable to patients and stakeholders Patient benefits relating to collaboration on clinical and non-clinical services are equal in option 3 to option 2. In fact most external stakeholders are unlikely to see much difference in care delivery with option 3 than they would see in option 2. With more services being run in a merged fashion, then choice of provider becomes reduced for patients, although in most instances there are other alternative providers within a reasonable geographic distance that could be a viable alternative. Option 3 is arguably the most difficult in which to achieve alignment of cultures as there is a risk staff will feel they work for either one, or both organisations. If there are issues that the two boards take a different stance on, this will perpetuate those differences. Because the two organisations remain separate and distinct from one another, these differences will continue in the long term unless the executive leadership team invest considerable energies in ensuring the same values, behaviours and culture are present throughout both organisations. A single executive team running services as one operational organisation would be subject to a referral to the UK Competition and Markets Authority (CMA). Early analysis would suggest that competition exists between the two trusts in maternity services, with mothers in the southwest of Peterborough exercising choice between PSHFT and HHCT. The trusts would need to engage with the CMA to ensure patient choice was not adversely effected by progressing with this option. Must be affordable, making the best use of public funds The estimated costs are less than one third of the value of one full year of the estimated savings. It is assumed that there will be no full business case development. Savings are estimated at 4.3m. SLA s will be developed which may require legal advice, and management time. A reasonable estimate of costs include OBC development of 100k (inc VAT), plus legal fees of 800k for a full suite of SLA s plus governance arrangements for the Alliance Board and management of the collaborative, making a total of 900k plus 700k redundancy cost. Option 4 - Full union of both trusts to create a single organisation Under the Dalton Review (2014), this collaboration represents a consolidation. A single trust will be created from the two trusts with a single board (Figure 7), a new structure with staff automatically transferring into the new organisation, or applying for posts within it. All services, corporate, back office and clinical teams will be part of the same organisation, managed by a single executive team.

156 Figure 7 - Option 4 merged organisation Merged back office teams Merged clinical teams FY21 combined forecast deficit for both trusts of m Removes cost of one board Single finance, HR, Estates, IT/IS, corporate nursing team Additional merger of clinical teams including imaging Shared staff bank to reduce agency spend Single IT system Single operational management team including divisional heads of nursing Merged heads of pharmacy and maternity Continued outsourcing to the private sector where there is insufficient bed capacity As a single organisation, this option allows one set of patients and staff from a clinical and non-clinical system point of view which then allows one single set of external reporting and governance arrangements. This allows the maximum back office saving as only one set of back office staff to produce these reports is needed, and only one set of IT systems. The arrangement is also permanent and therefore the savings are more robustly assured to be long term and final, and will also deliver efficiencies across the health system with other organisations (CCG s, community providers etc) having a single entity to contract with (though these are not quantified in savings). The advantages of having single clinical teams have been described in previous options although having teams employed and driven by a single board may enable clinical improvements and efficiencies to be delivered at a faster pace and/or go further and be more sustainable. The risk to this option are based around the complexities and time required to join two organisational cultures, and whether the distraction of this will cause issues in performance and/or quality delivery. This will need to be tightly managed to ensure it does not occur. A further risk that will need tightly managing is the public perception and concerns that services might be shut at either site either now or in the future.

157 has the advantage For the high level assessment, the merger process has been assumed to take between months and the savings are based on the high level executive assessment. The benefits and risks of this option are described in more detail in the option appraisal. Aligns to the Sustainability and Transformation Plan Option 4 increases the level of collaboration beyond the other options as clinical teams will work for one organisation. Learning from the pilot transfer of elective activity for orthopaedics and ENT showed that even with the support of both executive teams, differences in policies, procedures, equipment and procurement add significant complexity to the collaboration. Operating under a single organisation, a single executive team and support services and a single board, many of these complexities will be removed and use of capacity, particularly for elective activity could be more flexible. There will be a lead in period for harmonisation, until single policies are adopted across the whole organisation. Opportunities for shared corporate services are shown in Figure 8. Figure 8 - Option 4 collaboration opportunities CEO + Shared Board including NED and Executive directors Finance +Full integration of finance teams + Some new posts to manage the finances of a larger trust, but an overall reduction in cost, particularly against current agency spend HR + One set of workforce information data and business partner support + Shared staff banks reduce reliance on agency + Lower turnover associated with more career opportunities and experience across three sites Estates/facilities + No sdditional staff resource to manage reporting to two separate boards + With a single owner of physical assets, greater opportunities for space and capital rationalisation IT/IS Corporate nursing + Single set of patient records rationalise costs of data management + Quality improvement and financial saving as patients move seamlessly between sites + Negotiation on price with software system suppliers. + Duplicateof roles almost eliminated + Additional cost for interim period to manage different governance arrangements + Single leadership, governance and policy improve CQC ratings faster Operations + Opportunities for collaboration through bringing together operational management at bands 8a and above managerial roles including divisional heads of nursing but excluding matrons. Clinical support + Opportunities to collaborate at head of department level + Maternity and pharmacy heads of service Clinical benefits With larger combined clinical teams, there are greater opportunities to sustain services across both sites. For example, with the additional five ED consultants recruited at PSHFT there will be more opportunities to sustain urgent care services at HHCT. The additional radiology capacity recruited at PSHFT will make sustainable services, and seven day reporting more sustainable across the new enlarged organisation. Activity forecasts show that activity demand will continue to rise (even after QIPP) over the coming years. Of the four options being considered, option 4 reduces or eliminates the most barriers to flexible management of elective capacity and therefore best supports delivery of the STP.

158 As with other options, the strategy to provide a specialist frail medical specialist centre by collocating acute medical care with primary care, therapy, step-down/intermediate care capacity, pharmacy and older peoples mental health is focussed on providing care for the growing elderly population. This strategy would be better supported by larger clinical teams offering recruitment and retention opportunities for community and acute geriatricians, a critical mass to support some sub-specialist clinical roles and varied training opportunities for all staff groups. Must generate financial savings to ensure safe and sustainable services for patients and stakeholders This delivers a saving of 9m against the current agreed baseline of FY16 costs. All agency fees for back office are eliminated as it can be presumed there will be enough staff within the two current organisations, to fill all substantive posts within the new organisation. This also includes a minimum reduction of 1.7m against non-pay costs on software systems and external contractors. As an improved financially viable organisation, more senior time can be spent focussing on improving the quality and efficiency of the new Trust, driving increased income and reductions in operating costs. This alongside the recurrent back office saving will allow greater investment in front line services, further driving improvements in quality of care. A fully merged organisation maximises all available opportunities for working together to deliver savings and use physical capacity better to maximise use of clinical space on both sites to drive income opportunities. This option is the only one where IT systems can be fully aligned, with one set of patients, and financial reporting can achieve the efficiencies of only one set of accounting reports. This allows the merged Trust to negotiate non-pay system savings as well as significant pay savings associated with managing them. Must be deliverable and acceptable to patients and stakeholders There may be an initial mixed response from local patients in both localities. Huntingdon population in particular may have concerns this option represents a threat to their local provision of services and there will need to be a strong communications campaign to ensure the local population is assured that delivering this option is not considering ceasing service provision at any site. The campaign needs to highlight the current concerns about service sustainability and if delivered effectively then patients will recognise that this option will strengthen their local services and this would be popular and acceptable. This option, although it offers the greatest potential benefit for efficiency savings and operational sustainability, is complex and disruptive to staff in the short term. A survey of executives who have managed through mergers, [said that culture clash] was the No. 1 reason for a deal s failure to achieve the promised value. Compared with the other options, there are issues of complexity: Monitor and the NHS Trust Development Authority need to approve mergers of foundation trusts and NHS trusts through separate review processes There are risks to bringing different cultures, and different organisational identities under one roof. Success is dependent on stakeholder buy-in Prolonged periods of uncertainty are arguably most damaging to the sustainability of service, morale and recruitment This option provides greatest opportunities for improving rotas and to recruit. The Clinical Reference Group and Medical Directors have identified opportunities to share rotas and out of hours cover across both sites

159 which will be particularly favourable for services that are currently unsustainable e.g. haematology at HHCT and the gastroenterology seven day bleed service at PSHFT. The larger critical mass will allow greater opportunities for training, a varied workload, and sub-specialisation which all help recruitment and retention. This business case does not propose changes driven by national guidance for maternity, urgent and emergency care which remain the responsibility of commissioners but a merged organisation would be better placed to respond to any commissioner reconfiguration. Must be affordable, making the best use of public funds The estimated savings under this option are 9m associated with reductions in Board costs and corporate pay and total elimination of the agency spend in back office areas. The transition costs of 8m for this option are roughly equal to one full year of the anticipated level of savings. Costs include development of the full business case including legal, due diligence, CMA engagement costs of 4m, and redundancy costs of 2.5m plus 800k for project management and implementation costs.

160 Appendix 12 Clinical services which will benefit from merger Description Does Option 4 largely address the issues/risks identified? Sustainability/ quality opportunity Accident & Emergency Acute Medicine HHCT/ PSHFT Current inability to recruit and retain medical and nursing staff due to size and case mix & career opportunities PSHFT have just appointed 4 A&E consultants. Roles and service delivery models are moving and changing, requiring nursing & AHP staff to develop to match changing models. Challenge for a smaller workforce. Nursing risks (recruitment and retention) 2 consultant vacancies (currently covered by locums) PSHFT has appointed 2 consultants but still has 2 additional vacancies but has 3-4 additional vacancies Partially System Transformation UECV workstream. Option 4 will allow a faster and more sustainable long-term ability for staff to work together to get a higher level of training, skills and experience. Other options don t guarantee the sustainability of this and may not therefore deliver improved rates of recruitment. Partially Issued relieved best though option 4 as a single organisational form will help drive and deliver a single team working in a joined up way to cover service gaps in delivery on both sites on a long term robust basis also linked to System Transformation UECV workstream Ambulatory Care Opportunities (linked to economies of scale) - OPAT Yes see Error! Reference source not found. 1 vacancy (covered by locum) Breast Service 2 breast radiologists due to start May/June (joint posts with CUH) Opportunities for efficiency/collaboration but no sustainability risks. PSHFT appointed one new consultant Yes see Error! Reference source not found.

161 Description Does Option 4 largely address the issues/risks identified? Sustainability/ quality opportunity Cardiology Respiratory Clinical haematology Diabetes Diagnostic imaging / Interventional radiology Endoscopy HHCT/ PSHFT HHCT one substantive consultant, with budget for 2.4 WTE to meet training needs. Opportunities for sub-specialism with greater catchment, e.g. repatriation of specialist procedures (PCI) See Thoracic med Unsustainable. No substantive HHCT consultants. Locum cover by general physicians not Haematologists. Unable to recruit. Opportunities for efficiency/collaboration but no sustainability risks. Multidisciplinary / SpNs / Podiatry HHCT & PSHFT outsourcing reporting/ use of locums as both unable to fill all consultant posts. Joined up IT essential. Good news HHCT. Full JAG accreditation. High Quality, 7-day bleed rota. Nurse endoscopist national society chair high profile. Sustainable & resilient (Opportunities for PSHFT to benefit) Yes see Error! Reference source not found. Yes see Error! Reference source not found. Yes see Error! Reference source not found. Yes see Error! Reference source not found. Yes see Error! Reference source not found. ENT 1 in 4 on-call cover at both trusts unsustainable Yes see Error! Reference source not found. Gastroenterology General Surgery No seven day bleed service at PSHFT PHSFT likely to benefit from linking with HHCT Endoscopy See endoscopy above Recruitment and retention challenges due to the reduced case mix Yes see Error! Reference source not found. Yes see Error! Reference source not found.

162 Description Does Option 4 largely address the issues/risks identified? Sustainability/ quality opportunity HHCT/ PSHFT See Partial see acute med. Geriatric Medicine Gynaecology Maternity Neonatology Nephrology - Acute medicine - Orthogeriatrics (single consultant) - Stroke Dementia services development (key to the Health Campus Strategy) good quality service. Opportunities come with scale. No IP gynae service (elective or non-elective.) Most work is DC in the TC. Options for providing future capacity under different service models. Linked to STP work. HHCT No recruitment issues. Quality & Patient experience scores high. Level One unit provided by CCS. Opportunity being explored via STP work. HHCT advice and support provided by Addenbrookes on an honorary contract Yes see Error! Reference source not found. No as no current problems System Transformation workstream No as no current problems System Transformation workstream Yes see Error! Reference source not found. Neurology HHCT single handed consultant Yes see Error! Reference source not found. Oncology See - McMillan Centre - Radiotherapy Yes see Error! Reference source not found.

163 Description Does Option 4 largely address the issues/risks identified? Sustainability/ quality opportunity HHCT/ PSHFT Ophthalmology Oral and max facs Ortho-Geriatrics Opportunity to undertake more activity at PSHFT dedicated theatre/proc room not used. HHCT single consultant PSHFT has a single dedicated consultant. Yes see Error! Reference source not found. Yes see Error! Reference source not found. Yes will provide more robustness to single handed services on both sites and allow cross cover during periods of annual leave so there is no service interruption for patients. Trauma and orthopaedics Paediatrics Pain Palliative care Location for elective surgery and possible development of spinal service within larger service. R&R for trauma nurses not HHCT Options being developed under STP work. HHCT not commissioned for a pain service. When spinal back pain service ceased the impact on PSHFT chronic pain referrals increased creating a capacity and demand challenge. PSHFT has a fully staffed complete MDT service including specialist pain psychologists, therapists and lead nurses providing a range of treatment options. HHCT. Fragile. One WTE consultant cover HHCT 16 nurses. Rotate through community. PSHFT has two consultants working into the local hospice Yes see Error! Reference source not found. Partially System Transformation workstream Yes would provide an opportunity for services to be delivered locally for Hunts patients as previously. Yes will provide more sustainability to a single handed medical service. Other benefits of a single service across the patch will be for staff to get experience in other settings and a more seamless service for patients moving between acute and community and home at this vulnerable time.

164 Description Does Option 4 largely address the issues/risks identified? Sustainability/ quality opportunity HHCT/ PSHFT and runs the community macmillan service. Pathology Plastics and dermatology Radiotherapy Respiratory TPP at HHCT. Own service at PSHFT. Sustainable but opportunities for >efficiency through >scale CUH unable to cope with demand. 3 rd PSHFT operational Autumn 16 Opportunity for HHCT catchment patients to access additional LINAC PSHFT closer to home. Supported by Cancer Network Papworth move to Addenbrookes may impact on HHCT residents and PSHFT flows TPP Yes see Error! Reference source not found. Yes see Error! Reference source not found. Partial Link to Papworth relocation Rheumatology Stable service with good reputation at HHCT and PSHFT Spinal surgery Stroke HHCT unsustainable in its current form. Single handed Consultant leaving imminently. see correlated impact under pain services No service at PSHFT HHCT unsustainable under current arrangements (issues = mix of financial/contractual & clinical no stroke physicians). Also no acute stroke care. Yes see Error! Reference source not found. Yes

165 Description Does Option 4 largely address the issues/risks identified? Sustainability/ quality opportunity Therapy services Urology HHCT/ PSHFT HHCT opportunities for efficiency through scale. Poor weekend cover PSHFT consultant gap some service fragility New service at HHCT 2-3 years ago. Now established locally, 4 consultants, service doing well. Opportunities for efficiency through scale Yes see Error! Reference source not found. Yes see Error! Reference source not found.

166 Appendix 13 Financial assumptions 1. PSHFT assumptions Assumptions Notes Units Inflationary and growth factors Note 1 Demographic increase Note 2 2.4% 2.4% 2.4% 2.4% 2.4% Tariff (deflator)/inflator 1.8% 0.1% -0.1% 0.0% 0.9% Other income 1.0% 1.0% 1.0% 1.0% 1.0% Pay & Pension inflation 3.3% 2.0% 1.6% 1.6% 2.9% Drug cost inflation 4.5% 2.8% 3.6% 4.2% 4.2% Other non-pay inflation (incl. PFI) 1.7% 1.80% 1.90% 2.10% 2.2% Income and expenditure account impact Cost improvement, savings and income CIPs Note 3 'm S&T Funding Note 4 'm PFI Funding Support 'm Investments and other costs Penalties Note 5 2.5m 2.5m 2.5m 2.5m 2.5m Non-cash releasing CIP's 0.0m 0.0m 0.0m 0.0m 0.0m Severance costs 1.3m 1.3m 1.3m 1.3m 1.3m PMO costs 1.0m 1.0m 1.0m 1.0m 1.0m Project Orange 1.0m 1.0m 0.0m 0.0m 0.0m Operational Contingency 1.7m 1.7m 1.7m 1.7m 1.7m 7 day working Note 6 0.0m 0.0m 0.0m 0.0m 0.0m CQUIN 4.0m 4.0m 4.0m 4.0m 4.0m Plan Forecast Forecast Forecast Forecast Notes: Inflationary and growth factors - we have used the STP planning guidance assumptions around inflation and tariff inflator. 1 Demographic increase has been derived using information from the draft 16/17 APR activity planning process (and aligns with the STP model for the C&PCCG portion). 2 Forecast to continue in the same percentage in future years. 3 CIPs - assumption of 3% plus 5m in years 16/17 and 2% in 17/18 and beyond 4 S&T Funding - assumed funding continues year on year 5 Penalties - assumption that only emergency readmissions of 2.5m would be applied. This expectation is based on Monitor's directions and is assumed to continue 6 7 Day working - assumed it will be self-financing 7 Depreciation does not include impact of additions outside the Trust's normal 5m capital programe eg PAS 8 CNST is inflated by STP assumptions for non-pay

167 2. HHCT assumptions Assumptions Plan Forecast Forecast Forecast Forecast Inflationary and growth factors Demographic increase 2.0% 2.0% 2.0% 2.0% 2.0% Tariff (deflator)/inflator 1.8% 0.1% -0.1% 0.0% 0.9% Other income 1.0% 1.0% 1.0% 1.0% 1.0% Pay & Pension inflation 3.3% 2.0% 1.6% 1.6% 2.9% Drug cost inflation 4.5% 2.8% 3.6% 4.2% 4.2% Other non-pay inflation (incl. PFI) 1.7% 1.8% 1.9% 2.1% 2.2% Income and expenditure account impact Cost improvement, savings and income CIPs S&T Funding Investments and other costs Penalties Operational Contingency day working CQUIN

168 Appendix 14 - Indicative Timeline to Transaction Approval (by 1 April 2017)

169 Appendix 15 Communications and Engagement Plan (DRAFT) 17 May 2016 Comms action plan phase 2 of PSHFT/HHCT collaboration work Introduction This communications plan charts the actions required to deliver phase 2 of the overall comms strategy. Phase 2 marks the point where the boards of Hinchingbrooke Health Care Trust (HHCT) and Peterborough and Stamford Hospitals NHS Foundation Trust (PSHFT) discuss the Outline Business Case in their individual public meetings to be held in May The plan charts the comms actions required to brief all stakeholders, which will be delivered jointly by the Chief Executives and Chairs at PSHFT and HHCT, with the support of their respective communications teams. This plan has been written ahead of any decisions made by both boards, so the Key Messages listed below may change to reflect this. Objectives To be open and transparent in our proposal to work more closely To give stakeholders the opportunity to contribute to the process as it develops To support our staff through any change processes To further develop stakeholder understanding of the clinical and other benefits of closer working and why service change is necessary Ensure communications are joined-up, consistent, credible, timely and well-coordinated Ensure we set up robust and effective and engagement systems in readiness for phase 3 (stakeholder engagement phase) Key Messages 1. Clinically stronger by working together 2. Organisationally stronger by working together 3. Financially stronger by starting to reduce back office costs 4. Our proposals do not include any changes to A&E nor maternity services at either hospital trust 66

170 Tactics Public board meetings on 23 May 2016 at Hinchingbrooke and 24 May 2016 at Peterborough Series of CEO Open Forums to staff across both organisations Co-ordinated stakeholder briefings via , telephone etc, plus briefings to specific groups (see action plan for how this will be delivered) Ask the CEO facility for all stakeholders to use Media interviews as appropriate Target audiences Staff in both organisations (including PFI service providers at both Trusts) Non Exec Directors in both organisations Governors and members at PSHFT Patients in both Trust catchments Volunteers in both Trusts Union Representatives across both Trust catchments MPs in both Trust catchments Health Scrutiny Committees across both Trust catchments Local authorities across both Trust catchments Cambs and Peterborough CCG colleagues/other healthcare provider colleagues and NHS England GPs in both Trust catchments Healthwatch Cambridgeshire and Healthwatch Peterborough Other patient representative groups across both catchments National and local media/health service media Regulators Communications methods Chairs/CEOs/Deputy CEOs attending face to face stakeholder briefings Dedicated intranet pages in both Trusts Updates on websites of both Trusts Targeted s Handouts/flyers/slide packs Internal Trust publications Team Brief (monthly) in both organisations GP publications Member/patient publications Press releases/statements Social media channels Action plan 67

171 Date Action Channel Who 8 Apr Joint board meeting between HHCT & PSHFT board members #2 13 Apr HHCT/PSHFT Collaborative Project Board - Hinchingbrooke 26 Apr PSHFT public board meeting - CEO to announce that the Outline Business Case is being discussed in public at May board meetings meeting - ü Meeting - ü Meeting - ü 26 Apr Staff message re Outline Business Case being discussed in public at May board meetings issued to staff at PSHFT and HHCT Briefing CEO/ Comms ü 27 Apr Hinchingbrooke board workshop Meeting - ü 28 Apr Team Brief at PSHFT includes staff message re Outline Business Case being discussed in public at May board meetings Briefing CEO/ Comms ü 29 Apr HHCT/PSHFT Collaborative Project Board - Peterborough 30 Apr March in Huntingdon to be led by MP Jonathan Djanogly in opposition of merger plan. Meeting - ü for info - ü 4 May Team Brief at HHCT reinforce message re Outline Business Case being discussed in public at May board meetings Briefing CEO/ Comms ü 5 May PSHFT joint board with Council of Governors update provided meeting CEO/ Execs ü 5 May END OF PURDAH FOR LOCAL GOV ELECTIONS for info only w/c 9 May CQC re-inspection visit to HHCT for info - ü w/c 15 May Draft to be created of messaging/other materials to be Prep Comms ü 68

172 used post board meeting re outcome 18 May Board meeting papers to be published on website of each Trust/press release issued See appendix 1 for how this will be delivered Comms 18 May Note: Lines to be agreed by both Trusts for use in any media interviews prior to the board meetings to ensure consistent messaging May HHCT public board meeting Meeting - 23 May Possible media interview requests - CEO to front any interview requests, co-ordinated by comms team (See appendix 1) Interview (See appendix 1) CEO/ Comms 24 May PSHFT public board meeting Meeting - (See appendix 1) 24 May Possible media interview requests - CEO to front any interview requests, co-ordinated by comms team Interview (See appendix 1) CEO/ Comms 24 and 25 May Stakeholder briefings to be issued post both board meetings to update key stakeholders on the next steps Briefingss (see appendix 1) CEO/ Comms 25 to 26 May Post-meeting CEO staff forums to be staged at both Trusts Meetings (See appendix 1) - 26 May Team brief at PSHFT use to reinforce messaging to staff Briefing (See Comms 69

173 appendix 1) 26 May HHCT board meeting May START OF PURDAH EU REFERENDUM for info only 31 May Planning for engagement programme to begin 1 June Team Brief session at HHCT use to reinforce messaging to staff - Comms Comms 23 June END OF PURDAH - EU REFERENDUM for info only 27 June Start of proposed 8-week engagement programme 28 July Annual Public Meeting at PSHFT provide update on progress Comms/ PMB team Comms/ Exec Team 70

174 Announcement to stakeholders re Outline Business Case being discussed in public board meetings in May 2016 The table below charts the methods by which we will communicate the outcome of the board decisions taken by HHCT and PSHFT at their meetings at the end of May Date/Time Action Comms channel used Who? 26 Apr Some stakeholders to be prebriefed re Outline Business Case being discussed in public in May board meetings 26 Apr Public board meeting at PSHFT - CEO to announce that the Outline Business Case is being discussed in public at May board meetings 26 Apr Message re Outline Business Case being discussed in public at May board meetings issued to staff at both Trusts 26 Apr Remainder of external stakeholder briefings to be completed, as required 28 Apr Team Brief at PSHFT - reminder re Outline Business Case being discussed in public at May board meetings Briefings under embargo to: MPs union reps scrutiny committees Healthwatch local and health media meeting Briefing Briefing Briefing CEO/Deputy CEO/Chair/ Comms team CEO/ Comms CEO/ Comms Date/Time Action Comms channel used Who? 71

175 16 May Pre-briefing issued to some stakeholders re board papers being made public 18 May, 9.30am Upload board meeting papers to website of both Trusts Briefings under embargo to: MPs union reps scrutiny committees Healthwatch local and health media website CEO/Deputy CEO/Chair/ Comms team Comms 18 May, 9.30am Message issued from CEOs to staff in both Trusts regarding board meeting dates and how they can obtain more information afterwards , intranet (Remind staff how they can raise any questions they may have) Comms Include on weekly / monthly briefing news agendas in each Trust From 18 May, 9.30am Briefing issued to: All local health and social care provider partner CEOs/Chairs in Cambridgeshire and border counties (and specifically our contacts in the STP) Healthwatch Cambs and Healthwatch Peterborough Health scrutiny committee chairs and members Volunteer groups at both Trusts Friends/charity groups linked to both Trusts Any patient group reps PSHFT members Call/ CEOs/Dep CEO/HR directors/ comms (need to agree who does what) 18 May, 9.30am Media embargo lifted Promote comms messaging online Website Facebook Twitter LinkedIn Comms team 72

176 NOTE: Decide whether we will engage in any interview requests, or keep to single statement only May Stage a succession of staff briefings throughout each Trust for staff to pose questions Interest highly likely from: Radio Local TV news Local newspapers Health media Face to face briefings Comms and CEOs/Dep CEO CEOs/Deputy CEOs/Chairs 23 May Hinchingbrooke Public Board Meeting Consider any media requests for cameras at the meeting Comms 23 May Prepare for possible media interview requests - Comms / CEOs 23 May CEO staff forum after board meeting Hand out updated FAQs / briefing sheet CEOs 23 May Update all information for staff and stakeholders regarding the outcome of the meeting Media Statement Trust intranet Trust website /verbal update to stakeholders CEOs/ Comms 24 May Peterborough and Stamford Public Board Meeting Consider any media requests for cameras at the meeting Comms 24 May Prepare for possible media interview requests - Comms / CEOs 24 May CEO staff forum after board meeting 24 May Update all information for staff and stakeholders regarding the outcome of the meeting Hand out updated FAQs / briefing sheet Media Statement Trust intranet Trust website /verbal update to stakeholders CEOs CEOs/ Comms 73

177 25 May CEO staff forums at both Trusts Hand out updated FAQs / briefing sheet 26 May CEO staff forums at both Trusts Hand out updated FAQs / briefing sheet CEOs/ Deputy CEOs CEOs/ Deputy CEOs 26 May Team Brief at PSHFT chance to reinforce msg to leadership team etc Briefing CEO/Deputy CEO 27 May CEO staff forums at both Trusts Hand out updated FAQs / briefing sheet CEOs/ Deputy CEOs 74

178 Appendix 16 Risk Rating matrix CONSEQUENCES/ SEVERITY LIKELIHOOD Impossible 0 Rare 1 Unlikely 2 Possible 3 Likely 4 Almost Certain 5 No adverse outcome - 0 Insignificant Minor - 2 Moderate - 3 Major- 4 Catastrophic KEY: No risk Low risk Moderate risk Significant risk High risk RATE LIKELIHOOD DESCRIPTION 0 Impossible The event cannot happen under any circumstances. 1 Rare The event may occur only in exceptional circumstances. 2 Unlikely The event could occur at some time. 3 Possible The event might occur or re-occur at some time. 4 Likely The event is likely to occur or re-occur in most circumstances. 5 Almost Certain The event is expected to occur or re-occur in most circumstances. RATE CONSEQUENCE DESCRIPTION 0 No adverse No injuries. No loss. outcome 1 Insignificant First-aid treatment (e.g. cuts, bruises, abrasions). Moderate financial loss. 2 Minor Short-term medical treatment required (sprains, strains, small burns, stitches etc.) Moderate environmental implications. High financial loss/ compensation claim. Moderate loss of reputation. Moderate service interruption. 3 Moderate Semi-permanent injury/damage (lasting up to 1 year), Over 3 Day staff injuries under RIDDOR, MDA reportable, short term sickness <4 weeks. Litigation possible but not certain 4 Major Excessive or permanent injuries (loss of body parts, mis-diagnosis poor progress etc.). (Major injuries under RIDDOR). Short term negative impact on recruitment and retention. High environmental implications. Serious financial loss. Serious loss of reputation. Serious service interruption. Litigation/Prosecution expected. 5 Catastrophic Death, Toxic off site release with detrimental effect, National adverse publicity, affects large numbers of people (i.e. cervical screening disaster) Litigation/Prosecution expected/certain. Medium to long term negative impact on recruitment and retention. Major financial loss. Major loss of reputation. Major service interruption. 75

179 Appendix 17 Current Project Risk Register to take us up to FBC decision Risk No. Risk description Risk Owner / Manager Initial Risk rating Last Month (Apr 16) Current Month (May 16) Review date Actions to mitigate risk Date of last update 007 Not enough of the right skilled resource is available to deliver to project milestones. Mrs Walker /06/16 External and internal resources paper presented to PMB Specification for external resource due 31 st may for approval. Organisations to identify individuals for back fill 11/05/ Delay to timescales caused by OBC decision not taken until public board in May 16 Mrs Walker /06/16 Project team to continue with FBC actions despite no formal decision taken to proceed. 11/05/ The two Boards do not agree to the same recommendation made in the OBC. The CMA rule against the Boards agreed recommendation. Mrs Walker /06/16 Mrs Walker /07/16 Hold an early board to board to manage expectations and agree a shared vision. Ensure updates are regular and detailed Ensure evidence for the options appraisal is robust Ensure all evidence, assumptions and finances are externally and independently assured Engage all regulators in supporting the recommended option of the OBC Ensure a clear clinical vision is shown in OBC External assurance on Option Appraisal process External assurance present during the Options Appraisal Preferred option discussed at Trust Board s in March 16 Engage fully in pre-notification discussions with CMA. Work in collaboration with Monitor competition expertise Agree patient benefit case with Monitor before submission 11/05/16 11/05/ Negative public opinion increases political influence Mrs Walker /05/16 Robust communications and stakeholder management plan, regularly reviewed at PMB Detailed plan following OBC approval Board decision to be taken in public so case for change can be made clearer 11/05/ Involving the CMA early in prenotification discussions could lead to a public perception of decision already made. Mrs Walker /05/16 Advice to be sought from previous Trusts as their approach. Clear PMB decision on when to start pre-notification as preferred options becomes clear. Robust communications plan following OBC approval 11/05/16 76

180 012 The OBC is not sufficiently robust or fit for purpose to support a preferred option Mrs Walker /05/16 External assurance report from PA and two early Board comments have steered the remaining fit for purpose actions. Continue to work with Monitor on confirming appropriate assurance for the OBC. Final version follows multiple improvement comments from both boards. 11/05/ Focus on performance and/or quality standards dip if staff become distracted by the rumours around the project if key posts are vacant too long or difficult to recruit in to due to uncertainty of organisation Mr McCarthy and Mr Graves /06/16 Regular staff briefings to keep staff updated and motivated Continuing Trust performance management frameworks 11/05/ Inconsistency of messaging to stakeholders undermines project objectives via a lack of common understanding Mrs Walker /05/16 Have one comms lead driving the plan on behalf of all organisations 11/05/ Back office management becomes too diluted at any site by temporary-post sharing and: Other key projects get delayed Morale of individuals suffers Mrs Walker /06/16 Execs to escalate concerns to CEO at each organisation. CEO s to discuss issues log every fortnight 11/05/ Public communications between HHCT/PSHFT collaboration and STP work becomes confusing and leads to public misunderstanding, negativity and loss of reputation of the collaboration being honest. OBC is not bold enough and/or is delayed by lack of ambition and commitment within organisations Mrs Walker n/a n/a 9 11/05/16 11/05/16 Mrs Walker /05/16 Positive leadership from CEO level within both organisations. Covering letters and agreed executive summary make the case for change stronger. Communications internally and externally support the case for change on clinical sustainability grounds 11/05/16 77

181 Board of Directors, 24 May 2016, Item Present Minutes of the Meeting of the Board of Directors Held on Wednesday 26 April 2016 at hours in the Boardroom, Peterborough City Hospital Mr Rob Hughes (Chair) Mr Allan Arnott Mr Ken Beeton Mrs Jo Bennis Mr Ian Crich Mr Neil Doverty Mrs Sarah Dunnett Mr Stephen Graves Mr Peter Oldfield Mr Gareth Tipton Miss Jane Pigg Chairman Senior Independent Director and Deputy Chairman Non-Executive Director Chief Nurse Director of Workforce and OD Chief Operating Officer Non-Executive Director Chief Executive Acting Finance Director Non-Executive Director Company Secretary In attendance Mrs Rebekah Pickles EA to the CEO and Chairman Item Mrs Sam Hunt Mrs Jane Rootham Mrs Zoe WiIkinson Lead Nurse for Children, Neonates & Safeguarding Ward Sister, Family & Public Health Play Specialist Coordinator Item Mr Keith Reynolds Assistant Director, Strategy and Planning Item (c) Ms Anita Jackson Director of CIP and Transformation Apologies for Absence and Declarations of Interest Apologies were received from Mrs Walker, Mr Brown, Dr Rege and Dr Davies. No declarations of interest were received. The Chairman underlined the fire safety procedures to be used in the event of a fire during the meeting. The declared register of interests for the Board of Directors was noted for information Children and Young People Presentation Mrs Hunt, Mrs Wilkinson and Mrs Rootham attended for this item Mrs Bennis introduced a presentation on children and young peoples services led by Mrs Hunt, Lead Nurse for Children, Neonates & Safeguarding, and accompanied by Mrs Rootham and Mrs Wilkinson. The presentation gave an overview of how play services are provided and funded in a Trustwide setting in order to promote a child friendly environment and alleviate fears and anxieties for children, young person and Page 1 of 11

182 Page 2 of 11 Board of Directors, 24 May 2016, Item their families wherever they are in the hospital. It was noted that 23,000 children were treated through A&E last year, placing pressures on many departments throughout the Trust to accommodate the needs of this group of patients. The establishment of child-friendly distraction equipment and toys had been made in the Women and Children Unit but also in other areas frequented by young patients such as Head and Neck, ED, Fracture Clinic, Diagnostic Imaging and at Stamford Hospital. Equipment included hand-held play and sensory devices and wall-mounted play graphics. Provision for adolescents had also been reviewed in the form of dvd players, and ipad chargers and docking stations. Mr Arnott asked about the science behind distraction therapy. This was clarified by Mrs Wilkinson as using a range of ideas from simple bubble-blowing for younger children to breathing techniques for older children and was successful in 90% of cases. Mrs Rootham emphasised that the voice of the child remained paramount in moving any project forward. In 2011, Amazon Ward had introduced a method of obtaining feedback from children (including and handwritten stories) in order to review their experiences and views; in addition, patient stories from adolescents were looked at for the sharing of experiences. Feedback was also used to discuss children s experiences of their illness and stay in hospital at the Children s Board and on an individual basis for solutions. Mr Tipton questioned how feedback was obtained from children who were uncomfortable with . Mrs Rootham clarified that play leaders from Children s Services spoke with children on a daily basis for feedback. Mr Hughes asked about charitable funding arrangements. Mrs Hunt explained that the service had been fortunate in receiving generous donations on an annual basis, such as proceeds from the very successful Amazon Ball. Funds were then used to focus on improvements to the child and parents experience. Play equipment was purchased via capital funding whilst the majority of toys were subsidised through charitable funds. Ms Hunt noted that the Emergency Department had set aside a budget for play therapy, a welcome move that she would like other directorates to follow. The Board thanked the team for their presentation. Mrs Hunt, Mrs Wilkinson and Mrs Rootham left the meeting Minutes of the last meeting held on 30 March 2016 The minutes of the last meeting were approved as a correct record Matters Arising and Action Tracker from Previous Meetings The action tracker was updated Chairman s Review of the Month The Chairman reported on a productive Members meeting held on 13 April in the ophthalmology department, whereby Members were encouraged to engage with consultants in regard to diagnostics. Guide

183 Dogs for the Blind charity representatives were also in attendance. Board of Directors, 24 May 2016, Item Mr Hughes noted that that the Trust continued to work with Hinchingbrooke Healthcare Trust (HHCT) as part of the local health system Sustainability and Transformation Programme (STP). It was noted that the Outline Business Case (OBC) would be discussed at the next Board meeting held in public on 24 May At the previous meeting, Mr Hughes had raised the issue of a proposed amendment to some of the Board meetings during the year to avoid the duplication of agendas. The Chairman confirmed that this matter had since been discussed and approved by the Council of Governors. Therefore, from July 2016, 4 sessions per year of Board meetings held in public would be replaced by Council of Governor meetings. Mr Hughes recorded his thanks, on behalf of the Board, to Mr Beeton for all his efforts for the Trust. He noted that Mr Beeton would be leaving the role of Non-Executive Director in mid-may after over 5 years in post Chief Executive s Report Mr Graves recapped on the background behind fire safety work needed to correct defects within the hospital s fire separation infrastructure, which had been in progress since mid-2015 and remained on target for completion by February This date had been given following on from survey work, due to the number of additional defects disclosed and the fact that remedial work is being carried out while the hospital continues to provide full service to its patients. Mr Graves informed the Board that the Trust had recently been served with a formal enforcement notice by Cambridgeshire Fire and Rescue Service to ensure the building was made safe within a practical timescale. Fire safety officers had been made available to ensure the risk of fire was reduced as far as possible whilst remedial work was completed. Mr Graves added to the Chairman s update (item 38.16) by confirming that OBC discussions would take place at the public sessions of this Trust Board and Hinchingbrooke Healthcare Trust s Board in May for approval. Ahead of these meetings, the document would be made available. The Board welcomed the news that the Trust had won the contract to provide additional renal dialysis stations as part of a procurement tender by University of Leicester Hospitals. The service (which should be operational by the end of the year) would provide extra capacity for patients currently travelling to Kettering. The new unit would be built on land adjacent to Peterborough City Hospital, with capital provided by the Trust s partners, Renal Service Limited. In addition, the Trust was working with Leicester to explore potential expansion of inpatient dialysis services at Peterborough City Hospital for a firm decision in the coming months. The next strike action period by junior doctors across the country had commenced on 26 April, through to 27 April. Mr Graves underlined that this would be the first time junior doctors would also not be covering shifts in the Emergency Department but confirmed the Trust s support of their right to strike. Staff rotas would be coordinated to provide cover across clinics, Page 3 of 11

184 Board of Directors, 24 May 2016, Item wards and ED. The Board noted, following approval last year for the new procedure rooms and the siting of MRI equipment at Stamford Hospital, the project had been delayed. The reason for this was that the Trust still awaited confirmation of its capital allocation for 2016/17 by NHSI, impacting on capital spending decisions above 250k, in particular redevelopment work planned for the east site in the outpatient s area. Smaller projects, such as the essential electrical work, had commenced to allow the hospital to continue to deliver current services in a safe manner Annual Plan Mr Reynolds attended for this item Mr Oldfield presented the Trust Annual Plan following the document reviewed by the Board in March and submitted in draft to NHS Improvement on 18 April Objectives had been discussed with Governors and shared widely within the organisation. It was noted that the Plan was supported by individual directorate and corporate team plans and would be circulated to key and placed on our Trust website. The Board noted that although all contracts with commissioners had been agreed; there remained a need to agree a finance control total with NHS Improvement to provide benefits such as sustainability and transformation funding ( 10.8m) and avoidance of operating penalties. Key objectives and deliverables for 2016/17 were set out. Objectives included the delivery of quality care standards; recruiting, developing and retaining the workforce; developing capacity and infrastructure; delivery of the finance plan; and delivery of the organisational strategy. The Plan s finances were reviewed by the Board. Mr Oldfield confirmed the year-end forecast outturn of 37.3m deficit with areas of bridging (due to inflationary factors) and assumptions in line with national metrics such as 2% CIP delivery and below the line costs such as PMO and restructuring. Key financial risks included 13m CIP delivery, Delayed Transfers of Care (DToCs), and service demand. Mrs Dunnett welcomed the comprehensive Plan but asked how the risk of DToCs and patient flow would be mitigated against during the year. Mr Doverty explained that the Trust continued to engage with stakeholders however, this was an unresolved critical issue for the organisation. The system had put together a composite recovery plan for DToCs, which remained off-track; therefore the Trust would be reviewing radical options due to the financial impacts. Following a question from Mr Tipton, Mr Crich underlined that the newly established Organisational Development Programme would be overseeing the detail for the first year OD objectives for Board approval. Mr Beeton pointed out that the Plan would be challenging to deliver due to the requirement for cash-releasing CIPs and the DToC challenges. He noted that additional capital requirements had been set out in the document Page 4 of 11

185 Board of Directors, 24 May 2016, Item and questioned whether over-performance by the Trust would provide the opportunity for monies to use towards these capital projects. Mr Oldfield noted that plans had been predicated on gaining capital funding and for projects to be tackled one by one. There could be the potential for slippage of monies into capital if the organisation over-performed but this could not be predicted. Mr Arnott asked for clarity on the degree of elective outsourcing and whether a clear plan had been put in place to eradicate outsourcing. Mr Doverty stated that a plan was being developed for this purpose and outsourcing activity had already been scaled back by 60% although certain sub-specialty work continued to be outsourced in order to control waiting lists. The Board approved the Annual Plan. Mr Oldfield Mr Reynolds left the meeting Performance Framework (a) Quality Report Mrs Bennis highlighted key points from her March report, which also set out overall targets for the year. These included an overall reduction in patient falls for 2015/16 of 11.5% compared to 2014/15 (188 fewer patient falls) and a 2.2% reduction for March 2016 compared to March An 80% reduction in patients with head injuries linked to anti-coagulation issues over the year was also noted. The number of serious head injuries sustained due to a fall had also reduced by 44.4%. The Board noted that 23 fewer grade 2 pressure ulcers had been reported in March 2016 compared to March 2015, a reduction of 82.1%. Following the catheter audit in March 2016, only 1 patient was reported to have a catheter in place and had sustained a CAUTI, which would be reviewed at the scrutiny panel following completion of the root cause analysis. At the end of March 2016, the Trust was under trajectory by 13 cases of Clostridium difficile to meet the ceiling target of 29 cases for 2015/16. The 2016/17 trajectory had been set at 29 cases. Mrs Bennis also reported that the hospital mortality rate for December 2015 was the second lowest for this financial year after July s relative risk. The Board noted that 91% of complaints had been responded to within 30 days in March and 100% of complaints received into the Trust had been acknowledged within 3 working days. The Trust welcomed the forecast of achievement on 2015/16 CQUINs with an overall achievement of 95% (broken down as national - 86%; CCG/Uniting Care - 99%; and NHSE - 100%). The Trust s nursing agency spend percentage stood at 8.9% in March. NHS Improvement had recently changed the proposed nursing agency spend percentage and stated that all-staff agency ceilings would replace the ceiling target from 1 April to cover agency and locum posts, based on the Trusts Page 5 of 11

186 Page 6 of 11 Board of Directors, 24 May 2016, Item agency expenditure, to apply a reduction to an annual version of this figure. The ceiling for 2016/17 was reported as 14,150k. Mrs Bennis provided an update on nurse recruitment in line with the Nursing and Midwifery Recruitment and Retention Strategy. Mrs Dunnett updated the Board on the Quality Assurance Committee (QAC) meeting on 25 April, in which the clinical audit and surveys forward plan for 2016/19 was reviewed. The meeting had also received the nursing and midwifery recruitment and retention strategy and action plan, which outlined innovative recruitment plans to lead the project. The Cancer and Diagnostics directorate had presented at the meeting and were preforming well. However concerns regarding their MRI capacity were highlighted in light of increasing demand and delayed capital approvals, and alternatives were being sought. She noted performance improvements throughout the year but highlighted the fragility of some ED indicators due to staffing challenges, which were being monitored daily. Mr Tipton welcomed the upward trend in statistics and KPIs, with management training and hand hygiene figures much improved. He questioned whether data correlated to issues such as C. difficile improvements. Mrs Bennis confirmed that although hand hygiene remained key to maintaining infection control it was only one of a host of infection control measures. Mr Beeton queried the Net Promoter below average score for maternity. Mrs Bennis explained that a combination of factors had been involved in this including a change of leadership in midwifery and the difficulty in this area in getting responses. However, the Trust had purchased an upgraded package recently for feedback that would allow responses to be made via to achieve more flexibility. Nurse Recruitment update This report was provided to the Board for information. Mr Graves commented that one of the key challenges for the Trust was in getting the English language tests up to the correct level to support the overseas nurse candidates for recruitment. (b) Operations Report Mr Doverty reported that 4-hour A&E performance had been put under extreme strain throughout the last month due to demand, and performance against RTT remained above the incomplete standard. Urgent care performance had further declined in-month, which remained a serious concern to the Trust. Mr Doverty reinforced continued efforts with system partners for effective engagement to reduce demand and enable early hospital discharge. Delayed transfers of care represented a key daily challenge to the Trust with the adverse impact on patient flow delaying the agreed recovery trajectory to deliver the 4-hour national standard. The Trust faced ongoing difficulties in filling all scheduled staff shifts in the Emergency Department therefore enhanced plans had been put in place to address staffing gaps via recruitment cycles. The Urgent Care and

187 Page 7 of 11 Board of Directors, 24 May 2016, Item Development Group had also been reinstated to address internal priorities such as a reform of medical rotas and forward planning improvements. Learning had also been distilled from the recent Breaking the Cycle event in an effort to improve patient pathways. Mr Doverty reported that one issue being looked into was to widen the scope of nurse practitioners to assist with the discharge potential. Mr Doverty noted that a systemwide update had been provided regarding the current status of the Urgent and Emergency Care Vanguard programme of development work taking place across Cambridgeshire, Huntingdon and Peterborough. The scheme had been designed to address patient demand and review changes in patient flow. Cambridgeshire and Peterborough CCG had announced funding to launch the 7 initial Vanguard priorities, including mental health crisis response; care home educators; social prescribing; integrated NHS 111 / GP out of hours; integrated care workers for JET / neighbourhood teams; falls prevention and a new case management dashboard. The Board welcomed the news that the Emergency Care Intensive Support Team (ECIST) team had agreed to return to the Trust to review internal performance actions and to understand system dependencies regarding patient flow. No date had been arranged as yet for the diagnostic visit. (c) Cost Improvement Plan (CIP) Report Ms Jackson attended for this item Ms Jackson set out progress made in the delivery of the 2015/16 Cost Improvement Plan (CIP) programme. The Board was encouraged at the report of year-end savings had achieved a total part year effect of 14.28m. The full year effect of 2015/16 CIPs was reported at 14.03m (88% of the 16m stretch target recurrent savings). The Board thanked Ms Jackson and her team for their work in achieving the CIP targets over the last year. The Board noted that the draft CIP 2016/17 programme had been submitted to the Cambridgeshire & Peterborough Health and Care System Transformation Programme on 21 December To date, 8.2m full year effect and 7.1m part year effect schemes had been identified in the 13m target however it was hoped that a visit to the pharmacy department by the Lord Carter Team tomorrow would assist with solutions to bridge the gap. Ms Jackson left the meeting (d) Finance Report M12 Mr Oldfield gave an overview on the overall financial position for 2015/16 at year-end. Mr Oldfield reported that the Trust had closed at year-end with performance 1.2m better than plan. All CCG contracts had been agreed and signed for 2016/17. The underlying deficit had been 1m worse than budget, which would inform the financial position for next year however this

188 remained a better position for the Trust from last year s trajectory. Board of Directors, 24 May 2016, Item The Trust revised plan showed a requirement of 39.3m cash funding in 2015/16. Revenue cash funding by the DoH to the Trust would be provided via 60% PDC and 40% revenue loan. A capital funding stream of 8.1m had been approved by DoH via a 1.49% loan. (e) Workforce and Organisational Development Report Mr Crich updated the Board on significant progress with doctor recruitment, which had included a successful recruitment day in early April with 7 offers made to Consultants for posts in Emergency and Acute Medicine. In addition, 12 international nurses joined the Trust at the beginning of April including the first three nurses from the Philippines recruitment drive. A local EU recruitment event in early April had led to offers made to 7 nurses to work in ED and acute medicine wards and a trip to India was planned for the end of May to recruiting nurses for theatres and ED. The Board again welcomed positive data at year-end on sickness absence (3.4%); turnover (11.48%); appraisals (90%) and mandatory training (92%). Mr Crich explained that the outcomes from the staff listening events had been linked into five Organisation Development Programme workstreams: improving patient care and experience, improving leadership, improving services, improving communication and engagement and improving values and behaviours. An update would be provided to the Board in May. Mr Crich Mrs Dunnett commented on the Health and Safety report contained within the Workforce report and asked how the red indicators (sharps injuries and malicious verbal abuse) could be improved. Mr Crich advised that sharps injuries were regularly reviewed at the Health and Safety Committee and the Infection Control Committee but would be reviewed with renewed vigour going forward. Verbal abuse incidents were looked at individually and for any trends. Staff were also provided with early access to physiotherapy and psychology services. Mrs Dunnett questioned what the Trust was doing to improve the health and wellbeing of its workforce. The Board noted that a Global Corporation Challenge (supported by the Staff Council) would be launched in the Trust in May. The initiative, which had been well received, aimed to encourage teams to walk 10,000 paces a day to encourage a healthier workforce. (f) Governance Report The Board noted performance against current indicators. Miss Pigg reported that although non-clinical policy performance had been reported as amber at year-end, a number of policies had recently been approved at Trust Management Board, which would increase the compliance figure to 85%. 22 Internal Audit (IA) reports had bene finalised in 2015/16 and were monitored through the Audit Committee. She noted two outstanding IA recommendations, which would be pursued by the Committee. Miss Pigg set out the Board Assurance Framework (BAF) against agreed objectives in the Trust s Annual Plan for 2015/16. For BAF measures Page 8 of 11

189 Board of Directors, 24 May 2016, Item marked red it was reported that the radiotherapy build had commenced, EDM was now live in all areas and work was ongoing to reduce Trust vacancies. Development of a BAF for 2016/17 was being finalised by the executive directors in April for presentation to the Board in May Miss Pigg The Board noted the arrangements for Board Committees. The Board reauthorised the use of the Trust seal, following approval on a deed of variation in December 2015, to reflect the revised parent guarantee for the medical equipment service provider. Revisions required by NHS Property Services had since been incorporated. Miss Pigg The Board reviewed declarations to NHS Improvement regarding financial, performance and governance requirements. Targets and Indicators Partial Compliance Performance was as stated in the Operations Report discussed at item (b), with A&E performance and 62 day cancer targets not delivered for this quarter. This provided an overall green rating, however the Trust s enforcement would be allowed for in ratings over this period therefore an overall red governance rating was expected. Governance Statement Partial Compliance Miss Pigg provided a proposed in-year governance statement regarding financial performance, plans for ongoing governance and performance, and exceptional reporting. It was proposed that for: Finance: the ability to maintain a financial sustainability risk rating of 3 over the next 12 months is not confirmed finance: capital expenditure for the remainder of the year to not materially differ from the amended forecast is confirmed governance: plans are in place to ensure ongoing compliance with existing targets going forward is not confirmed exception reporting: no additional exception reporting is to be made is confirmed Two statements had been made to accompany the declarations to clarify that the Trust was currently under enforcement on the development of a 5- year sustainability plan; and that A&E performance had not currently been met therefore further work was required across the health system to secure previous improvements. In addition, 62-day cancer waits had not been met due to increased demand and capacity constraints. The proposed declarations were approved by the Board. Miss Pigg Any Other Urgent Business No matters were raised Questions from the Floor Q A Public Governor asked how many junior doctors were working today during the strike. Page 9 of 11

190 Board of Directors, 24 May 2016, Item A Q A Q A Q A Q A Q A Q A Mr Graves confirmed that 43 junior doctors had made themselves available for work today from 142 who would usually be on duty on a non-strike day. These figures were being reported back to NHS England. A Public Governor asked whether members of the Boy Scouts / Girl Guides were linked into the Trust for voluntary work with Children s Services (as in some other hospitals). Mrs Bennis noted that this was not the case in this hospital however she would take this back to the team for any potential future work. A Public Governor commented on patient length of stay and asked if there was any correlation between this and the rise in emergency readmissions. Mr Doverty explained that the Trust was concerned about this issue and had conducted audits on emergency / non-emergency admission rates. Outcomes indicated that the hospital was admitting the right patients but one third of admissions could have been avoided if community out-of-hours services were better equipped. He stated that there was no apparent correlation however the increase in demand (by 20%) meant that the matter would be regularly revisited. A Public Governor asked whether DToCs were lined to LoS. Mr Doverty responded that the two matters were indeed linked and were currently having a dramatic effect, leading to bad patient experience and loss of income, hence the work to seek a resolution. A Public Governor asked what the key risks were to next year s financial plan. Mr Crich stated that the Trust s original standstill agreement with Progress Health for fire remedial work (funded by PH) was no longer valid due to the extent of defects uncovered, therefore legal costs had been factored into the finances going forward to achieve a commercial settlement A Public Governor noted that he had been encouraged by the strategic objectives and asked if the Trust was in the top quartile as measured by the CQC. Mr Hughes confirmed that the Trust stood in the top 18% of acute Trusts. A Public Governor asked when the Trust would see improvements in DToCs and whether it would be useful to use an interim milestone. Mr Doverty received the suggestion favourably. He noted that national policy provided a 2.5% metric for DToCs, which was a statutory responsibility of the System Resilience Group to achieve Page 10 of 11

191 Board of Directors, 24 May 2016, Item through their action plan. This had not delivered to date therefore the matter had been escalated as mentioned earlier in the meeting. A summit meeting had been arranged for 9 May and the outcome of this would be fedback to the Board. Q A Q A A Public Governor asked about the previous electricity supply problems. Mr Crich clarified that the last serious power outage at the Trsut had been in June PH had been asked to produce an independent report with HVS regarding the service, control and running of the Brookfield service. The report had been quite critical regarding the specification of the system in place and add-on changes made that had impacted to the complexity of maintaining the equipment. A detailed action plan had been carried out and the system had been deemed safe. Mr Crich confirmed his confidence that the response to any further power outage would be rapid to ensure fewer problems to patient care. An update would be given at the next Council of Governors meeting. A Public Governor asked about assumptions regarding DToCs and demand management in the system and any analysis regarding sensitivities impacting on the finances. Mr Oldfield explained that no analysis was in place however the Trust was working on a strategy to improve the situation, and capturing the variance to budget on a monthly basis. He pointed out that 1 DToC per day cost just over 1k. The impact for one month equated to 1.7m at the current rate. Mr Crich Date of Next Meeting The next meeting will be held at hours on Tuesday 24 May 2016, in the Boardroom, Peterborough City Hospital. Signed:.. Date:.. Page 11 of 11

192 Board of Directors Action Tracker as at 18 May 2016 Board of Directors, 24 Mat 2016, Item Date Item Issue Action taken Remitted to Lead Target Date Date Closed 23 Feb Seek external funding for PAS (e.g. ITFF) Mr Oldfield/ Mrs Walker 24 May 16 9 May Mar (a) Report to be reviewed regarding reducing length 30 Mar (b) Feedback from System Resilience Group regarding concerns about deliverability, leadership and capacity 30 Mar (b) Framework milestones for elective care transformation 30 Mar Publicity/articles re urgent care pressures and DNAs to raise awareness 26 Apr Chairman to speak separately to Amazon team regarding funding opportunities NB: To come back to Board when funding identified or finance risk crystallise. Linked to national discussions on capital availability To be discussed at Quality Assurance Committee Update provided verbally at meeting on 26 April 16; further update re ECIST input to be provided at May meeting First 4 key improvement milestones agreed initial focus to reduce outpatients DNA, reduce hospital cancellations, increase day surgery rates and increase MSK theatre productivity Urgent care messages made DNA messages to be done in tandem with publicity on successful changes Discussions initiated with Amazon team Finance & Investment Committee Quality Assurance Committee Mrs Bennis 24 May 16 9 May 16 Mr Doverty 24 May 16 Mr Doverty Mr Doverty/ Ms Ward Mr Hughes/ Mrs Hunt 24 May16 26 Apr Apr May May Apr (c) Plan for final full CIP programme Ms Jackson 28 Jun Apr (b) Review of report to show national In current performance report Mr Doverty 24 May May 16 indicators in 2016/17 year 26 April (d) Annual plan finance risk sensitivities to be included in future finance reports In current report Mr Oldfield 24 May May April (e) Update on OD Programme to May Board meeting Update to be provided under workforce item. Mr Crich 24 May May 16 Page 1 of 2

193 Board of Directors, 24 Mat 2016, Item Date Item Issue Action taken Remitted to Lead Target Date Date Closed 26 April (f) BAF process for 2016/17 to be Process included in Board Miss Pigg 24 May May 16 approved by the Board paper 26 Apr Update for Council of Governors on electrical supply Mr Crich 26 Jul 16 Shaded items: denote items completed at or since the last meeting Page 2 of 2

194 Chief Executive Officer s Report Presented for: Presented by: Scrutinised by: Discussion Stephen Graves, Chief Executive Trust Management Board Strategic objective: All Strategic Objectives Date: 12 May 2016 Regulatory relevance: NHS Constitution delivery Equality and Diversity Freedom of Information Release Monitor: Foundation Trust Governance (FT 4) None This report covers services and individuals equally and there are no specific equality and diversity issues for consideration This report can be released under the Freedom of Information Act 2000 National News Junior Dr Contract Dispute At the time of writing this report the talks to try and find a negotiated settlement had been extended by three days. From my perspective I very much hope there is a mutually agreed outcome. This would be great news for our future senior doctors and consultant workforce and most importantly great news for our patients. The potential alternative of a series of further strikes covering emergency care and for longer hours makes the delivery of care to our patients very difficult and in time could become untenable. This is because consultants will have to provide emergency care and will not be available to see elective patients who have or will be diagnosed with major problems including cancer. I will update the Board with any further news at the meeting. Local News Sustainability and Transformation Plan The Local Health Economy work continues and is on track to deliver the Sustainability and Transformation Plan on time at the end of June.

195 Urgent Care Attendances at our Emergency Department at PCH continue to be higher than the levels we normally expect at this time of the year. Colleagues at our neighbouring hospitals have also reported similar peaks in urgent care demand. On 4 May, directly after the May Bank Holiday, we declared a Critical Internal Incident for 24 hours due to a severe lack of available beds. This situation arose due to the arrival of a high number of emergency patients combined with an unprecedented number of patients who were medically fit to leave hospital but required additional community support, which was not yet available. Additional information on the way we are managing our urgent care issues within the hospital will be highlighted in the Chief Operating Officer s report. I and, I am sure, the whole Board would like to thank our staff for the way they have and continue to ensure that they do the very best they can for our patients despite the pressures they have been under this year. Radiotherapy expansion The radiotherapy department at Peterborough City Hospital was built and resourced based upon evidence that the Trust would need to deliver 7,000 treatments a year. Once in operation, the demand for this service was greater than anticipated. In the first year of operation in 2011/12, 13,000 treatments were delivered. The department has been running to full capacity ever since. It has been estimated that this year the number of treatments required could grow to more than 16,000. As a result, in 2013 a business case was approved to build two new bunkers onsite and purchase one additional linear accelerator machine. This provides the possibility for expansion to a fourth machine if required, and if not, the additional bunker space can be used to decant machines one and two when they need replacing. I am delighted to say that the expansion work is on track to be operational early 2017 and recruitment is ongoing to staff the additional machine. New Trust website The Trust has developed a new website to improve the information it makes available to patients and the public. The new site is easier to navigate and reflects our modern, vibrant organisation. It has been developed with input from staff and patient groups to ensure our communications through the site are in keeping with what our web users would expect. We have looked extensively at other hospital websites for examples of best practice to ensure our site is as user-friendly as possible. Our communications team would love to hear feedback on the website, so please forward them any comments via communications@pbh-tr.nhs.uk Improvement in environment for patients with dementia I would like to thank our service provider partner Brookfield Services for their support in improving the environments in wards A9, B14 and some cubicles in the Emergency Department. This work, which includes painting the walls in more homely colours, using traditional crockery and fitting curtains that are non hospital-issue, are all designed to help patients with dementia feel more relaxed and at home while they are in hospital. Evidence shows that hospitals are frightening places for patients with dementia which can exacerbate their condition. These decorative improvements will hopefully make a real difference to the patient experience.

196 Staff achievements Congratulations to Kay Bannister, Staff Nurse at Stamford Hospital, who helped celebrate the centenary of the Royal College of Nursing (RCN) by attending the Royal Garden Party at Buckingham Palace on 19 May. The event is hosted by the Queen as a way of recognising outstanding public service. Kay has been a nurse for over 30 years and an RCN representative for the last three. During her career, she has worked in many hospitals around the UK and covered many specialities such as orthopaedics, adult medicine, adolescent oncology and is now based in the Greenwood day surgery unit. Events this month International Day of the Midwife: I was pleased to see our midwives hosting a stand in our Main Atrium at Peterborough City Hospital on 5 May, to celebrate the role midwives play in bringing new lives into the world. In 2015/16 our midwives delivered more than 5,000 babies and provided a save, proactive and quality service to support mothers in their choices for where and how their babies are born. International Nurses Day: Nursing staff from across the Trust celebrated International Nurses Day on 12 May by promoting their profession and raising funds at the same time. Our Practice Development Nursing Team raised funds to support future staff events by staging a cake sale. Nurses at Stamford Hospital raised money for the Friends of Chernobyl s Children charity by hosting a nearly-new sale from items donated by colleagues and members of the public. The Executive Team showed their appreciation for the role that all nurses play in providing quality patient care by visiting the wards and presenting a thank you certificate. The Board of Directors is asked to note and discuss the contents of this report. Stephen Graves Chief Executive 16 May 2016

197 Board of Directors, 24 May 2016, Item (a) Quality Report Presented for: Presented by: Strategic objective: Discussion Jo Bennis, Chief Nurse Deliver quality of care standards Recruiting, developing and retaining our workforce Date: 13 May 2016 Regulatory relevance: NHS Constitution delivery Equality and Diversity Freedom of Information Release CQC Fundamental Standards: Person-centred care (Regulation 9) CQC Fundamental Standards: Safe care and treatment (Regulation 12) Patients and Public: All requirements This report covers services and individuals equally and there are no specific equality and diversity issues for consideration This report can be released under the Freedom of information Act Executive Summary The report summarises performance in April 2016 across the three quality domains (safety, effectiveness and patient experience), CQUINs and Research and Development and provides an update on regulatory activities. Key Points for Decision and Discussion This is the first month reporting of financial year 2016/17. The format of the report is aligned to the objectives within the Board Assurance Framework and Care Quality Directorate objectives. A quality dashboard of RAG rated thresholds has been developed for each objective and measure. CREWS This is a ward accreditation scheme aligned to the 5 key lines of enquiry from the Care Quality Commission (CQC). Trials have taken place on 3 wards to date and a review meeting has been held to review the documentation used and the process around which the inspections will take place. Amendments are being made and a roll out plan is being agreed to commence in July Documentation Overall Trust compliance for documentation is 95.7% against a target of 90%. VTE Page 1 of 37

198 VTE compliance was 95.7% for April. Good news story PSHFT is one of the first Trusts in the region to pilot patient research ambassadors. The idea is to recruit members of the public to work on a voluntary basis to promote research at Trusts to reach a wider audience. One of the ambassadors highlighted that an advert for research and development could be printed on the back of every visitor parking ticket and this has been implemented. Action required from the Board of Directors Board members are asked to raise any questions regarding the content of the report, especially focussing on the areas highlighted in the summary. The following papers make up this report Quality Report Appendix One: Nursing and Midwifery Staffing Levels Report Appendix Two: Complaints Key Performance Indicators Appendix Three: Family and Friends Test data March 2016 Appendix Four: Call bell response report J Bennis Chief Nurse Page 2 of 37

199 CREWS 1.1 Priority for 2016/17: To develop the CREWS ward accreditation scheme to assess / monitor wards aligned to the CQC domains Aims for the year include: 1. Develop criteria for ward based accreditation scheme CREWS (by A July 2016) 2. Trial concept on identified wards G 3. Roll out across the Trust and RAG rate all inpatient areas (according to N/A roll out plan) The CREWS initiative is a ward accreditation scheme which has been aligned to the 5 key lines of enquiry from the Care Quality Commission (CQC) which are Caring, Responsive, Effective, Well-led and Safe. The scheme will consist of a series of planned mini-cqc inspections, which will result in every ward receiving a RAG rating of either outstanding (having achieved CREWS status), good, requires improvement or inadequate. Areas will be reassessed in accordance with their RAG rating, as follows: Outstanding reassessment after 12 months Good reassessment after 6 months Requires improvement reassessment after 4 months Inadequate reassessment after 2 months Trials have taken place on 3 wards to date and a review meeting has been held to review documentation used and the process around which the inspections will take place. Amendments are being made and a rollout plan is being agreed to commence in July Patient Safety NHS Safety Thermometer The NHS Safety Thermometer is a monthly survey on one day only, to collect data from inpatients on four harms i.e. pressure ulcers, falls (within the last 72 hours), urinary tract infection in patients with indwelling urinary catheters (within the preceding 72 hours) and Venous Thromboembolism (VTE). The aim nationally is to deliver 95% harm free care across the whole health economy. A separate report has been circulated to the Board with details of data collected by ward and Clinical Directorate. This has also been added, as a standing agenda item, to the Quality Assurance Committee for scrutiny and challenge. Any exception reporting will be included within this report, for example increased falls with harm or avoidable Grade 3 pressure ulcers Priority for 2016/17: Documentation Compliance Aims for the year include: 1. 90% compliance with documentation audit by all Directorates G Documenting patient s assessments and nursing care is an integral part of the work that nurses and midwives undertake on a day to day basis. However, as the acuity and dependancy of our patients increases, the workload becomes such that nursing staff attend to their physical care and leave documentation until later. This on occasions leads to poor record keeping which can then cause poor or mis-communication. The Code (NMC, 2015) states that nurses should identify any risks or problems that have arisen and the steps taken to deal with them, so that colleagues who use the records have all the information Page 3 of 37

200 they need. Poor documentation can also create difficulties when something goes wrong or there is a complaint as it is then difficult to give assurance and evidence of the care given. This financial year the Ward Managers, Matrons and the Patient Safety Team will be working to improve completion of the large amount of documentation required for each patient. The individual documents and compliance will be reviewed to make completion meaningful to patient care delivery but user freindly. Compliance with documentation is recorded on the Matrons Balanced Score Card and will be reported per Directorate and as a Trust wide percentage each month. Graph 1 below shows overall Trust compliance for April Graph 2 shows Directorate compliance. Graph 1 Trustwide compliance 100% 99% 98% 97% 96% 95% 94% 96.5% Documentation Audit Graph 2 Directorate compliance Priority for 2016/17: Safe Discharge Aims for the year include: 1. Q1 - agree measure with Matrons / Ward Managers re: discharge checklist and N/A monitoring (quarterly reporting) 2. Q2 - benchmark to define level of improvement in Q3 and Q4 (quarterly reporting) N/A 3. Q3 - to be confirmed in Q2 (quarterly reporting) N/A 4. Q4 - to be confirmed in Q2 (quarterly reporting) N/A 5. Monitor details of Datix and Complaints from outside agencies during Q1 to N/A benchmark improvements by year end (annual reporting) Page 4 of 37

201 Discharge planning should involve the clinical staff and patient/family to develop a patientcentred plan. Critical elements in successful discharge transitions include performing an accurate reconciliation of medications, establishing timely follow up required and developing a detailed discharge summary that is communicated to the patient and any aftercare providers. With elective care, discharge planning should start before admission, this is more of a challenge for emergency patients, however, this should commence on admission. This improves the patient experience but good planning enables Safe Discharge A reduction in length of stay Discharge from hospital can only happen when a clinician has decided the person is medically fit for discharge. However, this does not mean that the person is now well or has no medical conditions. In addition we must be satisfied that discharge would be safe which means that there is an appropriate care and support plan in place. This is the final part of the care delivery given to our patients. The increasing capacity pressures and increased bed occupancy within the organisation can cause clinical teams to rush the discharge and not offer the patient a safe discharge. This can lead to patients being discharged without the correct information or their complete prescription of medicines they are taking home. Working with the Discharge Nurses, Ward Managers and Matrons the aim is to improve the processes currently in place for example, check lists and reeducation to enable nursing staff to complete the discharge process on time but safely. Throughout the year complaints, and Datix referring to poor or unsafe discharge will be reviewed via a proforma then discussed at the Discharge Operational Group. This group will also support the roll out of the e-learning package and Criteria Led Practitioner Discharge within the Trust Priority for 2016/17: MUST / Nutrition Aims for the year include: 1. Achieve 95% completed MUST assessments within 24 hours of G admission % of completed assessments with MUST components accurately A calculated % of completed assessments with correct MUST care plan in place A Malnutrition is present in 10-40% of patients who are admitted to secondary care (Elia, 2003). Malnutrition is often unrecognised and untreated in hospitals, in both inpatients and outpatients. The Malnutrition Universal Screening Tool (MUST) was introduced in 2009 in Peterborough and Stamford Hospitals NHS Foundation Trust (PSHFT). MUST includes care plans for patients identified at risk and alternative measures for those adults who cannot have their weight or height measured. MUST is supported by the British Association for Parenteral and Enteral Nutrition (BAPEN), Royal College of Nursing (RCN) and British Dietetic Association (BDA). Effective use of nutritional supplements and an accurate care plan can reduce clinical complications by up to 70% and mortality by 40%. Implementing correct care plans will decrease inappropriate dietitian referrals and ensure their time is spent effectively. Page 5 of 37

202 Although MUST compliance in April has not reached the targets set for accurately completed assessments and implementation of correct care plans, compliance has increased compared to 2015/16 figures, when only 55% of all MUST components were accurately calculated, and 44% of patients had a correct MUST care plan in place. Dietitians are supporting the Matrons and Ward Managers when MUST Audit data is being collected, so that areas of poor practice can be identified and addressed with targeted training programmes offered at individual ward level Priority for 2016/17: E-observations Aims for the year include: 1. Roll out through the Trust of the e-observation programme (according to plan) (quarterly reporting) N/A E Observations have been developed as a process for the early detection of the deteriorating patient. The pilot wards A4, A9 and Haem/onc were successful in going live. There was a programme of continuous training for all clinical staff set up during Q4 in 2015/16. During 2016/17 the full investment in the system will be progressed as a roll out plan across the Trust. Phase 2 roll out dates Ward B11 (Stroke) Ward B12 (Respiratory) Ward B14 (Medicine for the Elderly) Ward A10 (Gastroenterology) Ward A8 (Renal & Endocrinology) Ward B1 (Isolation) A15-24 Hour Stay Ward A3 (Short stay - Medical ward) Ward B6 (General Medicine) Cardiac Unit (Inpatients)/CCU 12-Apr 19-Apr 03-May 10-May 17-May 24-May 31-May 07-Jun Page 6 of 37

203 Ward A2 (Head & Neck & Urology) Ward B5 (Trauma) Ward B7 (Orthopaedic) Women s Health Ward Amazon (inc Jungle) MAU John Van Geest Unit 14-Jun 21-Jun 28-Jun 05-Jul 12-Jul 26-Jul tbc Venous thromboembolism (VTE) A venous thromboembolism (VTE) describes the blocking of a vessel by a blood clot. The term includes a deep vein thrombosis (DVT) usually in the leg or a pulmonary embolus (PE) when the clot goes to the lungs. There are two parts to the prevention of blood clots in hospital: a risk assessment of bleeding and clotting factors and the prescribing and administering of blood thinning medicines (thromboprophylaxis) if necessary. The proportion of patients who are assessed is monitored monthly and the target compliance nationally is for 95% of patients to be assessed. The average results for 2014/15 and 2015/16 are seen below with monthly reports for 2016/17: Monthly Totals April 2016 by Clinical Directorate Month 2015/16 Patients risk assessed for VTE Directorate Number of Admissions Number of Assessments Compliance with target Average 2014/ % Surgery % Average 2015/ % April 95.7% Cancer Diagnostics and Clinical Services Family and Public Health Emergency & Medicine % % % Trust Wide % 1.3 Healthcare associated infection MRSA bacteraemia There were no hospital acquired cases of MRSA bacteraemia in April 2016.There was a review of data collection for MRSA screening, which was applied to the April data collection. The changes are as follows: Elective screens will now count for 4 weeks (previously 15 weeks) prior to admission and for 2 days after. Emergency screens will count from 2 days prior to admission to 2 days after (previously 5). An admission will now count from 23 hours onwards, as per elective screening. Page 7 of 37

204 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Elective 91.3% Emergency 91.8% Clostridium difficile There were 3 hospital acquired cases of C diff in April, against a trajectory of 2. Two have been reviewed at scrutiny panel and were not sanctioned as no lapses in care were identified. However there were some learning points around risk assessment and documentation. The IPCT will be covering risk assessment later in the year as part of their back to basics campaign. The third case is awaiting scrutiny panel review. Table to show Clostridium difficile infections reported by month and the outcome from the Scrutiny Panel review of each in relation to their sanctioned or nonsanctioned status 2015/16 Month April May June July Aug Sep Oct Nov Dec Jan Feb Mar Total Local trajectory to annual objective (29) (4) (7) (9) (11) (14) (16) (18) (21) (23) (26) (29) 29 Infections reported (all cases) 3 3 Sanctioned cases (lapses in care) 1 awaiting review Non sanctioned cases (no lapses in care) Outbreaks There were no outbreaks to report in April Progress of increased cleaning standards and deep clean programme The introduction of the 2011 PAS standards of cleaning continues, with wards on the new regime consistently achieving the 95% standard or above. The second phase of the implementation plan is currently being agreed. Exit cleans will be reviewed as part of the next stage of implementation. The rolling UV deep clean programme continues and is on schedule. Effectiveness 2.1 Priority for 2016/17: Upper quartile HSMR for all trusts nationally Aims for the year include: 1. Consultant led review of at least 50% of all hospital deaths (quarterly reporting) N/A 2. Respond to Dr Foster alerts within 45 days of them being raised (quarterly reporting) N/A Dr Foster Intelligence provides three metrics for benchmarking Trust performance in relation to mortality against statistical expectation calculated from national datasets: Hospital Standardised Mortality Ratio (HSMR) is the relative risk of in-hospital mortality for patients admitted within the 56 diagnosis groups that account for 80% of in-hospital deaths. Page 8 of 37

205 Standardised Mortality Ratio (SMR) is the relative risk of in-hospital mortality for all patients. Summary Hospital-Level Mortality Indicator (SHMI) is the relative risk of mortality both in-hospital and within 30 days of discharge. Consultant led review of at least 50% of all hospital deaths refers to Trustwide and the 50% refers to annual, year end. The Quarterly results will look at the cumulative (month on month) picture. This is also monitored through the Hospital Mortality Review Group. Improve response rates to Dr Foster mortality alerts. This refers to the % completed (or assessed as not required) as reported to the Quality Governance Operational Committee and Hospital Mortality Review Group. The Quarterly results will look at the cumulative (month on month) picture. The HSMR and SMR data update includes discharges up to and including January There have been no updates of the SHMI data since the last report (for the period of July 2014 to June 2016). Last 12 month February 2015 to January /16 Financial year April 2015 to January HSMR SMR Procedure group Deaths after surgery (PSI) Deaths in low risk diagnosis groups (PSI) Current available data period (July 2014 to June 2015) Previous Financial year (July 2013 to June 2014) 6. SHMI HSMR / SMR Data (February 2015 January 2016) There have been no statistically significant alerts for HSMR. There was one new statistically significant alert for SMR which related to varicose veins of lower extremity and one alert on the diagnosis chapter for congenital malformation. The HSMR monthly trend over the last 3 financial years shows better than expected relative risk. The recent increase correlates with the increase in crude mortality for the month of January 2016, which were mainly respiratory related cases. Page 9 of 37

206 The following table demonstrates the top 3 highest difference for HSMR in January 2016: The HSMR rate for the Trust is in the third best position when compared to its peer group of similar size district general hospitals. The Trusts SMR by the day of admission shows better than expected relative risk for weekdays (87.47) and for weekends (82.67). Page 10 of 37

207 There have been no statistically significant alerts in the procedure chapter but the following 6 procedures seem to have higher than expected risk during the weekdays, as demonstrated in the following table. The Patient Safety Indicator for Death in low-risk diagnosis groups (LRDG) is showing a downward trend and there were no new alerts. Overall relative risk variance for the top diagnosis groups shows a reduction (an improvement) of points. 2.2 Priority for 2016/17: Maintain safe staffing levels with reduced reliance on agency and locum cover Aims for the year include: 1. 85% of adult inpatient wards have a minimum 90% registered nurse fill G rate on days and nights 2. Paediatric inpatient areas have a minimum 90% registered fill rate per G month 3. Implement Healthroster SafeCare Live module (in accordance with roll G out plan) 4. 70% retention of nursing students commissioned through Health N/A Education East of England (HEEoE) (bi-annual reporting) Aim 1 has achieved a green RAG rating. 91% of our adult inpatient wards have a minimum 90% registered nurse fill rate on days and nights (20 out of 22 wards). Details are within the monthly staffing paper (Appendix One). Aim 2 has achieved a green RAG rating. Aim 3 has achieved a green RAG rating and a roll out plan is on track as planned. Aim 4 does not currently have a RAG rating. There are two intakes of student nurses per reporting year: September and March. The % that will be reported reflects student nurses retained of that months intake i.e. September 2016 = March 2013 cohort and March 2017 = March 2014 cohort Agency cap and spend Monitor and the NHS Trust Development Authority (TDA) jointly launched a set of rules for nurse agency spending on the 1st September This was followed by an updated paper in November 2015 for all professional groups of staff. Both Monitor and the TDA recognised that, used appropriately, agencies can play an important role in meeting unforeseen peaks in demand and ensuring patient safety. The new rules set: Page 11 of 37

208 An annual ceiling for total nursing agency spend for each trust; Stipulate the mandatory use of approved frameworks where appropriate for procuring agency staff; Set cap rates to be paid for each professional group. For each Trust an annual limit for agency nursing expenditure as a percentage of total nursing staff spend was set. On 1 st April 2016 there was a further reduction of price caps to assist with tackling agency costs and support staff back into substantive and bank roles. This significantly reduced maximum rates for doctors, nurses and all other clinical staff. NHS Improvement (NHSI) released a letter on the 17 th March 2016 which changed the proposed nursing agency spend percentage for April 1 st 2016 of 10% and stated that allstaff agency ceilings will replace the nursing agency ceiling target from the 1 st April and covers all agency and locum posts. The ceilings are based on trusts reported agency expenditure in M1-M9 2015/16 and apply a reduction to an annualised version of this figure. The original ceiling allocated to the Trust was challenged and has now been confirmed as below. The ceiling for the organisation for 2016/17 is 14,150,000. These ceilings are maximum levels and Trusts have to continue to adhere to the price caps and use approved frameworks to drive reduction in agency expenditure. Budget has been allocated to Directorates based on run rate spend for the prior year. The total allocated to Directorates is within the cap noted above. Directorates will be held to account on agency spend, on a monthly basis, in the normal way. Price caps as a percentage above basic substantive hourly rates (from 1 st April 2016) Max. charge from 23 Nov 2015 Max. charge from 1 Feb 2016 Max. charge from 1 Apr 2016 Junior doctors 150% above basic 100% above basic 55% above basic Other medical staff 100% above basic 75% above basic 55% above basic All other clinical 100% above basic 75% above basic 55% above basic staff Non-clinical staff 55% above basic Overrides of the price caps and frameworks (where applicable) are only permitted in exceptional circumstances, specifically for patient safety reasons. These have to be reported to Monitor (NHSI) on a weekly basis. Data submitted for April to Monitor (NHSI) Numbers of shifts Staff Group Control Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Nursing, Midwifery and Price cap and off Health Visiting framework Nursing, Midwifery and Price cap only Health Visiting Medical and Dental Price cap and off Page 12 of 37

209 Medical and Dental framework Price cap only Medical and Dental Framework only Scientific, Therapeutic & Price cap and off Technical (AHPs) framework Scientific, Therapeutic & Price cap Technical (AHPs Administration and Estates Price cap and off framework Administration and Estates Framework only Administration and Estates Price cap The table below details the number of shifts requested, number that are filled by bank, by agency and the number of shifts that have not been filled for the month of April. Type of Worker Total shifts requested Total shifts filled by bank Total shifts filled by agency Total shifts not filled % fill rate RM % RN/RCN % TP % TOTAL % 2.3 Priority for 2016/17: Increase involvement in clinical trials Aims for the year include: 1. Year on year increase in the number of patients in clinical trials by 10% (quarterly reporting) N/A Revised Research and Development (R&D) Structure Following consultation a Band 7 research nurse has been appointed to manage the Research nurses within Family and Public Health and the Surgical Directorates effective from 9 th May This position aligns line management of the research nurse team within R&D Department under the R&D Business Partner. Following implementation of national changes which have seen the responsibility for governance and legal compliance of research pass to the HRA (Health Research Authority) a new R&D Steering Committee has been established, to more effectively support the revised function NHS trusts have in confirming capability and capacity. New Research Finance Structure Research income and expenditure is now largely contained within dedicated Research budgets. This is to facilitate the reporting of income and expenditure and to facilitate its reinvestment back into Trust research. From Q1, R&D income generation will be reported within the Quality reports. In addition, following approval from the Trust Management Board on 24 th March, a proportion of commercial R&D income will be pooled for trust-wide reinvestment into R&D. Targets Page 13 of 37

210 Year on year increase in the number of patients in clinical trials by 10%. Recruitment is highly variable month-on-month therefore performance against this objective will be commented upon in the Q1 report. Once sufficient data is available recruitment will be monitored against specialty targets within this report. Year Recruitment of patients to NIHR Portfolio trials Trust Target Network Target 2012/ No target set No target set 2013/ No target set No target set 2014/ No target set 2015/ No target set 2016/2017 (to 30 th April) Comparison of 2015/2016 recruitment across Clinical Research Network: Eastern Year on year increase in the number of commercial clinical trials established Year Number of commercial trials set up Target 2013/ No target set 2014/ No target set 2015/ /2017 (to 30 th April) 3 12 Page 14 of 37

211 Patient Experience 3.1 Priority for 2016/17: Improve responsiveness to complaints Aims for the year include: 1. Increase the response rate to a minimum of 90% of complaints being responded to within the 30 day timescale or agreed timeframe with complainant 2. Ensure that all complainants (100%) receive an acknowledgement letter within 3 days of receipt of the complaint 3. 80% of complainants extremely satisfied or satisfied with their complaint response (quarterly reporting) G G N/A Complaints Percentage Responded to within 30 days Complaints Response Times Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar We achieved 90% of complaints that were responded to within 30 days compared to 100% the previous month and 100% of complaints received into the Trust were acknowledged within 3 working days. The more detailed complaints report including Parliamentary and Health Service Ombudsman (PHSO) is now attached at appendix PALS There were a total number of 1,225 contacts made to PALS during April accolades were received by the department. Information giving enquiries Telephone / letter / 192 PALS Front Desk 925 Total 1,117 Page 15 of 37

212 Enquiries per Directorate Cancer, Diagnostics and Clinical Services 15 Care Quality Directorate 13 Corporate Services 2 Emergency and Medicine 29 Surgery, MSK, Theatres, Anaesthetics & Critical Care 45 Family and Public Health 4 TOTAL 108 Top 6 Enquiry Subjects Number of cases Capacity Issues 14 Information/Advice Request 11 Patient Pathway Issues 10 Cancellation - Outpatient 9 Wait for Test Results 8 Staff Attitude Adverse event reporting Apr'16 Total report incidents 1149 Patient related only reported incidents 998 Top reported incidents during month Community acquired pressure ulcer/moisture lesions present or 184 developed within 72 hours of admission Patient falls 65 Below is a graph to show a comparison of patient related only incidents reported during 2015 up to April Page 16 of 37

213 3.2 Priority for 2016/17: National Patient Survey Aims for the year include: 1. Increase the responses to questions in the inpatient National Patient Survey (NPS) in the best performing category (annual reporting) N/A The Inpatient National Patient Survey is currently being undertaken so no data is currently available. The results have been embargoed until 31 st May The way FFT recommended scores are being reported changed in December 2015 meaning they will not be published monthly by NHS England. They are now reported 2 months in arrears. The latest data available for March 2016 is attached at appendix three. 4. Call bell response times report Please see attached paper - appendix four for the monthly report on Call Bell responses. Review and assurance is gained through the Matrons Quality Assurance Committee. 5. Regulators and Commissioner There were no visits undertaken during April Good news stories Peterborough and Stamford Hospitals NHS Foundation Trust is one of the first Trusts in the region to pilot patient research ambassadors (PRA s). The idea behind this is to recruit members of the public to work on a voluntary basis to promote research at Trusts to reach a wider audience. One of our PRA s noticed that every time they visited hospital for treatment they would take a parking ticket and that the empty space on the back of the parking ticket was a possible way to advertise research. As such the Trust arranged for an advert for research and development to be printed onto the back of every visitor parking ticket. A very positive response has been received so far via the Trusts Twitter page and have been successful in generating responses from the public to the R&D mailbox. Page 17 of 37

214 Appendix One: Nursing and Midwifery Staffing Levels Report Appendix Two: Complaints Key Performance Indicators Appendix Three: Family and Friends Test data March 2016 Appendix Four: Call bell response report Page 18 of 37

215 Appendix One Presented for: Presented by: Strategic objective: Discussion Jo Bennis Chief Nurse Recruiting, developing and retaining our workforce Date: 11 May 2016 Regulatory relevance: CQC Fundamental Standards: Safe care and treatment (Regulation 12) CQC Fundamental Standards: Staffing (Regulation 18) NHS Constitution delivery: Patients and Public: Quality of Care and Environment Overview Ensuring Appropriate Staffing Levels and Skill Mix Monthly Report on Nursing and Midwifery Staffing Levels This report provides data for April 2016 in line with the nationally set requirements for monitoring staffing levels as detailed within the recommendations set out by the National Quality Board (NQB, 2013) and NICE (2014). It discusses the impact on key quality and outcome measures for in patient areas. It covers requirements for monthly reporting. Key Points for Decision and Discussion The following key points are requested for discussion: 1 Data presentation for April 2016 staffing levels 2 Overseas nurses recruitment The following papers make up this report: 1 Monthly report on nursing and midwifery staffing levels 2 Appendix 1: Nurse sensitive indicators table 3 Appendix 2: UNIFY submission. Detailed data for each inpatient ward area is available on the Trust internet site on the staffing levels page. Paper prepared by: Ivan Graham, Assistant Director of Nursing (Effectiveness) Page 19 of 37

216 Executive Summary This report provides data for April 2016 in line with the nationally set requirements for monitoring staffing levels as detailed in the recommendations set out by the National Quality Board (NQB, 2013) and NICE (2014). The Trust staffing levels RAG rating is reviewed in each ward at a minimum of once per shift and the ratings are managed initially within each Clinical Directorate, then across the Trust if escalation is required. The report discusses the impact on key quality and outcome measures for inpatient areas and a set of key performance indicators (nurse sensitive indicators) is detailed in Appendix 1, if any areas have highlighted staffing issues. The clinical areas that had a registered nurse fill rate of less than 90% for either days or nights on the UNIFY upload were: B5 (trauma orthopaedics) at 89.9% and B14 (medicine for older people) at 87.7%. Percentage fill rates for registered and unregistered staff on days and nights for the month of April 2016 are detailed in Appendix 2. Combined fill rates for both hospital sites are detailed in Table 1 below. Table 1: Combined fill rates for both hospital sites Site Day Night Average fill rate registered nurses / midwives (%) Average fill rate care staff (%) Average fill rate registered nurses / midwives (%) Average fill rate care staff (%) Peterborough City Hospital Stamford and Rutland Hospital Mar Apr Mar Apr Mar Apr Mar Apr Definition of appropriate staffing levels and RAG ratings Each in-patient ward area displays a whiteboard to show the appropriate staffing levels determined for the area and the number of staff on duty each day (planned versus actual). This increases the transparency for staff and visitors around staffing levels planned and those available for patient care delivery. The Trust staffing levels RAG rating is reviewed in each ward at a minimum of once per shift and the ratings are managed initially within each Directorate, then across the Trust if escalation is required. The RAG rating can be explained as follows: Green - Appropriate staffing levels. Amber - Requires a clinical risk assessment. Red - Requires escalation. Where it is not possible to manage amber or red staffing levels within the Directorate or across the Trust, the use of temporary staff should be considered in the following way: Page 20 of 37

217 Use of Flexible Staffing Service (FSS) resource (either ward staff working additional shifts in the grade of shift required, or FSS only staff). Use of staff senior to grade of shift required via FSS paid at their substantive grade. Use of agency staff. Where concerns remain, the relevant Ward Manager should escalate their concerns through the line management structure within the Directorate initially, or to the corporate nursing team if required. Presentation of data Detailed data of April 2016 monthly fill rates for registered and unregistered staff for day and night shifts for each ward was uploaded to UNIFY on the 6 th May 2016 and the information submitted is displayed in Appendix 2. This information is then published on NHS Choices. This overarching data on NHS Choices links to the data displayed on the Trust internet site detailing each wards individual monthly shift data and RAG ratings Staffing level gaps identified Expectation 7 (NQB, 2013) details the need for openness and transparency for patients and public. There is a requirement that this report outlines areas where the Trust has identified gaps in staffing levels and to consider the impact of these. A set of key performance indicators (nurse sensitive indicators) is detailed in Appendix 1. The criteria used to identify the clinical areas that are highlighted within the monthly report are identified by the UNIFY submission, as having a registered nurse fill rate of less than 90% for either days or nights. The adult clinical areas that raised some concerns around staffing levels for April 2016 were: B5 (trauma orthopaedics) at 89.9% and B14 (medicine for older people) at 87.7%. Where staffing levels have been below appropriate levels, the escalation process has been utilised and Flexible Staffing and Agency have been used to cover the shifts and Ward Managers have stepped in to work clinically. On analysis of the UNIFY submission (Appendix 2), there are other clinical areas that are showing fill rates for registered nurses or midwives below 90% but have not been detailed within the report for the following reasons: Maternity reporting looks at each individual inpatient area for this speciality and fill rates vary. The maternity unit as a whole moves staff around the individual areas to ensure that the women and their babies are safely cared for depending on demand. Page 21 of 37

218 Table 2: Ward areas alerting by monthly UNIFY submission Month Ward Areas Directorate April B11 Emergency and Medicine 2015 May B11 Emergency and Medicine June No ward areas 1 July No ward areas 1 August No ward areas 1 September No ward areas 1 October No ward areas 1 November No ward areas 2 December B5 B14 January No ward areas 1 Surgery and MSK Emergency and Medicine February March April A9 B5 A9 B14 B5 B5 B14 Emergency and Medicine Surgery and MSK Emergency and Medicine Surgery and MSK Surgery and MSK Emergency and Medicine Vacancy levels vary across wards and departments. There is a continued central drive to recruit and during the April recruitment drive we offered 38 positions to nursing staff across all bands (10 more than in March) and 16 (15.80 WTE) new nurses commenced employment in the month of April (3.60 WTE more than in March). In the month of April there were 6 WTE registered nurse leavers (5.25 WTE more than in March). Detailed analysis of reasons for staff leaving is being undertaken through the Human Resources team. Overseas nurses The first cohort arrived on the 16 th June The most recent cohort into practice was cohort 10 on 12 th April This consisted of 8 nurses from Europe (Croatia x4; Greece x1; Czech Republic x1; Spain x1 and Italy x1). 3 nurses from the Philippines have also recently started in practice. Up to and including cohort 10, this is 136 overseas nurses recruited. The Trust are continuing to use a Clinical Psychologist to interview and meet with the overseas nurses to capture their experiences, support their transition to the NHS and England and learn lessons to share. The majority of nurses report feeling supported by staff 1 With the exception of some Maternity and Paediatric areas as explained above 2 With the exception of some Paediatric areas as explained above Page 22 of 37

219 and the hospital, are feeling settled in their clinical areas and are getting used to the English culture and way of life. We continue to have a good retention rate for our overseas nurses. The Nursing Times recently reported that NHS Trusts in England were losing 28% of their overseas recruits within two years (Royal College of Nursing, 2015). Of the 136 overseas nurses we have recruited (up to cohort 10), 32 (23.5%) have left the Trust. Table 3: Reasons for leaving the Trust Reason Number Homesick 9 Personal reasons / health problems / family health problems 5 Returned home for work / career change 6 Other hospital (London x3; Liverpool x1) 4 Capability 3 Other care home / agency 2 Returned home because issues obtaining a pin number 2 Relocated because of partners job didn t want to leave trust 1 Table 4: Home countries of overseas nurses that have left the Trust Country Number recruited Total leavers % (of the total recruited) Italy % Spain % Romania % Portugal % Greece % Poland % Czech Republic % Cyprus % Croatia Philippines Total In addition to the 136 nurses above, we will continue to see further arrivals from the Philippines, with nurses arriving into the Trust through May. Their start dates are visa dependant. Progress with nurses recruited from the Philippines continues to be slow. The IELTS (International English Language Testing System) process is lengthy. Cohort 11 is due to start induction on the 4 th July although we employed 10 nurses from Europe (Poland x3, Greece x2 and Portugal x5) only 8 can commence induction at this time due to current notice periods/maternity leave. It is also hoped that we will have 3 more nurses from the Philippines (in addition to those mentioned above) starting in the Trust by the end of May. Further recruitment is also planned during May with an overseas recruitment visit to India. Page 23 of 37

220 Next steps 1 Continue current staff recruitment and retention efforts. 2 Continue with the roll out the SafeCare-Live (HealthRoster) module from Allocate. Phase one was successfully concluded on 30 th March 2016 (A9, B6, B11 and B14). Phase two commenced week commencing 11 th April and involves three further wards in Medicine (A3, A8 and B1). Phase three commenced 25 th April 2016 (Medicine B12 and A10). Phase four will focus on John Van Geest at Stamford Hospital starting during May. 3 NICE (2014) red flag indicators are being introduced as part of the SafeCare-Live (HealthRoster) roll out. References National Quality Board (2013) How to ensure the right people, with the right skills, are in the right place at the right time: A guide to nursing, midwifery and care staffing capacity and capability. NICE Guidance (2014) Safe Staffing for Nursing in Adult Inpatient wards in Acute Hospitals. Royal College of Nursing (2015) International Recruitment Page 24 of 37

221 Appendix 1 - Nurse Sensitive Indicators Ward area B5 B14 Mar Apr Mar Apr Vacancy factor (Registered Nurse WTE) 1 WTE 1 WTE 3 WTE 3 WTE Sickness (Registered Nurse Head Count) Infection rates Number of MRSA Bacteraemia No of C Diff Infections No of C Diff Infections - AVOIDABLE Pressure ulcers Number of pressure ulcers hospital acquired Grade 2 (UNAVOIDABLE) Number of pressure ulcers hospital acquired Grade 2 (AVOIDABLE) Number of pressure ulcers hospital acquired Grade 3 (AVOIDABLE) Number of pressure ulcers hospital acquired Grade 3 (UNAVOIDABLE) Number of pressure ulcers hospital acquired awaiting review and grading at scrutiny panel 0.00% 2.33% 5.23% 8.64% Ward area B5 B14 Mar Apr Mar Apr Falls Total number of falls Recurrent falls (on that ward in that month) Total number of falls where serious harm has occurred (i.e. Grade 3-5) Complaints re: 7 2 x patients fell 2 times x patient fell 2 times nursing care PALS concerns Datix re: staffing levels FFT % Recommended Score FFT response rate (Footfall) Call bell total patient calls Call bell - % responses <= 5 mins Call bell max response time (mins) UNIFY upload Registered nurse fill rate days / nights (%) UNIFY upload Unregistered nurse fill rate days / nights (%) 100% 93.1% 93.3% 100% 12.8% 31.2% 35.7% 36.8% % 82% 74% 76% %/ 96% 97.9%/ 100% 89.9%/ 97.5% 98.6%/ 98% 88.6%/ 100% 94.8%/ 95.2% %/ 100% 95.5%/ 100%

222 Appendix 2 Unify Submission Fill rate indicator return Org: RGN Peterborough And Stamford Hospitals NHS Foundation Trust Staffing: Nursing, midwifery and care staff Period: April_ Please provide the URL to the page on your trust website where your staffing information is available (Please can you ensure that the URL you attach to the spreadsheet is correct and links to the correct web page and include ' in your URL) Comments 0 Only complete sites your organisation is accountable for Day Night Day Night Validation alerts (see control panel) Site code *The Site code is automatically populated when a Site name is selected Hospital Site name Specialty 1 Specialty 2 Total monthly Total monthly planned staff actual staff hours hours Haematology / Oncology CLINICAL 2 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward ONCOLOGY MEDICAL ONCOLOGY % 100.0% 95.6% 115.4% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward A UROLOGY % 97.9% 94.2% 98.5% RGN80 RGN80 RGN80 RGN80 Hospital Site Details PETERBOROUGH CITY HOSPITAL - RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward name Total monthly planned staff hours Total monthly actual staff hours Total monthly planned staff hours Total monthly actual staff hours Total monthly planned staff hours Total monthly actual staff hours Ward A GENERAL MEDICINE % 100.0% 97.8% 98.4% Ward A GENERAL SURGERY % 99.1% 98.3% 98.5% Ward B5 Ward B TRAUMA & ORTHOPAEDICS TRAUMA & ORTHOPAEDICS Main 2 Specialties on each ward Registered midwives/nurses Registered midwives/nurses % 98.6% 97.5% 98.0% % 95.8% 95.6% 100.0% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward A GENERAL SURGERY % 100.0% 100.0% 96.7% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward A NEPHROLOGY GENERAL MEDICINE % 97.9% 100.0% 100.0% GERIATRIC RGN80 Ward A9 0 PETERBOROUGH CITY HOSPITAL - RGN80 MEDICINE GENERAL MEDICINE % 95.6% 98.9% 99.0% RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward A10 GASTROENTEROLOGY GENERAL MEDICINE % 95.2% 97.8% 97.9% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward B6 307-DIABETIC MEDICINE GENERAL MEDICINE % 97.5% 97.8% 100.0% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward B GERIATRIC MEDICINE GENERAL MEDICINE % 95.5% 100.0% 100.0% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward B STROKE MEDICINE GENERAL MEDICINE % 98.8% 98.0% 100.0% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward B RESPIRATORY MEDICINE GENERAL MEDICINE % 90.8% 98.3% 100.0% 2 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Ward B INFECTIOUS DISEASES % 99.2% 100.0% 100.0% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Cardiac Ward CARDIOLOGY % 96.2% 97.5% 98.1% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Coronary Care Unit CARDIOLOGY % 100.0% 100.0% 100.0% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Medical Assessment Unit GENERAL MEDICINE % 87.3% 98.8% 98.5% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Women's Health Ward GYNAECOLOGY GENERAL MEDICINE % 100.0% 100.0% 96.7% 2 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Amazon Ward PAEDIATRICS PAEDIATRIC SURGERY % 102.0% 99.8% 102.7% 0 RGN49 STAMFORD AND RUTLAND HOSPITAL - RG John Van Geest Unit REHABILITATION GERIATRIC MEDICINE % 90.5% 100.0% 100.0% 2 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 MLBU OBSTETRICS % % - 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Maternity Inpatients OBSTETRICS % 97.8% 100.0% 80.0% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Delivery Suite OBSTETRICS % 100.0% 96.7% 96.7% 0 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 Transitional Care OBSTETRICS % 92.5% 100.0% 100.0% 2 RGN80 PETERBOROUGH CITY HOSPITAL - RGN80 NICU OBSTETRICS PAEDIATRICS % 80.0% 106.0% 78.3% CRITICAL CARE RGN80 Critical Care Unit 0 PETERBOROUGH CITY HOSPITAL - RGN80 MEDICINE % 85.0% 100.0% 53.3% Care Staff Care Staff Average fill rate - registered nurses/midwiv es (%) Average fill rate - care staff (%) Average fill rate - registered nurses/midwiv es (%) Average fill rate - care staff (%) Page 26 of 37

223 Appendix Two Complaints Received Complaints KPI Report April 2016 April May 16 June 16 July 16 Aug 16 Sept 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 March Number of complaints received Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar complaints were registered during April This represents a decrease from the 40 complaints registered in March Risk Rating when registered Month No adverse outcome Insignificant Minor Moderate Major April Risk Rating when registered 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar No adverse outcome 1 - Insignificant actual 2 - Minor actual 3 - Moderate actual 4 - Major actual

224 The Complaints Manager risk rates all complaints received. This is carried out on receipt of the complaint and then amended according to the results of the investigation. Risk assessing a complaint ensures that the subsequent handling and any associated investigation are proportionate to the impact of the complaint and the related risks. The severity of the grading will determine where the complaint is escalated to, for example, a complaint graded as 4 or 5 (red/high risk) is forwarded to the Clinical Risk department for consideration of serious incident status. The risk rating is determined as follows: Category Description No adverse No impact or risk to provision of care. Unsatisfactory service user outcome experience not directly related to care. Insignificant Minimal impact and relative minimal risk to the provision of care or the service. Unsatisfactory service user experience related to care, usually single resolvable issue. No real risk of litigation. Minor Potential to impact on service provision/delivery. Service user outcome / experience below reasonable expectation in several areas but not causing lasting detriment. Slight potential for litigation. Moderate Significant issues of standards, quality of care, or denial of rights. Complaints with clear quality assurance or risk management implications or issues causing lasting detriment that require investigation. Possibility of litigation and adverse local media publicity. Major Issues regarding serious adverse events, long-term damage, grossly substandard care, professional misconduct or death that require investigation. Serious safety issues. Probability of litigation high and strong possibility of adverse national media publicity. In April 2 complaints was referred to the Clinical Risk department for review as at the time of registration both deemed high risk. These were discussed at the SI meeting and were deemed to be SIs. PHSO (Ombudsman) and SI referrals Month Ombudsman contact following complainant referral Referred back from Ombudsman for further investigation Referred to Risk Management April Risk Management accepted as SI In April the Trust were notified by the Ombudsman of the following: 2 complaints after investigation outcome were not upheld. 2 complaints have been referred back from the PHSO for further investigation. Two complaints were reviewed at the SI meeting and declared as SIs. Page 28 of 37

225 Categories of complaints Theme Subtype - April 2016 Total Q.3 Discharge arrangements 7 C.3 Communication-Medical 6 Q.1 Clinical care-medical 5 A.1 Access to NHS Services 3 Q.12 Diagnosis 3 W.4 Cancellation-outpatient 3 Q.2 Clinical care-nursing 3 C.5 Communication-General 2 A.3 Equality 1 A.6 Translation & Interpreting 1 W.6 Waiting time in ward/dept 1 C.8 Information/advice request 1 E.10 Lost property 1 W.3 Waiting list-outpatient Themes Access to services Behaviours Communication Environment Quality of Care Waiting Times The top complaint categories for April 2016 were Discharge Arrangements, Communication Medical and Clinical Medical. Discharge Arrangements have increased from last month from 2 complaints to 7 this month. Out of the 7 complaints relating to Discharge Arrangement. 6 of these relate to Emergency and Medicine and 1 to Surgery and MSK. Out of the 6 complaints relating to Communication Medical 2 of these relate to Emergency and Medicine, 2 Cancer, Diagnostics & Surgery, MSK, Theatres, Anaesthetics & Critical Care Page 29 of 37

226 and 2 to Surgery and MSK. There was no discernible trend in relation to what was being complained about as they were all varying issues. 5 complaints have been received this month relating to Clinical Care Medical out of the 5 complaints relating to Clinical Care Medical 4 of these relate to Emergency and Medicine, 1to Family and Public Health Directorate. Response Times Month Acknowledgment sent within 3 working days April % 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Acknowledgement sent within 3 working days 100% of complaints were acknowledged within 3 working days. Month Reply sent within 30 days Reply sent within timescale (agreed extension to 40 days) April % 100% Page 30 of 37

227 Reply sent within 30 days Reply sent within agreed timescale 100% 98% 96% 94% 92% 90% 88% 86% 90% of complaints were responded to within the agreed timescale of 30 days. For 4 complaints a ten day extension was requested and agreed by the complainant therefore increasing the number of complaints responded to within the agreed timescale to 100%. Complaint outcomes Month April 2016 Upheld Partially Upheld Not Upheld Outcomes Upheld Partially Upheld Not Upheld Complaints at the point of response are classified as having an outcome of not upheld, partially upheld or upheld. The criterion for each is as follows: Page 31 of 37

228 Upheld: If a complaint is received which relates to one specific issue, and substantive evidence is found to support the complaint, then the complaint should be recorded as upheld. Not upheld: Where there is no evidence to support any aspects of a complaint made, the complaint should be recorded as not upheld. Partially upheld: Where a complaint is made about several issues, if one or more of these, but not all, are upheld then the complaint should be recorded as partially upheld. Month Complaints re-opened April Complaints re-opened In April 14 complaints were reopened, 3 as a result of a meeting request, 11 seeking further information. To ensure that the complainant is completely satisfied with the outcome of our investigations all complainants are offer a meeting in our response letters. This provides an opportunity for complainants and staff to discuss outcomes/learnings from the complaint and any outstanding further concerns. Page 32 of 37

229 Appendix Three Month on Month FFT comparison Key: = highest quartile of comparison group = lowest quartile of comparison group Sept 14 onwards % recommending Trust Inpatient Asterisk * = direction of travel in relation to overall England Average Score (Net Promoter score April August 2014) = Less than five responses to protect possible risk of disclosure Trust Jan 15 Feb Mar Apr15 May15 Jun15 Jul15 Aug15 Sept15 Oct15 Nov15 Dec15 Jan16 Feb16 Mar England Average Score Peterborough and Stamford 95 Countess of Chester Aintree Airedale Sherwood Forest Hinchingbrooke Queen Elizabeth Kings Lynn Mid Essex Kettering Northampton United Lincolnshire Ashford and St Peters Poole The England average inpatient percentage recommendation score was 96% and the Trust scored 97%.

230 Emergency Department Net Promoter Score / % recommended Trust Jan 15 Feb Mar Apr15 May15 Jun15 Jul15 Aug15 Sept15 Oct15 Nov15 Dec15 Jan16 Feb16 Mar England Average Score Peterborough and Stamford Countess of Chester Aintree Airedale Sherwood Forest Hinchingbrooke Queen Elizabeth Kings Lynn Mid Essex Kettering Northampton United Lincolnshire Ashford and St Peters Poole The Trust scored 89% for percentage recommended which places it 5% above the national average. Page 34 of 37

231 Maternity - Net Promoter Score / % recommended Q1 = Antenatal Setting Q2 = Birth Setting Q3 = Postnatal Ward Setting Q4 = Postnatal Community Setting * = If an organisation or sub-unit has less than five responses, data is suppressed with an * to protect against possible risk of disclosure Trust Jan 15 Feb 15 Mar 15 Apr15 May15 Jun15 July15 Aug15 Sept15 Oct15 Nov15 Dec15 Jan16 Feb16 Mar16 England Average Score Peterborough and Stamford Countess of Chester Q Q Q Q Q1 100á 97á 96á 98á 98á 96à * 93â Q2 97 à 96â 97á 93â 99á 96â 94 â 95â Q3 85 â 82â 75â 74â 73â 83â 82 â 77â Q4 * 100á 95â 100á 100á 100á * 97â Q1 * 93 * 100 * 100 N/A N/A Q * N/A 100 N/A N/A Q * N/A Q4 * * N/A * N/A 100 N/A N/A Aintree Q Q Q Q Airedale Q Q Q Q Sherwood Forest Q Q Q Q Hinchingbrooke Q1 * 57 * * * Q Q Q Page 35 of 37

232 Queen Elizabeth Kings Lynn Q Q Q Q Mid Essex Q1 100 * * N/a * N/a 100 * Q Q Q4 N/A N/A N/A N/A N/A N/A N/A N/A Kettering Q Q Q Q Northampton Q Q Q Q United Lincolnshire Ashford and St Peters Q Q Q Q Q1 100 * 100 * * 94 N/A N/A Q Q N/A N/a * * Q4 83 * N/A N/A N/A 98 * N/A Poole Q Q Q Q Page 36 of 37

233 Appendix Four

234 Board of Directors, 24 May 2016, Item (f) Operations Report Presented for: Presented by: Discussion Neil Doverty, Chief Operating Officer Strategic objective: Date: 24 May 2016 Regulatory relevance: NHS Constitution delivery Equality and Diversity Freedom of Information Release 1.0 Summary Develop our capacity and infrastructure Deliver the organisational strategy Monitor: Foundation Trust Governance (FT 4) Patients and Public: All Requirements This report covers services and individuals equally and there are no specific equality and diversity issues for consideration This report can be released under the Freedom of information Act 2000 This report summarises performance in April 2016 across the key operational performance indicators and provides an update on actions being take to sustain or improve upon Trust and system-wide performance metrics. 1.1 Board Assurance Framework Context Across operational services, the contribution to achievement of Trust Board strategic objectives as set out in the FY16/17 Annual Plan are listed below; each strategic objective has a current risk description and management action / intervention card in place. Deliver quality of care standards Stroke standards VTE NHS Improvement / Monitor Compliance Framework Develop our capacity & infrastructure Complete actions in Urgent Care Development Plan Implement Elective Care Transformation Plan FY16/17 priorities Bed capacity management / plan achieved Deliver the financial plan Deliver 13m cost improvements, with focus on reducing agency cost Page 1 of 12

235 Board of Directors, 24 May 2016, Item (f) 1.2 Key Points for Decision and Discussion The Board of Directors is asked to note the following key points for discussion:- Delivery of Urgent Care 4hr performance under extreme strain Performance against RTT remains above the incomplete standard Achievement of the Access standard and all but one of the CWT standards Action required from the Board of Directors 1. Urgent Care performance remains adverse to plan and off improvement trajectory. Additional measures are being applied to strengthen the Trust s recovery plan, although risks to achievement of the 4hr standard are also presenting challenges 2. Delayed transfers of care remain a key risk factor to the 4hr delivery and SRG system partners have indicated achievement of the national stretch target will not be seen until Q3 FY16/17 3. Despite loss of some elective activity in month owing to industrial action, Trust performance across elective surgical services indicates steady improvement 2.0 Regulatory Relevance Categories 2.1 Monitor licence conditions / NHS Constitution access standards Monitor Licence: Foundation Trust Governance (FT4) Achieve the standards in the Monitor Compliance Framework. The table below shows April 2016 position against the Monitor Compliance Framework. Indicator Performance Cancer 2 week wait 96.9% Cancer 62 days 83.2% Cancer - 31 days 100% Subsequent Treatment 31 days 100% RTT Incomplete 93.5% A&E 4 Hour 76.1% Trust A&E performance against the 4hr national standard has seen a weak marginal improvement on March s performance; moving from 75.4% in March to 76.1% in April. This is hugely disappointing, but needs to be seen in the wider context of very poor regional and national performance on the 4hr standard: NHS Midlands & East region delivered 79.5% (Type 1) with just 5 out of 41 Acute Trusts achieving the national standard. NHS England national performance for March % (Type 1), widely reported to be the worst performance for well over a decade. Only 9 Acute Trusts across the whole country achieved the 4hr standard during March 2016, which is the latest monitoring period. The Trust performance on Cancer 62 day wait for first treatment has failed again in April 2016 but there has been an improvement moving from 75.7% to 83.2%. This deterioration continues to be linked to growth in demand combined with capacity constraints in specialist diagnostic support services. A detailed trust wide action plan has been developed and is being monitored through the cancer internal performance structure. Page 2 of 12

236 Board of Directors, 24 May 2016, Item (f) All other national reporting KPIs were successfully met by the Trust in April England failed the RTT Incomplete standard in March 2016 potentially 51% of all Acute Trusts in England will fail the Incomplete standard before September Performance Monitor Risk Assess. Framework Perf. Rating Q1 April June 2016 Amber Q2 July Sept 2016 Q3 October Dec 2016 Q4 Jan March Collaborative Work within Local Peterborough System Resilience Group (SRG) Each local health and social care statutory community is required to work together to support effective delivery of emergency and urgent care services. The SRG comprises the main NHS and social care organisations working across Peterborough & Borderline and South Lincolnshire catchment areas tasked to plan and deliver a sustained turnaround in the A&E 4 hour performance across the Peterborough system. During April 2016, the SRG partners met weekly and also held many tele-conference calls. Set out below are the key result areas designated by the SRG to be work priorities: 2.3 System Urgent Care Recovery The Trust continues to co-ordinate interagency improvement work on revising the SRG s Urgent Care Development Plan in light of the renewed focus being given to 4hr performance and actions demanded to reinforce the changes made to the Trust s urgent care pathway during SRG partners shifted the emphasis on demand management activities outside of hospital and the need to better reflect community-hospital interface working in the new version of the action plan. To illustrate this point, in the new plan there is now a greater focus on NHS 111, GP out of hours care, admission avoidance schemes and local community care service provision. Hospital-centred performance improvement activities are now managed in the re-convened weekly internal monitoring group, chaired weekly by the COO. Specific activities during April 2016 are reported at section 3.5 of this report. Each week the SRG focused on the poor performance on the 4hr standard by reviewing our urgent care scorecard and determining specific recovery and development actions should be taken. The Trust has presented the new Urgent Care Development Plan back to the SRG and identified our concerns regarding outstanding actions from statutory partners; and we have highlighted where we think further service improvement must be taken forward by other organisations if we are to regain the sustainable delivery of the 4hr national standard. 2.4 Hospital Ambulance Liaison Officers SRG partners reviewed the business case proposed by East of England Ambulance Service, following the removal of the short-term funding of the 3 x HALO roles at Peterborough City Hospital. The Trust has been highly supportive of these roles from inception and worked closely with the individuals and EoEAS to optimise the gains from introducing the role to the PCH site. Despite best efforts, we have yet to win approval from commissioning bodies to secure full funding for the HALO posts, although no final decision has been taken by the SRG. The Trust continues to lobby in support of the role and is maintaining close joint working with both Ambulance Services as we adjust to the loss. Page 3 of 12

237 Board of Directors, 24 May 2016, Item (f) 2.5 Delayed Transfers of Care In February the SRG completed work on a new composite multi-agency action plan to reduce the total number of DTOCs to just 13 or less and submitted this to NHS England. The Trust was keen to support the new DTOC reduction action plan but as reported over the last 2 months we have still yet to see any gains from the new action plan (see chart below). This is a major concern to the Trust, given the importance of keeping DTOCs to an absolute minimum at Peterborough & Stamford Hospitals NHSFT, since we have negligible extra-capacity beds available for emergency demand surges. The April DTOC rate worsened sharply to 9.6% (March was 6.8%), but this deterioration is in common with England wide where we are aware that the latest national DTOC rate continues to remain at the very highest levels for several years. The Trust continues to question local agencies on the practical actions they are taking to reduce the DTOC level and support our patients with onward care and treatment in a more homely environment. 1,800 1,600 1,400 Number of Delayed Bed Days 1,200 1, Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Total Number of Delayed Bed Days at PSHFT by Local Authority PETERBOROUGH UA CAMBRIDGESHIRE LINCOLNSHIRE Total Bed Days Delayed RUTLAND UA 2.6 Preparation in advance of Junior Doctor industrial action SRG partners worked closely with the Trust to make sure we had very robust and comprehensive service plans in place ahead of the Junior Doctor industrial action. Because of the length of the stoppage and impact on emergency hospital services, enhanced arrangements were set in place to ensure our patients remained safe and experienced minimal disruption. As a result, the Trust managed the period very effectively, be it that a range of specialties suffered cancellation of outpatient and elective surgical activity. 2.7 Joint Emergency Team service performance SRG members remain concerned about the ongoing under-performance of the JET service, despite previous attempts to reform the access criteria and promote the use of the admission avoidance service to all local GPs and to the EoEAS paramedic crews. During Page 4 of 12

238 Board of Directors, 24 May 2016, Item (f) the month the Trust met with the new management team from the JET and agreed how the service could best be further developed. The Trust is keen to remain fully supportive of the JET and we will continue to take every opportunity to optimise productivity, including within the Emergency Department, Medical Assessment Unit and ACU. 2.8 Designation process concerning Emergency Departments During recent weeks, the Trust has participated in a formal review process to determine how we comply with the new national standards governing Emergency Services, Urgent Care Centres and MIIUs. This is an important milestone in shaping the future acute service configuration arrangements affecting local services and many senior clinical and operational managers were involved in helping the review process learn about our robust and resilient emergency and acute pathway provision here at Peterborough & Stamford. 3. Urgent Care Performance across the urgent care operational services remained under critical pressure in April, as indicated across the range of KPIs. 3.1 Ambulance handover breaches Indicator Performance Ambulance Handovers 390 DTOCS 9.6% Emergency Readmissions 336 A&E 4 Hour 76.1% Cancelled Ops 0.6% Trolley Waits > 12 hrs 0 Stroke in dedicated stroke facilities 84.8% In April the ambulance handover breaches have reduced from the exceedingly high levels seen in March, with April reporting 390 breached compared to 515 in March. This is still very high and 298 of these breaches were over 60 minute delays. The delays constitute both a clinical operational and financial risk to the Trust. The patients safety is monitored throughout the delayed handover, but nonetheless this is a poor experience for those arriving in distress and this issue will remain a daily priority for our ED staff and our Site Senior Management team. Focused discussions are ongoing with Commissioners about the continued rise in demand from EoEAS. Localities, where it has recently been confirmed that a 20% rise in Red1/Red2 emergency calls (8 minute response threshold) is driving the increased emergency ambulance traffic to PCH site. The Trust is alert to the importance of keeping under review how the wider system of public services are working together to avert demand to the EoEAS for example, NHS111 directions and GP clinical triage of calls. We believe that more can be done to curb the growth in the volume of ambulances by investing in further staff training, tightening the call handling supervision and improving Hear & Treat and See & Treat rates in the ambulance services. 3.2 DTOCs In April the Trust has seen a marked increase in delayed transfer of cares (DTOC). The level has risen to 9.6% from 6.8% in March. In April this accounted to 1566 occupied bed days lost, meaning that the hospital lost both activity and income. DTOCs continue to be managed internally by the Discharge Team on a daily basis with sometimes twice-daily Page 5 of 12

239 Board of Directors, 24 May 2016, Item (f) escalation to all partner agencies, usually via CCG-led conference calls. The Trust is disappointed that the SRG action plan has still not impacted positively on the DTOC level. The high levels are impacting on day to day acute bed capacity and our smooth patient flow, especially to the medical bed base. During April we have written to the commissioning bodies on several occasions asking for support in reducing DTOC as they are impacting on our ability to meet the needs of all patients in a timely way. The level of DTOC has had a particular impact on the stroke ward during April and ultimately impacted on the stroke performance metrics. Again, we have brought this matter to the attention of C&P CCG. In the absence of any evident improvement with DTOC, the Trust has started to make enquiries concerning potential new avenues to approach this problem. For example, the Trust has become aware that there are 70+ empty care home beds in the Peterborough city area and a further 15 units potentially available for reablement / supported short-stay subacute in north Cambridgeshire. Consideration of such opportunities is underway. 3.3 Readmissions Emergency readmissions in April have reduced to 336 compared to 377 in March. This is a continuing improvement as seen from January We continue to work with our partner agencies and commissioners in reducing readmissions. As reported last month, a recent joint clinical audit indicated just 2% of readmissions were found to be linked to premature discharge from hospital or poorly planned aftercare. 3.4 Trust A&E Performance Below is the Trust s A&E Performance for April There has been a marginal improvement on the performance from March by 0.7% moving from 75.4% in March to 76.1% in April. This remains seriously adverse to the national standard and off-trajectory as previously agreed with the C&P CCG (achieving 92% by April 2016). Monthly & Year to Date (cumulative) Performance against the A&E Waiting time standard (Maximum of 4-hours from Arrival to Departure, or Admission) Month Attendances PCH Stamford Trust >4-hour Breaches Performance Attendances >4-hour Breaches Performance Attendances >4-hour Breaches Performance YTD (cum) Performance Apr-16 9,170 2, % % 9,930 2, % 76.30% May % Jun % Jul % Aug % Sep % Oct % Nov % Dec % Jan % Feb % Mar % The following table is the A&E performance for FY15/16. This evidences that April saw the highest increase in attendances compared to all months in 15/16 with the exception of December at PCH. There were 9170 attendances at PCH in April 2016 and a total of 9930 across both sites. The average monthly total for 15/16 was 7513 which shows a 22% growth from this to attendances in April From March 2016 to April 2016 there has been a 17.5% increase in A&E attendances. Factors driving this step change are a key subject of debate by SRG partners and between the Trust and its Commissioners. Page 6 of 12

240 Board of Directors, 24 May 2016, Item (f) Monthly & Year to Date (cumulative) Performance against the A&E Waiting time standard (Maximum of 4-hours from Arrival to Departure, or Admission) Month Attendances PCH Stamford Trust >4-hour Breaches Performance Attendances >4-hour Breaches Performance Attendances >4-hour Breaches Performance YTD (cum) Performance Apr-15 8,066 1, % % 8,802 1, % 82.38% May-15 6, % % 7, % 88.08% Jun-15 6, % % 7, % 90.40% Jul-15 8, % % 9, % 91.98% Aug-15 6, % % 7, % 92.67% Sep-15 6, % % 7, % 93.21% Oct-15 8, % % 9, % 93.72% Nov-15 7, % % 7, % 93.92% Dec-15 9, % % 9, % 93.64% Jan-16 7,031 1, % % 7,612 1, % 92.99% Feb-16 7,413 1, % % 8,047 1, % 91.89% Mar-16 7,802 2, % % 8,472 2, % 90.51% The Trust has received a Contract Query Notice from South Lincolnshire CCG on both A&E performance and on Ambulance Handover breaches. The meetings with the CCG will take place during May to establish the outcome of this notice but we will be seeking to link the SRG partnership working issues (see above) and the increase in A&E footfall Correlation between 4 hr % to average daily A&E Att April May June July Aug Sept Oct Nov Dec Jan Feb Mar Ave A&E Att per day 4 Hour % Act 4 hour % Tgt 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% The recovery from the continuing weak A&E 4hr performance is being hampered greatly by the ongoing very high footfall demand (see chart above). We have studied the emergence of the increased emergency demand and determined that many local people are seeking help from our ED, but the actually only require professional advice & guidance as opposed to emergency care and treatment interventions that can only be found at an A&E Service. This indicates that some members of the public are seeking help from the ED, whereas they could potentially self-care or seek help from alternative sources such as GPs, the MIIUs, NHS 111, their local pharmacies etc Page 7 of 12

241 Board of Directors, 24 May 2016, Item (f) To compound our challenge in driving our recovery on the 4hr performance, the Trust continues to respond to marked staffing shortages in key roles across the medical and nursing workforce especially in the Emergency Department and Acute Pathway. In February, the Trust agreed a new Remedial Action Plan to recover the A&E 4hr performance, having met with the C&P CCG to agree what specific actions can be regarded as directly within our control, such as staffing and those that are clearly out with the Trust s responsibilities, such as demand management or DTOCs (see chart below) Correlation between 4 hr % to average daily DTOCs April May June July Aug Sept Oct Nov Dec Jan Ave DTOCs per day 4 Hour % Act 4 hour % Tgt 100.0% 95.0% 90.0% 85.0% 80.0% 75.0% 70.0% The Trust is rapidly taking forward a range of new staff recruitment initiatives for medical and nursing staff, with prioritisation being given to resolving staffing gaps across the urgent care services. In recent weeks, the Trust has welcomed new recruits to the Medical Assessment Unit and to the Emergency Department, both nursing and medical staff. Our reputation for teaching, training and commitment to clinical quality of patient care remains a critical factor in being able to attract new recruits, despite the demand on all emergency care services. Throughout April, we continued to experience daily shortfalls in both nursing and medical staff and this required quick and careful management of ratios in all areas. We found that we could not always achieve our optimal staffing mix on every shift in ED and MAU despite best efforts to improve our shift fill rate. The Trust remains fully committed to complying with the Monitor agency nursing and locum doctor cost cap and a further reduction in the per hour pay rates came into force in April As a result of the continuing poor performance on 4hr standard (see line graph below), the Trust has written an internal short-term turnaround plan focused specifically on the actions we can take forward at pace to ensure we are optimally placed to underpin our recovery journey. These actions include new measures to accelerate staff recruitment, enhance rota planning, focus on eliminating internal waiting, redeploy nurse practitioners to ED / MAU and intensifying the senior clinical decision making within the MAU. The COO will monitor the internal action plan and continues to report against it to the weekly Executive Team Page 8 of 12

242 Board of Directors, 24 May 2016, Item (f) meeting. Furthermore, NHS Improvement has suggested to the Trust that we invite the national Emergency Care Intensive Support Team to return to PCH to review the development work throughout 2014/2015 and seek their advice as to whether there are any other actions that we as a Trust should progress to strengthen our performance quickly. During May 2016, we expect a group of senior professionals from ECIST to spend a day with the Trust, as an initial diagnostic visit but we hope the team will also spend time speaking to SRG partners to establish what supportive actions are being taken forward outside of hospital. 3.5 Trust actions in support of system Urgent Care Development Plan As mentioned above, SRG partners endorsed a new iteration of the Urgent Care Development Plan. Importantly, we now see this as a System-wide plan to recover and sustain 4hr delivery. However within this new plan, the Trust is progressing with a number of actions designed to strengthen our internal processes on 4hr performance as standard and to reinforce the changes implemented to our urgent care pathway during 2014/2015. The COO is meeting with senior operational colleagues in ED and Medicine each week to review our internal action plan. Specific development and improvement actions for the hospital include: Widening the scope of professional practice for Nurse Practitioners from EACU and start to in-reach to the Emergency Department, the MAU and Medical Short Stay Reviewed the impact from our recent Breaking the Cycle event lasting 3 weeks through March, to challenge the clinical directorates on key learning and determine what and how improvement actions could be taken forward Search & select initiatives underway to seek out Consultant Acute Physicians to join our urgent care pathway including 2-day attendance with Trust stand at Belfast conference for Society of Acute Medicine Work to re-establish the Surgical Assessment Unit in a new location Supportive engagement with CPFT s JET service colleagues to promote closer joint working and daily visits to the hospital Started work to review our ED workforce again, in light of the increased footfall and level of patient dependency / acuity that we are seeing in the last 6 months Page 9 of 12

243 Board of Directors, 24 May 2016, Item (f) Piloting work on Ward A10 (Gastro) with QFI, focused on stay length reduction Lobbying of commissioning bodies concerning the loss of the Trust s Admission Avoidance Team Promotion of nurse-led and therapist-led discharging on medical wards Made concerted efforts to engage the wider public in understanding that ED is for emergency care needs not anything & everything through radio and press contact Internally, we are monitoring the hospital-focused improvement actions each week at a new weekly executive-led team meeting, following a similar approach to 2015 turnaround. 4.0 Elective Pathway 4.1 LOS and Readmissions Elective length of stay has seen a further improvement compared to March s figure from 2.7 days to 2.3 days. Elective readmissions have reduced again in April to 64. This is a continuing trend which gives confidence that the ongoing work within the clinical directorates is properly directed and effective. 4.2 OP Efficiency April has seen the expected decline in outpatient clinic efficiency with 2776 hospital cancellations. This decline in performance was expected due to the Junior Doctors strike. Whilst March saw a slight decline this has increased in April as there were two strikes and the second strike heavily impacted on Consultants across the Trust who needed to provide the emergency cover across the whole organisation hence greater disruption. The Trust s DNA rate has seen a decline in month from 7.4% in March to 8.2%. The Trust s fully revised Access Policy has now been launched and the DNA process is being rolled out across the organisation. Training is being made available to all staff as required on both the Access policy and the DNA process. The new policy is frequently a topic at the weekly RTT group, at which all services are represented. There is a continued focus on outpatient efficiency with a project underway with specific resource in the Cancer, Diagnostic and Support Services Directorate. 4.3 Electronic referrals Indicator Performance LOS Overall Elective 2.3 % Occupancy 84.4% Choose and Book Slot issues Unavailable Outpatient Efficiency 2776 DNAs 8.2% Elective Readmissions 64 Diagnostic Breaches 0.8% January and February s figures for appointment slot issues have now been published and this is shown below. It shows that December was an exception, potentially linked to annual leave and bank holidays, and the improvement work undertaken has had an impact. As the Trust is not at the required level for performance Cambridgeshire and Peterborough CCG Page 10 of 12

244 Board of Directors, 24 May 2016, Item (f) require an updated Remedial Action Plan. This is currently being developed with input from the specialties seeing the most appointment slot issues. April May June July August Sept Oct Nov Dec Jan Feb March 11% 11% 11% 10% 9% 4% 5% 6% 11% 5.9% 6.3% Not available Weeks Referral To Treatment April s 18 week Incomplete Pathway performance was 93.5% against the 92% standard. This is a marginal improvement on March s performance which was 93.2%. This continues to be a concern for the Trust and is being monitored closely through the weekly RTT meeting and Performance meetings. Neurology has seen a marked improvement in month; moving from a performance of 82.7% to 88.4% for incompletes. This demonstrates that the triage pilot is working well and has impacted on the waiting list. Further additional sessions are being held to address the backlog of new referrals that were received prior to the pilot starting. There has been an initial review of the pilot this month with the CCG and it is showing positive signs for patients as well as for performance. The Commissioners are pleased with the initial review and would like to see whether it can be used in other specialties that are struggling. A further review will take place in the summer including obtaining feedback from GPs. Ophthalmology has also seen an improvement in month. They are now achieving 82.0% for incompletes compared to 80.7% in March. Further work is ongoing in this specialty to address the backlog of both new referrals and follow up appointments. There is an agency doctor currently in post and additional sessions are being held. The Remedial Action Plan for Ophthalmology is currently under review. Orthopaedics has continued to meet the incomplete standard, achieving 92.7%. A contract query notice was received in April for this specialty from Cambridgeshire and Peterborough CCG for failure to meet the standard. This has now been closed as evidence has been provided that at a Trust level this has been achieved for two consecutive months following marginal failure in January and February only. A positive outcome from the discussions with the Commissioner are that joint work will be undertaken with them and CCS, the provider of the MATS service to ascertain how delays in patient pathways can be reduced for this cohort of patients. There is an internal action plan for this specialty to ensure that continued delivery of this service is achieved due to its vulnerability in certain subspecialties like foot and ankle. Admitted clock-stops <18-weeks Standard 90% Non-Admitted clock-stops <18-weeks Standard 95.0% Incomplete open pathways <18- weeks Standard 92.0% Trust Total 83.5% Trust Total 91.7% Trust Total 93.5% General General Surgery 90.7% General Surgery 93.5% Surgery 95.2% Urology 91.1% Cardiology 93.1% Urology 98.6% Orthopaedics 75.7% Orthopaedics 91.4% Orthopaedics 92.7% Page 11 of 12

245 Board of Directors, 24 May 2016, Item (f) Ear, Nose & Throat 44.6% Ear, Nose & Throat 90.1% Ear, Nose & Throat 93.3% Ophthalmology 92.8% Gastroenterology 87.6% Ophthalmology 82.0% Oral Surgery 84.5% Neurology 71.5% Neurology 88.4% Plastic Surgery 85.6% Plastic Surgery 96.5% Plastic Surgery 93.6% 5.1 Other Elective Performance Indicators In April the Trust continued to meet all Cancer Wait Targets with the continued exception of 62 day wait from referral to treatment target. There has been an improvement in month moving from 75.7% to 83.2%. A trust wide remedial action plan has been developed to address the performance and this has been shared with Commissioners. In April the diagnostic target has been met with an achievement of 0.8%. This is marginally higher than last month. The breaches are mainly in: - MRI which are paediatric general anaesthetic cases - non-obstetric ultrasound due to sickness at the end of the month - Neurophysiology due to capacity 6. Contract Issues In April the contract query notices that were still open with Cambridgeshire and Peterborough (C&P) CCG: RTT target Ophthalmology RTT target Neurology A&E 4 hour ASI The A&E target trajectory is currently being reviewed with the CCG following further discussions. We have also received a contract query notice from South Lincolnshire CCG on A&E and Ambulance Handovers. We will be meeting with them in May to discuss the way forward and this will need to include actions led by other statutory bodies too. The Neurology RTT remedial action plan has been agreed and we are currently on track with this. Currently Ophthalmology is not meeting the required trajectory and this is being reviewed with the specialty. A contract query notice has also been received in month on failure to meet the incomplete RTT target in Trauma and Orthopaedics. As detailed above this has been closed because at a trust level the performance has been met for two consecutive months. The contracts team are reviewing the internal mechanisms of monitoring and proactively managing the contract. This includes weekly reviews of remedial action plan actions with directorates and monthly performance meetings with directorates. ENDS Page 12 of 12

246 Board of Directors, 24 May 2016, Item (c) Transformation and Cost Improvement Programme Presented for: Presented by: Discussion Anita Jackson, Director CIP & Transformation Scrutinised by: Trust Board 24 May 16 Strategic objective: Date: 24 May 16 Regulatory relevance: NHS Constitution delivery Equality and Diversity Freedom of Information Release Private Debate 1. Executive Summary Deliver the financial plan Monitor Licence: Foundation Trust Governance (FT4) not applicable This report covers services and individuals equally and there are no specific equality and diversity issues for consideration This report can be released under the Freedom of information Act 2000 None This report sets out the progress the Trust has made in the identification and delivery of the 2016/17 Cost Improvement Programme (CIP). In Month 1 we delivered 9 schemes. A total of 73k was transacted in month against a plan of 58k. Monthly CIP monitoring meetings have been set up with each Directorate to challenge and support the delivery of all CIP schemes currently identified in the 16/17 CIP Plan. CIP summary 16/17 Key Indicator Savings delivered CIPs have delivered a total PYE of 0.953m, 7% of the 13m PYE to date target with 9 schemes achieving Gateway 5 in month. A total of 9 schemes delivered to date. Status FYE Forecast Outturn Forecast Outturn RAG rated The FYE of 2016/17 CIPs delivered as at month 1 is 0.725m, 6% of the target of 13m recurrent savings for the year. The forecast outturn at month 1, based on the Master Plan for 2016/17 is 8.571m FYE and 7.057m PYE (including non-recurrent items). The RAG rated forecast outturn delivery for the end of the financial year is 7.682m FYE and 6.354m PYE. Page 1

247 Board of Directors, 24 May 2016, Item (c) 2. CIP plan progress 16/ Plan progress at month 1 The table below shows the status of the 16/17 CIP master plan by Directorate. Variance of the plan to the 13M target is 4.428m FYE and 5.942m PYE. Directorate Target FYE '000 Target PYE '000 Potential value 16/17 FYE '000 Potential value 16/17 PYE '000 Variance FYE '000 Variance PYE '000 % Variance FYE % Variance PYE Corporate % -100% Emergency & Medicine 2,952 2,952 2,106 1, ,545-29% -52% Estates & Facilities 1,502 1, ,203-1,321-80% -88% Family & Public Health 1,533 1, % -63% Cancer, Diagnostics & SS 2,752 2,752 2,917 2, % -2% Surgical Directorate 3,560 3,560 2,502 2,192-1,058-1,368-30% -38% Grand Total 12,999 12,999 8,571 7,057-4,428-5,942-34% -46% The table highlights each Directorate s variance to their CIP target in terms of value and as a % of their target. As you can see from the table above, only one Directorate has identified a full FYE plan against the target set and no Directorate has identified a full plan for the PYE target. 2.2 RAG rated plan 16/17 Directorate RED AMBER GREEN Total RAG Rated Potential Potential status status FYE ' PYE '000 FYE '000 PYE '000 FYE '000 PYE '000 FYE '000 PYE '000 FYE '000 PYE '000 Corporate Emergency & Medicine 2,106 1, ,106 1,407 2,106 1,407 Estates & Facilities Family & Public Health Cancer, Diagnostics & SS 2,917 2, ,234 2,533 2,712 2,653 Surgical Directorate 2,502 2, ,802 1,492 1,942 1,632 Grand Total 8,571 7, ,840 5,928 7,682 6,355 The table above shows the RAG rated plan for 16/17 The current schemes in the plan for 16/17, whilst giving potential savings of 8.571m FYE and 7.057m PYE are rated by the PMO on the likelihood that these schemes deliver the full savings attributed to them. The RAG rating system rates GREEN schemes at 100%, AMBER schemes at 70% and RED schemes at just 20%. This therefore reduces the total value of the plan as seen in the table. This gives a RAG rated plan of 7.682m FYE and 6.355m PYE. 3. CIP Delivery progress 16/17 Page 2

248 Board of Directors, 24 May 2016, Item (c) 3.1 Table for current status of the delivered 16/17 CIP values against target Directorates are expected to deliver 100% of their individual targets in order for the Trust to achieve the 13m target. At month 1, 6% of the full year and 7% of the part year target has been delivered. % delivered against target FYE % delivered against target PYE Total FYE - Total PYE - Target FYE Target PYE Actual Actual Directorate '000 '000 '000 '000 Corporate % 0% Emergency & Medicine 2,952 2, % 0% Estates & Facilities 1,502 1, % 0% Family & Public Health 1,533 1, % 0% Cancer, Diagnostics & SS 2,752 2, % 34% Surgical Directorate 3,560 3, % 0% Grand Total 12,999 12, % 7% 3.2 Current Status of delivered Recurrent CIPs Actual FYE '000 Income Pay Non Pay Total Corporate Emergency & Medicine Estates & Facilities Family & Public Health Cancer, Diagnostics & SS Surgical Directorate Grand Total Percentage Split 0% 60% 40% The table above shows how the current FYE CIP delivery is made up. 0% Income, 60% Pay and 40% Non-Pay. This is in the main due to no income schemes being reported as delivered in month 1 due to a change in process for tracking the income schemes. Income schemes will be tracked and reported one month in arrears this financial year. 3.3 April (M1) Financial Overview The Trust CIP delivery for M1 (including income contribution and other non-recurrent measures) was 0.073m with a total FYE delivery of 0.725m and PYE of 0.953m as illustrated in the table below. Planned Schemes Actuals FYE 000 PYE 000 schemes Validated 000 YTD Month Month 2 Month 3 Month 4 TOTAL Page 3

249 Board of Directors, 24 May 2016, Item (c) 3.4 YTD Progress against plan The table below shows how Directorates have delivered against plan. At month 1 Schemes Planned At month 1 Schemes Delivered Directorate PYE Plan '000 PYE Delivered '000 Delivered against plan Corporate Emergency & Medicine Estates & Facilities Family & Public Health Cancer, Diagnostics & SS Surgical Directorate Total Delivered No. against plan Key 20% of target > 20% of target = target > target The table above identifies that one Directorate has under delivered against their financial plan, four Directorates have delivered against their financial plan and one Directorate has over delivered against plan. 4. Transformation The standard approach for Transformational Change follows this process: The Business Transformation Team has just undergone a major reorganisation. Amy Edwards resigned in February 2016 and has been replaced by Nicola Nightingale, who joined the team in April Nikki s background is with Caterpillar and she is a Black Belt Six Sigma expert and will be supporting the following areas: Pharmacy Diagnostics Endoscopy Sue Jay retired on 4 May and she was replaced by Fiona O Mahoney who arrived to the team on 3 May. Fiona s background is with the Public sector and charities. She is currently undergoing a period of acclimatisation before she is given her first projects to work on. Steve Joy-Good will return to clinical practice once he has completed some outstanding projects. He will be replaced by Michelle Barber who joins the team on May 25th. Michelle has worked in NHS service improvement for many years and is a BMS by background. One of her first areas of support will be with the Pathology Department. The BTT will be focussed on supporting the following areas:- Page 4

250 Board of Directors, 24 May 2016, Item (c) Driving the 15 Recommendations (84 sub recommendations) from the Lord Carter of Coles report Delivery of the Elective Care Programme Support to the Strategic Urgent Care Delivery Plan Project Management support of the Renal Expansion Project Continued Project Management support to the Standardisation of Shifts PDSA The Pride and Joy pilot, which started on February 8 th 2016, on A10 has now concluded. The main benefit was that the white board process was improved such that the time spent by the MDT at the white board was reduced from 90 minutes to 30 minutes per day, of value adding conversation. This equates to releasing 60 hours per week time to care or 3,120 hours per year. The improvements suggested by the MDT were that antibiotic therapy should be annotated on the white board, the social circumstances should be noted on the white board to ensure that the RDS was submitted within 24 hours of admission and therapy could be alerted to a new referral in real time. Patients who were not medically fit (due to undergoing IV therapy) or were DTOC were acknowledged briefly and confirmed that there had been nil deterioration overnight and the time was therefore reduced in nonvalue adding conversation. The average Length of Stay (ALOS) has been variable: MONTH ALOS (DAYS) December January February March April May The table shows that at the start of the pilot in February the ALOS deteriorated to 12.4 days it should be remembered that junior doctors took action on 10 February. There was an improvement in the ALOS of 2.4 days in March 2016, despite the two days of action by the Junior Doctors on 9 and 10 March April saw another deterioration of the ALOS to 11.7 days, this was during a further two days of action by the Junior Doctors (6 and 8 April) and the subsequent rotation of the junior doctors. May to date has seen an improvement in the ALOS. During this pilot the substantive ward manager, who had previous experience of Pride and Joy at her old Trust, was moved to support MAU, which meant that the ward was without a Band 7 for a number of weeks at the start of the pilot. In March we had stability with an Acting Band 7 and the Ward Tracker and then in April the Ward Tracker was on leave and the Acting Band 7 was moved to support another medical ward. The Medical SMT are currently undertaking Work Place Audits of all white boards. Further training and coaching will be provided to the SMT who will then coach, support and mentor the Band 7 ward managers to ensure that white boards are more effective and constraints are surfaced and dealt with immediately, in order that the LOS of each patient is reduced and patients are safely and effectively discharged in a timely fashion. Page 5

251 Board of Directors, 24 May 2016, Item (c) Test / Pilot On 11 May, Mr Craig Reston and team undertook the first pilot in the theatre suite. The pilot was an all day list with five joints being undertaken. The list started (knife to skin) at 0845 hrs and was completed by 1656 hrs all members of the MDT had a break during the list. There was staggered arrival times for the five patients, so as to avoid any unnecessary waits in DOSA. Mr Reston will continue with the all day lists every fortnight, which will see an extra 20 joint procedures per annum at no additional cost. In addition, the highly skilled middle grades will be undertaking the more simple joint procedures, three per list, under Mr Reston s direct supervision. Our next steps are to meet with Mr Reston and complete a PDSA all lessons learned will be actioned prior to the next all day list on 25 May. We have two more joint surgeons that we will test/pilot the all day list with, which will give an additional 60 joints per annum at nil additional cost, plus the additional 60 joints from the middle grades at an average tariff of 4500, this will see a net increase of > 500K. However, the Trust s ability to accommodate the additional joints per list is wholly dependant on the Urgent Care pathway getting under control and thus medical outliers reducing to less than 10 per week. The project team are exploring opportunities with the foot and ankle surgeons (we are currently outsourcing work) with a view to improving pathways at the Trust and reducing the volume of outsourcing. Diagnose As Is As part of the Elective Care Pathway, BTT are supporting the Enhanced Recovery for Total Knee Replacement (TKR). The current end to end process for TKR has been mapped and will be presented at the MSK audit afternoon on 19 May for discussion and action. 5. Transformation Fund Expenditure */ Section 5 needs to be taken out. This budget is not managed by the PMO team, as directed by the Director of Finance 16/05/16. Page 6

252 Board of Directors, 24 May 2016, Item (d) Finance Board Report Presented for: Presented by: Approval Peter Oldfield, Acting Director of Finance Scrutinised by: Finance and Investment Committee 23 April 2016 Strategic objective: Deliver the financial plan Date: 16 May 2016 Regulatory relevance: NHS Constitution delivery Equality and Diversity Freedom of Information Release NHS Improvement Not Applicable Board Summary - Month 1 Overview This report covers services and individuals equally and there are no specific equality and diversity issues for consideration This report can be released under the Freedom of information Act 2000 Income Clinical income for month one exceeded the plan by 0.2m, however this was offset by operational penalties exceeding plan by 0.3m. Ambulance handover penalties alone amounted to over 300k in the month.other income has also over performed against plan by 0.1m. Pay There was an underspend against plan for pay in April which is mainly as a result of reduced spend for agency. The table below shows the normalised agency position against budget. Total agency spend of 1.0m in the month compares favourably to the 1.3m spent in March The second pay graph in section 4 shows agency costs per month by staff type and demonstrates that April 2016 represented the lowest agency spend by the Trust in the last year. Non pay Non pay is underspent in the month due largely to clinical supplies and services and external healthcare providers. The 0.2 underspend for clinical supplies in services represents less stock being purchased in April due to the stocking up by departments for Easter which occurred in late March. Expectation is that this apparent benefit will reverse in future months. The fluctuations in this area are due to stocktaking being carried out annually rather than monthly. External Healthcare underspend of 0.2m is mainly due to

253 Board of Directors, 24 May 2016, Item (d) less work being outsourced in month than plan due to a combination of work being carried out in-house and lower than planned levels of elective activity in the month. Other expenditure Depreciation, interest and Project Orange costs have were in line with budget in month 1. Delivery costs of turnaround and restructuring each showed an underspend of 0.1m. Agency From 1 April 2016, the NHS Improvement (NHSI) cap percentage has been replaced by a value cap for the year which has been set at 14.15m. Budgets are set with only agency premium allocated to the agency line. When agency costs are incurred the whole cost of the person (rather than just the premium) is shown as agency spend. The table below normalises the budgeted value in order to enable a realistic comparison of budget versus spend in the month. APR-16 '000 Budget 851 Normalised Budget 1,150 Actual 1,000 Variance 150 The Trust continues to rigorously challenge agency spend in order to remain within the caps set by NHSI and has invested in the recruitment team in order to drive substantive appointments to vacant posts. CIPs The risk rated CIP forecast is 6.4m compared with the commitment of 13m. Similarly to prior years the majority of CIPs are expected to be delivered later in the year. The CIP plan in month one was 750k due to a phasing error. The phasing for month will be corrected to show a more resonable level of required achievement in the month. Full Year M1 CIP figures YTD Forecast Part Year Effect (PYE) '000 '000 Budget ,000 Actual (Schemes delivered to date) Forecast (All identified schemes) - 7,057 Forecast RAG rated (All identified schemes) - 6,355 Full Year Effect (FYE) Actual (Schemes delivered to date) Forecast (All identified schemes) - 8,571 Forecast RAG rated (All identified schemes) - 7,682 Full year forecast A detailed full year forecast will be produced at the end of quarter 1. However, we are presently in a position to declare a significant and material risk to the 2016/17 results. As identified throughout the budgeting process, and line with NHSI s (previously Monitor) direction, all Cost Improvements must have a direct net favourable impact on the financial results. Unfortunately, despite the CIP programme having been

254 Board of Directors, 24 May 2016, Item (d) worked up over the last 6 months we remain in a position where there is a shortfall of around 6.6m for this financial year. This risk is highlighted in the table in section 7. The Chief Executive Officer is now having weekly meetings to address this situation. 1. Executive Summary 1.1. Finance dashboard Key Issue Executive Summary Year to date vs budget EBITDA Underlying Surplus/ (Deficit) EBITDA was ( 0.3m) against a planned ( 0.7m) for the year to date. The Trust is reporting a ( 2.6) deficit which is 0.5m better than plan YTD. G G Forecas t Outturn G G Action Plan Cambridgeshire and Peterborough CCG A contract with C&P CCG was signed on 22April 2016 for the value of 133,532,016. This contract with C&P CCG excludes the East of England pathology hub contract. Pathology TPS A contract with pathology TPS has now been signed with a value of 4,369,008 on 22/4/2016. Midlands CCG The budgeted value of the contract with the Midlands CCGs is 67,133,311 and signed on 22/4/2016 NHS England Commissioning The budgeted value of the contract is 24,561,153 as signed on 22/4/2016 CIP Programm e The Trust has recognised 0.073m CIP YTD, ( 0.677m behind plan). R R The phasing of CIP in month one was erroneous. The position will be corrected for month 2. Cash and Liquidity The Trust did not make any loan drawdown in April G G The Trust is liaising with DoH via NHS Improvement to establish an appropriate cash funding route for 2016/17. The Trust plans to drawdown in June 2016 the funding for the 2.7m capital expenditure which was deferred in 2015/16 based on agreement with DoH. Capital Expenditur e Capex was 0.36m overspent versus budget at Month 1. R R Capital budget has not been agreed with DoH. Current spend is catch up of the 2.7m slipped in 2015/16. Financial Sustainabi lity Risk Ratings (FSRR) This assesses the Capital Service Cover, Liquidity Ratio, I&E Margin and Variance in I&E Margin to determine a final rating. The Trust s overall FSRR rating is 2. G G The Trust s Financial Sustainability Risk Rating is 2. Under the old Continuity of Service Risk Rating the Trust would still be measured as a 1. The improvement is due to the Trust s deficit showing a favourable position versus plan. EBITDA / surplus Capital Expenditure (rating against a revised plan) G On or better than target G Within 5% of target A Between 0% and 5% below target A Between 6% and 15% of target R Greater than 5% below target R Greater than 15% of target CIP Programme G On or better than target G Cash and Liquidity Higher cash balance than plan or within 10% lower than plan A Between 0% and 10% below target A Cash balance lower than plan by 10% up to 20% R Greater than 10% below target R Cash balance lower than plan by greater than 20%

255 Deficit Actual v Plan Board of Directors, 24 May 2016, Item (d) Income: Year to date over performance on clinical income due to non-elective and other clinical income. Pay: 0.3m better than budget for the month. The pay budget reduces across the year with agency staff being replaced by cheaper substantive staff and as pay CIP schemes are forecast to be achieved. Non-pay: Underspent for the month by 0.1m due to clinical supplies, general supplies, external healthcare and drugs. Excluded drugs cost is offset by additional clinical income. Other: Restructuring and Delivery Costs of Turnaround each show an underspend of 0.1m in month. PYE CIP Programme Savings Year to date performance is adrift of budget by 0.677m. Similarly to prior years the majority of CIPs are expected to be delivered later in the year. 12 Month Forecast Cash flow Requirement Cash and Liquidity The Trust plan shows a requirement of 56.7m of cash funding in 2016/17. Capital funding stream for the slipped 2.7m expenditure based on Cap to rev agreement with DOH in 2015/16 will be drawn down in June Capital Expenditure Plan v Forecast Projects Property- new land, buildings or dwellings Property- maintenance expenditure Plant and equipment - Information Technology Property, plant and equipment - other equipment Property, plant and equipment - other expenditure Total Capex Plan Spend In Spend To Date Forecast For 2016/17 Variance To Plan 000s 000s 000s 000s 000s 2,361 (34) (34) 2,361-1, , , ,416-6, ,497 - Externally funded Radiotherapy 4, ,520 0 MRI 1, ,200 0 UPS 1, ,550 0 PAS 2, ,485 0 Other externally funded projects GRAND TOTAL , ,285 0 Total spend was 0.36m worse than the Trust s capital expenditure plan for the month.

256 Board of Directors, 24 May 2016, Item (d) Financial Sustainability Risk Ratings Continuity ofservice Financial Risk Efficiency Ratings Capital Service Cover Rating As at 31st March 2016 As at 30th April Liquidity Ratio 1 1 I &E Margin 1 1 Variance from Pla in relation to I&E Margin Financial Sustainability R Rating Capital Service Cover > <1.25 Liquidity >0 (7) - 0 (14) - (7) < (14) I&E Margin % 0-1 % (1) - 0 % (1)% Variance in Plan in relation to I&E Margin % (1) - 0% (2) - (1) % (2) 2. Overview of Financial Performance 2.1 Income and Expenditure Statement The Financial Sustainability risk rating comprises four financial metrics: 1. Liquidity: this ratio indicates whether the provider can meet its operational cash obligations. It is measured as days of operating costs held in cash or cash equivalents forms, including wholly committed lines of credit available for drawdown. 2. Capital servicing capacity: this ratio indicates whether the provider can meet its financing obligations, i.e. the degree to which the organisation s generated income covers it s financing obligations (including PDC dividends, interest and debt repayment and Private Finance Initiative capital and interest payments). 3. I&E Margin: this is ratio of surplus/(deficit) as a percentage of income. 4. Variances from plan in relation to I&E Margin: This ratio measures the variance between foundation trust s planned I&E margin in its annual plan return and its actual I&E margin. Scoring a 1 on any metric restricts the overall rating to 2. Overall the Financial Sustainability Risk Rating is 2. In Month Year To Date Full Year Full Year Income and Expenditure Budget Actual Var. Budget Actual Var. Current Forecast Previous Forecast Forecast Change Annual Budget Forecast Variance m m m m m m m m m m m Clinical Income (inc MOD) (0.1) (0.1) Other Income Total Income Pay (14.8) (14.5) 0.3 (14.8) (14.5) 0.3 (177.9) (177.9) 0.0 (177.9) 0.0 Non Pay (6.5) (6.4) 0.1 (6.5) (6.4) 0.1 (78.3) (78.3) 0.0 (78.3) 0.0 PFI Unitary Charge (1.7) (1.7) 0.0 (1.7) (1.7) 0.0 (20.2) (20.2) 0.0 (20.2) 0.0 Total Expenses (23.0) (22.6) 0.4 (23.0) (22.6) 0.4 (276.4) (276.4) - (276.4) - EBITDA (0.7) (0.3) 0.4 (0.7) (0.3) 0.4 (4.1) (4.1) - (4.1) - Depreciation & Interest (2.3) (2.3) 0.0 (2.3) (2.3) 0.0 (27.9) (27.9) 0.0 (27.9) 0.0 Delivery costs of turnaround (0.1) (0.1) (0.9) (0.9) 0.0 (0.9) 0.0 Underlying Surplus/ (Deficit) (3.1) (2.6) 0.5 (3.1) (2.6) 0.5 (32.9) (32.9) - (32.9) - Restructuring (0.1) (0.1) (1.3) (1.3) 0.0 (1.3) 0.0 Impairment Project Orange (0.1) (0.1) 0.0 (0.1) (0.1) 0.0 (1.0) (1.0) 0.0 (1.0) 0.0 Retained Surplus/ (Deficit) (3.3) (2.7) 0.6 (3.3) (2.7) 0.6 (35.2) (35.2) - (35.2) - The underlying deficit (before one-off costs and one-off income) for the month ( 2.6m) compared to a planned loss of ( 3.1m) providing a favourable variance of 0.5m. Pay was underspent by 0.3m in Month 1. Non Pay was underspent by 0.1m in the month due to Clinical Supplies and Services, Excluded Drugs, General Supplies and Services and External Healthcare Services. Unitary Payment was in line with plan in month. Delivery Costs of Turnaround and restructuring were underspent by 0.1m in month and Project Orange was in line with plan 3. Income

257 Board of Directors, 24 May 2016, Item (d) Income Year to date April 2016 In month Year to date Forecast Full year Budget Actual Var. Budget Actual Var. Current Previous Forecast Annual Forecast forecast Forecast Change Budget Variance m m m m m m m m m m m Electives (0.1) (0.1) Day Cases Non-Electives Outpatients A&E Maternity Critical Care (0.2) (0.2) Diagnostics (PbR) Delivery of Chemotherapy Radiotherapy Excluded Drugs & Devices (0.1) (0.1) Other clinical income Emergency Marginal Tariff (0.3) (0.5) (0.2) (0.3) (0.5) (0.2) (3.8) (3.8) 0.0 (3.8) 0.0 Total Clinical Income Emergency Readmissions (0.1) (0.1) 0.0 (0.1) (0.1) 0.0 (1.7) (1.7) 0.0 (1.7) 0.0 Operational Penalties (0.2) (0.5) (0.3) (0.2) (0.5) (0.3) (2.5) (2.5) 0.0 (2.5) 0.0 Total Penalties (0.3) (0.6) (0.3) (0.3) (0.6) (0.3) (4.2) (4.2) 0.0 (4.2) 0.0 CCQ QIPP CQUIN Total Clinical Income (0.1) (0.1) Income Summary Clinical income is showing an adverse variance of 0.1m year to date. The trust has agreed contracts with its main commissioners these being Cambridge & Peterborough CCGs, South Lincolnshire CCG and NHS England. The contract with Cambridge and Peterborough includes the activity and value previously recorded against Uniting Care in 2015/16. Also unlike 2015/16 the performance against the trusts plan indicates that the trust has mobilised capacity to be able to meet the clinical activity set out in the plan. Although the trust has reported a deficit for April there is a positive variance against clinical activity reported for M1 which is a credible performance taking into account the 2 days impact of the junior doctor strike in April. As regards penalties the 2 areas which are most significant are 18 week incomplete pathways and Ambulance Handovers. Penalties - April ALL Commissioners Value Plan Actual Variance A&E4HR 0 (51,168) (51,168) A&E Total 0 (51,168) (51,168) 18WK_INC 0 (102,733) (102,733) 18WK Total 0 (102,733) (102,733) ALL (205,479) 0 205,479 AMBH 0 (62,400) (62,400) AMBH>60 0 (256,000) (256,000) Cancelled Ops 0 (7,024) (7,024) NEVER EVENT 0 (2,000) (2,000) QUERIES (64) 0 64 Other Total (205,544) (327,424) (121,880) Grand Total (205,544) (481,325) (275,781)

258 Board of Directors, 24 May 2016, Item (d) Activity Analysis - April 2016 The dataset below shows the activity levels across the non-elective, elective and outpatient pathways utilising the daily averages of activity. April has continued to see growth in A&E attendances and is above plan. ACU activity is also above plan whilst non-elective admissions are under plan. Elective and outpatient activity is below plan in month with the exception of outpatient procedures and day cases. Whilst elective activity is marginally under plan this is a positive achievement due to the industrial action by Junior Doctors in the month which necessitated Consultants in all specialties cancelling planned work. There were due to the cancellations of planned surgical work owing to high numbers of medical outliers and high emergency medical admission takes on many days. April has seen a slight decrease in A&E attendances compared to March. There were average attendances per day in April compared to in March. The plan for April was set at per day demonstrating that even with the growth seen last year to base the plan on there is continued growth in A&E attendances. Last year April was at average attendances per day. This again demonstrates the continued increases over the year and the pressure the department is under. Whilst there has been an increased trend in A&E attenders this has not translated through to non-elective admissions this month. The Trust is slightly below plan which was set at per day and saw which is on par with last year s activity, 106 per day. The introduction of ACU during last year has helped keep the admissions at a stable level. It also indicates that more activity coming through to A&E is minors and could be treated in the community.

259 Board of Directors, 24 May 2016, Item (d) Daycase activity per day has over performed this month compared to plan (140.9). The average per day was daycases. Last year this was per day. Elective activity has continued at a similar level as March. April has seen 23.7 electives per day compared to a plan of Whilst this is below plan it is a marginal underperformance considering two Junior Doctor strikes, particularly the second one which heavily impacted on Consultant activity as well. This was coupled with nonelective patients utilising elective beds due to capacity issues. First outpatient appointment activity levels have also marginally underperformed. The plan was set at per day but was achieved. Outpatient activity was also heavily impacted on due to the Junior Doctor strikes. Last year s activity was per day so the activity seen this April has increased by 10%.

260 Board of Directors, 24 May 2016, Item (d) The follow up appointments also underperformed against plan. April saw follow ups per day compared to the plan set at per day. Again this is the impact from the Junior Doctor strikes. Last year s activity was per day. There has been a 10% growth in follow ups as well compared to last April. Outpatient procedure activity has over performed against plan in April. The plan was set at per day but was achieved. This has seen a growth of 22% compared to last year s April activity. This is likely to increase as more procedures are coded. The Ambulatory Care Unit (ACU) activity has also over performed in month compared to plan. ACU saw 65.5 patients per day compared to a plan of In April 2015 the department was seeing 49.0 patients per day. This demonstrates the work that has gone in over the year to increase the activity by 35%. Activity Summary

261 Board of Directors, 24 May 2016, Item (d) Activity is above plan in April within A&E, maternity and diagnostics and day cases. Areas below plan are electives, non-electives and outpatients. Considering there was 2 days of the Junior doctors strike that resulted in the cancellation of patients in outpatients and on the elective waiting list then the underperformance in these areas is to be expected, as the plan had not been adjusted to accommodate the impact of these events. Overall trust capacity has been mobilised well to be able to deliver the planned activity, and this represents a significant improvement on the position seen in April The number of un-coded spells were particularly high as due to the May Bank Holiday there was 1 less day for the coders to work within. As we are dealing with just 1 month then the reported numbers are very sensitive to the un-coded position, and the expectation is that they will generate a positive position when these spells are finally coded. As regards uncoded spells the numbers reported were:- Uncoded Spells Month No. Apr Expenditure 4.1 Pay Expenditure Pay Expenditure by Staff Group In Month Year To Date Full year Full year Expenditure Budget Actual Var. Budget Actual Var. Current Previous Forecast Annual Forecast Forecast Forecast Change Budget Variance m m m m m m m m m m m Additional Clinical Services (1.4) (1.4) - (1.4) (1.4) - (17.2) (17.2) 0.0 (17.2) 0.0 Administrative and Clerical (2.2) (2.2) - (2.2) (2.2) - (25.7) (25.7) 0.0 (25.7) 0.0 Agency (0.8) (1.0) (0.2) (0.8) (1.0) (0.2) (8.9) (8.9) 0.0 (8.9) 0.0 Estates and Ancillary (0.1) (0.1) - (0.1) (0.1) - (1.0) (1.0) 0.0 (1.0) 0.0 Locum (0.1) (0.1) - (0.1) (0.1) - (0.7) (0.7) 0.0 (0.7) 0.0 Medical and Dental Consultant (2.6) (2.3) 0.3 (2.6) (2.3) 0.3 (31.1) (31.1) 0.0 (31.1) 0.0 Medical and Dental Other (1.5) (1.5) - (1.5) (1.5) - (18.4) (18.4) 0.0 (18.4) 0.0 Nursing and Midwifery Registered (4.5) (4.3) 0.2 (4.5) (4.3) 0.2 (54.1) (54.1) 0.0 (54.1) 0.0 Scientific and Technical (1.6) (1.6) - (1.6) (1.6) - (20.8) (20.8) 0.0 (20.8) 0.0 Total Pay (14.8) (14.5) 0.3 (14.8) (14.5) 0.3 (177.9) (177.9) (0.0) (177.9) (0.0) The first graph below shows the current and comparative year pay against the pay spend planned trajectory. The second graph shows agency spend analysed by staff type per month. Pay was underspent by 0.3m for Month 1. Agency spend has been incurred to cover vacancies, specialist nurses, sickness and capacity problems. Establishment remains in excess of budgeted staff numbers in Emergency and Medicine and in Surgery and MSK. Additional Sessions of 305k were paid in month 1 (ad-hoc sessions in excess of contract). This cost equates, at an average cost of 112k per annum per Consultant, to 33 full time additional consultants. With 250 budgeted Consultants this cost represents an additional 13% of whole time equivalents. More detail regarding headcount can be found in the HR report.

262 Board of Directors, 24 May 2016, Item (d) 4.2 Non Pay Expenditure Non-Pay Expenditure by Classification In Month Year To Date Full year Full year Expenditure Budget Actual Var. Budget Actual Var. Current Previous Forecast Annual Forecast Forecast Forecast Change Budget Variance m m m m m m m m m m m Clinical Supplies & Services (1.6) (1.4) 0.2 (1.6) (1.4) 0.2 (19.8) (19.8) 0.0 (19.8) 0.0 Drugs - Included (0.7) (0.9) (0.2) (0.7) (0.9) (0.2) (8.4) (8.4) 0.0 (8.4) 0.0 Drugs - Excluded (1.6) (1.3) 0.3 (1.6) (1.3) 0.3 (19.8) (19.8) 0.0 (19.8) 0.0 General Supplies & Services 0.1 (0.4) (0.5) 0.1 (0.4) (0.5) Ext. Healthcare Providers (0.7) (0.5) 0.2 (0.7) (0.5) 0.2 (9.4) (9.4) 0.0 (9.4) 0.0 Utilities, Rent and Rates (0.6) (0.6) - (0.6) (0.6) - (6.9) (6.9) 0.0 (6.9) 0.0 Estate Maintenance (0.3) (0.3) - (0.3) (0.3) - (4.0) (4.0) 0.0 (4.0) 0.0 Insurance (0.6) (0.5) 0.1 (0.6) (0.5) 0.1 (6.8) (6.8) 0.0 (6.8) 0.0 Professional Services (0.3) (0.3) - (0.3) (0.3) - (2.7) (2.7) 0.0 (2.7) 0.0 Other Non Pay Costs (0.2) (0.2) - (0.2) (0.2) - (2.7) (2.7) 0.0 (2.7) 0.0 Total Non Pay (6.5) (6.4) 0.1 (6.5) (6.4) 0.1 (78.3) (78.3) (0.0) (78.3) (0.0) The non-pay expenditure is underspent by 0.1m in month, largely due to clinical supplies and services, Drugs, General Supplies and Services and External Healthcare Providers 4.3 Technical Items Depreciation and Interest Depreciation and interest was in line with plan in the month. Restructuring, Impairment, Turnaround and Project Orange Restructuring costs were underspent by 0.1m in the month. Delivery Cost of Turnaround were underspent by 0.1m in the month. Project Orange costs were in line with plan in month. PFI support

263 Board of Directors, 24 May 2016, Item (d) The Trust has received 10m of PFI funding for 2016/17 which has been funded by NHS England. 0.8m of this has been recognised in the month 1 I&E and 9.2m deferred in the accounts. This income replaces the need for 10m of PDC funding from the Department of Health. PFI support is treated as other income. In Month Year To Date Full year Retained Surplus / Deficit Income Exp. Net Income Exp. Net Net Current Forecast Net Previous Forecast m m m m m m m m m m m Emergency & Medicine 5.6 (5.0) (5.0) MSK & Surgery & Theatres 6.9 (5.5) (5.5) Cancer Diagnostics & Clinical Support 3.6 (4.8) (1.2) 3.6 (4.8) (1.2) (15.2) (15.2) 0.0 (15.2) 0.0 Family & Public Health 3.9 (2.4) (2.4) Facilities 0.2 (2.7) (2.4) 0.2 (2.7) (2.4) (27.0) (27.0) 0.0 (27.0) 0.0 Corporate 1.6 (2.3) (0.7) 1.6 (2.3) (0.7) (12.3) (12.3) 0.0 (12.3) 0.0 Corporate - Other 0.5 (2.3) (1.8) 0.5 (2.3) (1.8) (30.2) (30.2) 0.0 (30.2) 0.0 Total 22.3 (25.0) (2.7) 22.3 (25.0) (2.7) (35.2) (35.2) (0.0) (35.2) (0.0) Forecast Change Net Annual Budget Full year Forecast Variance 5. Statement of Financial Position (SoFP) Actual a 31/03/16 Actual a 30/04/16 Ms Ms Non-current assets Property, plant and equipment Non PFI asset (finance lease) equipment PFI asset (finance lease) building PFI asset (finance lease) equipment Trade and other receivables M1 programme for asset replacement (PFI) Total non-current assets Current assets Inventories Trade and other receivables Cash and cash equivalents Total current assets Current liabilities Trade and other payables (31.7) (33.6) PFI payable, amount due by 31/03/2017 (9.7) (9.7) Non PFI payable, amount due by 31/03/2017 (0.1) (0.1) Provisions (0.7) (0.8) Tax payable 0.0 (3.6) Loan current (0.4) (0.4) Deferred income (1.7) (10.8) Total current liabilities (44.5) (59.1) Total assets less current liabilities Non-current liabilities Trade and other payables (0.3) (0.3) PFI payable, amount due after 31/03/2017 (357.0) (356.2) Non PFI payable, amount due after 31/03/2017 (0.2) (0.2) Long Term Loan (18.3) (18.3) Provisions (1.8) (1.8) Total non-current liabilities (377.5) (376.7) Total assets employed Financed by (taxpayers' equity) Public Dividend Capital Revaluation reserve Income and expenditure reserve (326.9) (329.6) Total taxpayers' equity Key movements in the Statement of Financial Position:

264 Board of Directors, 24 May 2016, Item (d) Cash has increased due to receipt of 10m PFI support income from NHS England Trade payables and receivables have increased due to the timing of invoices. Deferred income increased as 10m PFI support mentioned above is taken to the I&E in equal instalments across the year ( 9.2m is, therefore, deferred in month 1) 6. CIP Programme CIP delivery at month 1 amounted to 0.073m against a plan of 0.750m. The CIP Programme report provides further detailed information is available. 7. Key financial risks to budget Risk Description Detail Estimated Value CIP delivery The CIP plan for the year is short of the 6.6m required achievement for the financial year Operational penalties Operational penalties have been budgeted at 2.5m. Demand issues beyond the Trust s control continue to impact on the level of penalties incurred. 3.5m (based on M1 run rate) 8. Tenders and AQPs No New Tenders have been issued which impact on the Trust. University Hospitals of Leicester Renal bid. UHLT Executive Management Team has awarded this contract to the Trust. The final contract value has yet to be signed.

265 Board of Directors, 24 May 2016, Item (e) Workforce and Organisational Development Report Presented for: Presented by: Scrutinised by: Discussion Ian Crich, Director of Workforce and OD Trust Management Board 20 May 2016 Strategic objective: Date: 16 May 2016 Regulatory relevance: NHS Constitution delivery: Equality and Diversity: Freedom of Information Release: Recruiting, developing and retaining our workforce Deliver the organisational strategy CQC Fundamental Standards: Staffing (reg 18), Fit and proper persons employed (reg19) Staff: All requirements This report covers services and individuals equally and there are no specific equality and diversity issues for consideration This report can be released under the Freedom of information Act 2000 Summary This report provides an update on the development and delivery of the priority Workforce and Organisational Development objectives and includes operational performance measures used to monitor and improve performance in these areas. Board Assurance Framework Context This report details the activity and progress to deliver the strategic objectives of recruiting, developing and retaining our workforce and deliver the organisational strategy. Key Points for Decision and Discussion The key priorities featured this month to support the on-going delivery and development of work-streams to increase employee satisfaction and workforce productivity. Action required from the Board of Directors The Board is asked to note the report, provide input on any areas requiring further improvement and to support the on-going delivery of the workforce and organisational development strategy The following papers make up this report Workforce and Organisational Development Report Page 1 of 4

266 Board of Directors, 24 May 2016, Item (e) WORKFORCE PERFORMANCE AND UTILISATION The establishment table was first presented in May 2015 and is updated monthly by Finance and HR. With the start of the new financial year and a revised budget setting process for 2016/17 the WTE has been reviewed and adjusted in line with business plans. The establishment table has been refreshed and enhanced accordingly and will be presented in next month s workforce report. Recruitment Doctor Recruitment Consultants in Urology and Paediatrics started in April and a Consultant in Haematology started in May. There are 10 Consultants starting in post over the next 3 months, including 2 in Radiology, 2 in Acute Medicine and 4 in Emergency Department. In early May a team travelled to Belfast to exhibit at a specialist conference and attracted interest from potential recruits. We continue to work closely with the Directorates to find innovative ways of attracting to the Trust and reduce our reliance on expensive temporary staff. Nurse Recruitment 25 nurses joined us in April, 15 of which are international nurses from the EU and the Philippines. A team of four travelled to India on 13 May to recruit 60 nurses, the majority of which will be appointed to Theatres and ED. The next EU event, of skype and face to face interviews, takes place on 1 st June. Two additional Education Facilitators have been appointed to support the international nurse workforce. Sickness Absence Thresholds: green <3.5, red > % Sickness absence information is reported two months in arrears due to the nature of the reporting and validation processes. The sickness absence rate for March has reduced further to 3.37% this month. We continue to perform well and exceed the upper quartile for both our peers and nationally. Turnover Thresholds: green <10%, red >12% 11.37% The downward trend of turnover over the previous 17 months continues. The joiner rate has been consistently higher than the leaver rate thus improving turnover with the filling of vacant posts and a reduced number of leavers. The national measures for reporting turnover of joiner rate, leaver rate and stability index are presented below to which we compare favourably. Measure Trust National Rate Definition Rate (Jan 16) Joiner rate 15.73% 17.48% Number of joiners divided by the average number of staff in the last 12 months Page 2 of 4

267 Board of Directors, 24 May 2016, Item (e) Leaver rate 13.46% 14.04% Number of leavers divided by the average number of staff in the last 12 months Stability index 86% 85.71% Number of staff present at the start and the end of the 12 month period, divided by the number of staff present at the start of the period My Performance Appraisal (MPA) 93% The percentage of staff who have received an appraisal at the end of April is 93%, an increase of 20 percentage points over the previous 12 months. The expectation is for every member of staff to receive an appraisal each year and the momentum must continue to ensure we achieve this goal. MANDATORY TRAINING Mandatory Training Reporting 92% The Trust has maintained 92% for overall compliance in April, the Corporate Directorate achieved 96% and all other Directorates over 90%. The trust target for 2016/17 is 95%. Top 5 Competencies HCA Induction 100% Hand Hygiene 99% Hand Hygiene 3 year 99% Information Governance - Overview 99% Safeguarding Children Level 1 - No Renewal 99% Highest % Competency Increase Hand Hygiene 1 year up 27% 69% Highest % Directorate Compliance Corporate 96% Lowest % Directorate Compliance Medicine & ED 90% ORGANISATIONAL DEVELOPMENT PROGRAMME Following a comprehensive series of listening events held with over 400 staff during the autumn and winter, work has now been completed to establish 5 clear (but linked) streams of work under an overarching whole Trust Organisational Development programme. These have been established directly from the material generated by staff which set out their top 10 issues for each area. Building upon the highly significant and positive outcome of last year s CQC inspection, where the Trust was rated overall as Good, a recommendation was made by staff that the new programme should build upon that and be called Good to Outstanding to reflect the desire in the Trust to further improve and by doing so create an organisation which can ultimately receive the CQC s highest rating. To reflect this ambition to move towards an outstanding organisation, the titles of the 5 streams of work have been agreed as follows: Outstanding Patient Care and Experience Outstanding Leadership Page 3 of 4

268 Board of Directors, 24 May 2016, Item (e) Outstanding Services Outstanding Conversations (communications and engagement) Outstanding People (values and behaviours) Each work stream will be led by an Executive Director and the programme overall is being led and overseen by a Programme Board, chaired by the Chief Executive; and on which the Chairman of the Trust is a key member. The Programme Board will steer the overall programme, ensure progress is made against each of the work streams and will consider and allocate the resources required for the Programme to be successfully delivered. The Programme Board has met twice to date and at its latest meeting approved, for each work stream, a vision, key objectives and the programme of deliverables for 2016/17. The Programme Board has also agreed the overall communications plan for the programme. As one element of this, the Programme Board has agreed the key promotional materials and marketing logo for the programme (which is presented below). Colours in the logo are taken directly from those used consistently to promote Trust values of Caring, Creative, Community, with the green arrow indicating a positive progression from Good (G) to Outstanding (O). Further, the logo is deliberately created in the form of a smiley face to reflect positive and optimistic intent behind the programme as a whole. It is planned to launch the Good to Outstanding programme (G2O) to staff on June 6th 2016 through a range of media but primarily around the publication of a special G2O edition of Pulse which will set out the overall aims of the programme and also the vision, objectives and deliverables for 2016/17 for each stream of work. Of course, given the key item on today s Board agenda with regard to further possible collaboration with Hinchingbrooke, the question may be raised as to whether the launch of this G2O programme should be delayed until a final decision is taken in that respect. Clearly, should that merger go ahead, a vital stream of activity will be to consider how the two organisations can be brought together culturally. However, given the investment already made into the process by our staff and their legitimate expectations that as a result of their feedback actions will be taken, it is not felt to be appropriate to delay the launch of the G2O programme. Additionally, much of the work planned for 2016/17 will need to be progressed whether or not a merger goes ahead (e.g. improving communications, improving leadership development provision etc.). It is also worthy of note that a complimentary programme of exploring similar issues with staff at Hinchingbrooke has recently got underway and again, this should be allowed to continue and flourish in the meantime, i.e. in advance of a final decision on whether the organisations will merge or not is taken. In the lead up to that final decision, work will be completed to set out how these two key, but separate, organisational development initiatives can be brought together going forward. Page 4 of 4

269 Board of Directors, 24 May 2016, Item (f) Governance Report Presented for: Presented by: Scrutinised by: Strategic objective: Approval Jane Pigg, Company Secretary Not applicable Deliver the Organisational Strategy Date: 12 May 2016 Regulatory relevance: NHS Constitution delivery: Equality and Diversity: Freedom of Information Release: NHS Improvement (Monitor) Licence: Foundation Trust Governance (FT 4) not applicable This report covers services and individuals equally and there are no specific equality and diversity issues for consideration This report can be released under the Freedom of Information Act Introduction This report sets out current regulatory and committee report issues. The Board are asked to consider and/or approve items as noted below: Governance and regulatory performance indicators; Board Assurance Framework update; Committee report; Enforcement Notice update; Monitor (NHS Improvement) self-certification. 2. Governance and Regulatory Performance Indicators 2016/17 Table 1 below shows the selected performance indicators. 21 internal audit reports have been finalised. Page 1 of 13

270 Board of Directors, 24 May 2016, Item (f) Table 1: Governance and Regulatory Performance Indicators Indicator Internal Audit substantial and full assurance Internal Audit outstanding As at 30 Apr 16 Target (Green) 73% 80% 8 0 recommendations Clinical policies within review date 93% 90% Non-clinical policies within review date 74% 90% Commentary Monitored through Audit Committee. Each audit has an executive lead. 85% achieved 2014/15. Figures are for 2015/16 audits, no 2016/17 audits yet complete Monitored through Audit Committee and at Executive Directors. Monitored through Quality Governance Operational Committee. All policies have an executive lead. Last month was 92% Monitored through Trust Management Board. All policies have an executive lead. Last month was 74%. The Board of Directors is asked to note performance against current indicators 3. Board Assurance Framework Update The Board Assurance Framework is presented against the agreed objectives of the Trust s annual plan for 2016/17. Appendix 1 shows the draft BAF for 2016/17 which includes thresholds for associated RAG ratings. These thresholds were discussed and agreed by Executive Directors on 4 May The framework is in line with monitoring arrangements used by the Care Quality Directorate to report against agreed objectives. Each objective is underpinned by a number of measures. A number of measures are subject to the confirmation of capital funding allocation with a further two measures awaiting the development of RAG thresholds. In month progress towards achieving specific measures aligned to each objective is highlighted by the use of a RAG rating. Progress is assessed each month with comment included in the relevant Director s Board report if required. A review of specific controls, assurances and gaps (in controls or assurance) is undertaken on a monthly basis. As part of this year s process, a review of the Trust risk register was undertaken focusing on high and significant risks that were aligned to the 2016/17 objectives. A number of gaps were identified and work is ongoing to develop risks where required. As in previous year s a table will be included in the governance Board report which will outline those objectives where a change to the RAG rating has been proposed by Executive Directors. There is an expectation that progress towards specific objectives will have already been discussed as follows: Objective Board Paper 1. Deliver quality of care standards Quality Report 2. Recruiting, developing and retaining our workforce Workforce and Organisational Development Report 3. Develop or capacity and infrastructure Operations Report 4. Deliver the finance plan Finance Report 5. Deliver the organisational strategy CEO Report and associated papers Page 2 of 13

271 Board of Directors, 24 May 2016, Item (f) A number of strategic concerns were identified by the Trust Board in 2015, and discussion was held in year regarding aligning these with the BAF process. It is proposed that strategic concerns are refreshed at a Board session. This would enable any concerns to be aligned with the BAF, and be more prescriptive in terms of risk providing a more rounded framework. It is further proposed that the Board separately considers overarching high and significant risks for the Trust that could be aligned to the identified concerns. These will then be added to strategic risks allowing for mitigating actions to be monitored. The Board of Directors is asked to approve the 2016/17 BAF and the above process for reporting during 2016/ Committee Report Attached at appendix 2 is the standard committee report that shows the key elements for each Board committee. Feedback from the committees is integrated into the reports from the executive directors as appropriate. The Board is asked to consider feedback from the Chairman of the Audit Committee as appropriate. The Board of Directors is asked to note the arrangements for Board Committees, and to take any feedback as appropriate. 5. NHS Improvement Enforcement Notice Compliance Appendix 3 sets out the current enforcement requirements and progress being made to ensure that they are delivered. Progress is reviewed on a monthly basis with NHS Improvement (Monitor) at Performance Review Meetings. The Board of Directors is asked to note current progress. 6. NHS Improvement (Monitor) Self-Certification As part of Monitor s self-certification requirements (that are continuing under NHS Improvement), the Board is required to provide a series of self-certifications (see appendix 4). The Trust s systems of compliance with licence conditions are the subject of the certificate required for this month. The Trust has a system of reviewing the condition undertaken internally and supplemented by the enforcement requirements noted above. It is proposed that the Trust confirm compliance. The Board of Directors is asked to approve compliance. Paul Denton Deputy Company Secretary 16 May 2016 Page 3 of 13

272 Board of Directors, 24 May 2016, Item (f) Board Assurance Framework 2016/17 Appendix 1 Responsibility Ref Measure Frequency Thresholds of May reporting Red Amber Green Deliver quality of care standards Med Dir Chief Nurse Chief Nurse 1a 1b 1c Upper quartile Hospital Standardised Mortality Rate (HSMR) for all trusts nationally Quarterly minimum 90% compliance with documentation audit by all directorates 90% of complaints responded to within 30 days or timeframe agreed with complainant Med Dir 1d Year on year increase in the number of patients in clinical trials by 10% Achieve the standards in the NHS COO / Improvement Compliance 1e Chief Nurse Framework including A&E four hour target Recruiting, developing and retaining our workforce Chief Nurse Dir W&OD Chief Nurse Dir W&OD 2a 2b 2c 2d 85% of adult inpatient wards 90% registered nurse fill rate on days and nights Trust vacancy factor 5% by March % retention of nursing students commissioned through Health Education England (HEE) Deliver first year of the trust OD programme Quarterly 35% or less 36% to 49% >50% Quarterly <80% compliance with documentation audit by all Directorates 80%-89% compliance with documentation audit by all Directorates 90% compliance with documentation audit by all Directorates Monthly <75% between 76%-90% >90% G Quarterly 1% or less between 2%-9% 10% R Monthly Targets and indicators are set out in the Risk Assessment Framework (RAF) - definitions per RAF Appendix A Monthly 17 wards or less 18 wards >19 wards G Monthly Biannually Quarterly No robust plans in place to deliver Trust vacancy factor 5% by 31/03/17 Evidence of action plans in place giving confidence that Trust vacancy factor will be 5% by 31/03/17 Strong level of confidence that Trust vacancy factor will be by 31/03/17 50% or less 51% to 69% >70% G Under development. Draft plan in place. RAG rating to be agreed by Organisational Development Programme Board Monthly Performance RAG Rating A G G A TBA Page 4 of 13

273 Responsibility Ref Measure Frequency of reporting Board of Directors, 24 May 2016, Item (f) Thresholds May Red Amber Green Med Dir 2e East of England top quartile doctor satisfaction with training Annually No plan in place to maintain and improve satisfaction with training Evidence of clear action designed to maintain and improve satisfaction with training Confirmation of East of England top quartile satisfaction with training R Dir W&OD 2f Staff engagement score of 3.82 in the national survey Annually No plan in place to maintain and improve employee engagement Evidence of clear action designed to maintain and improve employee engagement Confirmation of staff engagement score of 3.82 in 2016 National Staff Survey A Develop our capacity and infrastructure Com Sec 3a New radiotherapy unit operational Monthly COO CEO 3b 3c Implement elective care transformation plan 2016/17 priorities Achieve investment in critical infrastructure at Stamford Hospital Quarterly Quarterly Dir W&OD 3d Increase capacity by 12 beds* Quarterly Greater than four weeks behind plan (or no plan in place) Up to four weeks behind plan (plan in place) On plan Under development. 4 initial priorities in place. RAG rating to be agreed. Subject to confirmation of capital allocation Subject to confirmation of capital allocation Monthly Performance RAG Rating G TBA TBA TBA CEO 3e Patient administration system replacement underway* Quarterly Subject to confirmation of capital allocation TBA Dir W&OD 3f Fire safety enforcement delivered in line with Cambs Fire and Rescue requirements Quarterly Significant failure to maintain progress with remedial works in line with project plan Minor slippage in completion against agreed project plan with evidence of action plan to address slippage Remedial works completed in line with agreed project plan A Page 5 of 13

274 Responsibility Ref Measure Frequency of reporting Deliver the finance plan Fin Dir COO 4a 4b Deliver the organisational strategy CEO CEO CEO 5a 5b 5c Year on year reduction in our deficit from 38.8m in FY16 to 35.2m in FY17* Cost improvement programme (CIP) of 13m with a focus on reducing agency expenditure to 14.15m LHE sustainability and transformation plan submitted by the end of June 2016 Hinchingbrooke hospital collaboration business case by the end of May 2016 and implement recommendations Greater collaboration with Lincs including Stamford GP s and Lincolnshire sustainable service plan Monthly Monthly Monthly Monthly Quarterly Board of Directors, 24 May 2016, Item (f) Thresholds Red Amber Green No robust plans in place to deliver 35.2m deficit No robust plans in place to deliver CIP Greater than four weeks behind plan (or no plan in place) Greater than four weeks behind plan (or no plan in place) No progress with planned collaboration Evidence of action plans in place with a high level of confidence of delivering 35.2m deficit Evidence of action plans in place with a high level of confidence of delivering CIP Up to four weeks behind plan (plan in place) Up to four weeks behind plan (plan in place) Evidence of clear action regarding collaboration Strong level of confidence that FOT for 2016/17 is 35.2m Strong level of confidence that CIP will be delivered for 2016/17 On plan On plan Strong level of confidence that collaboration has been established or agreed that no collaboration plan required Monthly Performance RAG Rating May R R G G A *subject to available capital Page 6 of 13

275 Board of Directors, 24 May 2016, Item (f) Appendix 2 Board of Directors Committees Summary Report to the Trust Board of Directors May 2016 The table below shows standing Board of Directors committees. The Charitable Funds Committee is a committee of the Trustees of the Charitable Funds the Board of Directors performs the role of the Corporate Trustee. Chairman of the committees are asked to report back as appropriate. Audit Committee Remuneration Committee Quality Assurance Committee Finance and Investment Committee Strategic Planning Committee Charitable Funds Committee PCH PFI Assurance Committee Chair Mr Beeton / Mr Hughes Mrs Dunnett Mr Arnott Mr Graves Mrs Dunnett Mr Hughes Mr Ellwood* Date of Last Meeting 12 May Apr May May May Feb Mar 2016 Issues and Agreed Actions Date of Next Meeting Terms of Reference: Board Approval Deadline for Review Issues reported back as appropriate as part of Governance Report Committee to report to nonexecutive directors as appropriate Current committee Issues to be reported as part of Quality Report Committee report includes items in conjunction with the Finance report Updates provided under CEO report Issues reported to the Trustees Issues reported as appropriate 07 Jul May Jun Jun Jul Sep Jun Jul Oct Feb Aug Dec June Dec 2015 May 2016 Sep 2017 Feb 2017 May 2016 Feb 2017 Nov 2017 Dec 2017 *Mr Ellwood is to take over the chairmanship of this committee from the end of May Page 7 of 13

276 Board of Directors, 24 May 2016, Item (f) Enforcement Action Compliance Enforcement Notice Dated 29 July 2015 Appendix 3 Ref Enforcement Requirement Timeline Action Taken 1. Financial Sustainability The Trust will continue to identify, plan for and deliver 1.1 relevant strategies to seek to maximise utilisation of its estate. Working with Monitor, local and national partners, the Trust will develop a strategic sustainability plan setting out strategies through which it will minimise reliance on DH financial support. Working with Monitor and in consultation with local and national partners the Trust will agree a clear timetable for delivering the strategic sustainability plan. When developing and delivering the strategic sustainability plan, the Trust will attend and constructively participate in relevant forums in order to enable engagement in delivering system reconfiguration and developing cross-local healthcare system efficiency savings. The Trust will agree certain milestones with Monitor that are to be incorporated into the strategic sustainability plan The Trust will ensure it has adequate capacity and capability to develop and deliver the strategic sustainability plan. If the Trust is not able to ensure adequate capacity and capability to develop and deliver the strategic sustainability plan it will obtain external support from a source and according to a scope and timing to be agreed with Monitor. The Trust will keep the strategic sustainability plan under review. The Trust will also agree with Monitor any necessary amendments to the strategic sustainability plan where need is identified. The Trust will provide Monitor with monthly updates about the development and delivery of the strategic sustainability plan in accordance with its reporting obligations. Ongoing Ongoing Ongoing Ongoing Ongoing Ongoing Ongoing Ongoing See 5.1 Page 8 of 13 Discussions ongoing with local health economy Draft outline shared with Monitor Ongoing discussions with Monitor to refine timescales and content Trust has identified team to participate in discussions as well as executive team engagement in local health economy discussions Current agreed milestones met Trust has identified team to lead strategic sustainability plan Current team has capacity for current requirements Ongoing review at Strategic Planning Cttee Ongoing at monthly reviews and interim discussions Monitored by Strategic Planning Cttee Strategic Planning Cttee Monitor PRMs Monitor PRMs Monitor PRMs Strategic Planning Cttee Strategic Planning Cttee Strategic Planning Cttee Monitor PRMs RAG G G G G G G G G G

277 Enforcement Action Compliance Enforcement Notice Dated 29 July 2015 Board of Directors, 24 May 2016, Item (f) Ref Enforcement Requirement Timeline Action Taken The Trust will deliver its planned Cost Improvement Programme (CIP) that will achieve recurrent savings of at least 13m in 2015/16. The Trust will agree CIP targets with Monitor for subsequent financial years by 31 March in the proceeding year. The Trust will report against milestones and KPIs for the CIP programme which are designed to ensure that material deviations from the CIP can be identified and addressed recurrently within the financial year of the programme. Working with Monitor, if required, the Trust will redraft and resubmit its 2015/16 financial plan to Monitor on a date to be agreed with Monitor. The Trust agrees to co-operate and work with Monitor to provide assurance on the Trust's development and delivery of the 2015/16 financial plan and the 2016/17 financial plan. The Trust will ensure monitor or Monitor's representative is provided with access to such resources and support as Monitor considers necessary and reasonable for the fulfilment of their role. The Trust will, with oversight from Monitor, develop and deliver a financial plan for the 2016/17 financial year to be submitted to Monitor on a date to be agreed with Monitor. The Trust will develop and demonstrate it can deliver realistic and robust long term financial plans for subsequent years. The Trust will submit subsequent financial plans at dates to be agreed with Monitor. 31 Mar 16 Ongoing Monthly Cost Improvement Programme Board monitors deliver with overview by Finance and Investment Committee. 2015/16 Delivered Aligns with planning requirements Established monitoring already in place TBA Will submit if required Ongoing Ongoing Ongoing Will co-operate as required To be completed in line with Monitor guidance Plans to be submitted as required Monitored by Finance & Investment Cttee Finance & Investment Cttee Finance & Investment Cttee Finance & Investment Cttee Monitor PRMs Finance & Investment Cttee Finance & Investment Cttee RAG G G G G G G G If required by Monitor, the Trust will obtain external support from a source and according to a scope and timing to be agreed with Monitor to develop and deliver the 2015/16 and 2016/17 financial plans and financial plans for subsequent years. Ongoing Agreed Strategic Planning Cttee G Page 9 of 13

278 Enforcement Action Compliance Enforcement Notice Dated 29 July 2015 Board of Directors, 24 May 2016, Item (f) Ref Enforcement Requirement Timeline Action Taken 2. Target Breaches The Trust will undertake all steps within its control in order 2.1 to achieve sustainable compliance with the four-hour A&E target. The Trust will work with system partners to implement the A&E action plan originally submitted to Monitor in March Provide a monthly report on progress against the actions and performance against the KPIs in the action plan. If required by Monitor, obtain external assurance from a source and according to a scope and timing to be agreed with Monitor, that the action plan has been appropriately implemented. Keep the action plan under review. Where matters are identified which materially affect the Trust's ability to meet the requirements of paragraph 2, whether identified by the Trust, Monitor or another party, the Trust will notify Monitor as soon as practicable and update and resubmit the action plan. The Trust will monitor its progress in implementing the action plan and it will report this at its Progress Review 2.2 Meetings with Monitor. The Trust will also agree with monitor any necessary amendments to the plan where such amendments are needed. 3. Department of Health Financing Where interim support financing or planned term support financing is provided by the Secretary of State for Health to 3.1 the Trust pursuant to section 40 of the NHS Act 2006, the Trust will comply with any terms and conditions which attach to the financing. The Trust will comply with any reporting requests made by Monitor in relation to any financing provided or to be 3.2 provided to the Trust by the Secretary of State for Health pursuant to section 40 of the NHS Act Ongoing Urgent Care Plan actions Ongoing Ongoing work with partners on their actions in urgent care plan Monthly Monthly reporting in place Ongoing Ongoing Ongoing Will obtain external assurance as required Plan undergoes updates with new items from lessons learnt Monthly reporting in place Ongoing Board resolution agreed Ongoing Will comply as required Monitored by Urgent Care Steering Grp Urgent Care Steering Grp Urgent Care Steering Grp Urgent Care Steering Grp Urgent Care Steering Grp Monitor PRMs Board of Directors Board of Directors RAG A G G G G G G G Page 10 of 13

279 Enforcement Action Compliance Enforcement Notice Dated 29 July 2015 Board of Directors, 24 May 2016, Item (f) Ref Enforcement Requirement Timeline Action Taken 3.3 The Trust will comply with any spending approvals that are deemed necessary by Monitor. 4. Reporting The Trust will submit progress reports to Monitor against all of the plans referred to in these undertakings on a monthly basis (or otherwise as required) and by exception until such 4.1 date as agreed with Monitor. The progress reports will identify any deviation from the actions and associated timeframes for delivery of the plans. 5. Meetings The Trust will continue to attend meetings (or if Monitor stipulates, conference calls) with Monitor during the currency of the undertakings to discuss its progress in 5.1 meeting the undertakings. These meetings shall take place once a month unless Monitor otherwise stipulates, at a time and place to be specified by Monitor and with attendees specified by Monitor. Ongoing Will comply as required. Requirements regarding agency spending are currently being reviewed. Monthly Progress reports submitted monthly Monthly Meetings attended and scheduled Monitored by Finance & Investment Cttee Monitor PRMs Monitor PRMs RAG G G G Page 11 of 13

280 Board of Directors, 24 May 2016, Item (f) Appendix 4 Page 12 of 13

281 Page 13 of 13 Board of Directors, 24 May 2016, Item (f)