Annual Report and Accounts2015/16

3

Performance report

Foreword 3

A few memorable moments from 2015/16 5

Calendar – a snapshot of our year 8

Performance analysis 14

Accountability report 23

Members’ report 23

Statement of accountable officer’s responsibilities 25

Governance statement 27

Remuneration report 55

Staff and Membership 61

Financial Statements 69

Contents

Mike Maguirechief officer

Foreword

Welcome to our 2015/16 Annual Report. Looking back at the foreword we wrote together last year, we talked a bit about building foundations and highlighted the importance of integration.

This year has been just that – we have focused on integrating care and on further integrating the CCG with our local partner organisations and stakeholders.

In terms of the year ahead, transformation is what it is all about. This is transformation that improves outcomes, transformation that improves quality and transformation that brings greater clinical and financial sustainability. Our community health services re-procurement (which includes some elements of urgent care services) echoes this move towards transformation. We have listened to our community tell us they would like a more active role in their own healthcare, tell us they would like to visit hospital less and instead access more care closer to home; and importantly they tell us the system is complicated, fragmented and could be so much more joined up. These points are only a few examples of what we have heard and listened to, but this vision for joined up care that we call Building for the Future (available via our dedicated web page http://www.westlancashireccg.nhs.uk/have-your-say/community-health-services/) is about us moving towards new models of care for the benefit of everyone in West Lancashire.

Our journey shows real promise for driving forward real improvements for our local community, but to do this our re-procurement process and all of our priorities need to remain collaborative at their core. We take our stakeholder engagement very seriously, we know we have a duty as a public body to be transparent and open with our partners and those outside of our organisation.

We are confident we have met those statutory obligations and as always, continue to welcome views and questions from anyone with an interest in our commissioning and the surrounding processes. The web link above has several resources available to explain the work we are doing with community health services – for those without access to the internet these are also available on request via any of our CCG contact details.

As we look back on 2015/16, we would like to give a special thank you to Dr Simon Frampton and Dr Ros Bonsor who will both be stepping down from their roles as GP clinical leads for the CCG. And as we look to the year ahead, we would like to welcome two local GPs, Dr Rakesh Jaidka and Dr Vikul Mittal, who will be joining us. This clinical input into our commissioning provides insight, expertise and passion, and continues to be beyond valuable to the CCG.

Finally, we would like to reiterate the hope we have for the year ahead. Our Strategic Transformation Plan 2016/17 (published on our website under the resources tab) clearly shows our precise plans for the year ahead. We trust this plan will help everyone understand our direction of travel. Yes, there will be challenges and yes there will be changes in the form of transformation but by communicating, striving for something better and working closely together, we can achieve improved health and wellbeing for West Lancashire.

Dr John Cainechair

54

Some of our highlights

There is and always will be plenty more progress to be made, but below are just some of the things we have been up to this year.

Well Skelmersdale This year we successfully showcased our commitment to reducing health inequalities by working hard to ensure Skelmersdale was selected as a pathfinder for the Well North programme. Well North aims to transform communities and reduce health inequalities by empowering and mobilising local communities.

Our selection to become a Well Skelmersdale, comes not only after hard work by our CCG, but is the result of true collaboration, dedication and the belief in striving for something more. Our partners are literally too many to name but it is because of committed partners and importantly community champions and local people that we are about to embark on this exciting journey towards a healthier Skelmersdale.

Rally RoundWe worked with West Lancashire CVS (Council of Voluntary Services) to fund Rally Round locally in West Lancashire. Rally Round is an online platform which allows anyone to create a support network for themselves or someone who needs help. It manages and logs day to day tasks on a to do list and allows for the support network around an individual to network with each other through texts and notifications. Rally Round allows anyone to help themselves or another they care for to live a better life.

For more information, please visit www.rallyroundme.com/wlcvs

Move MoreAs part of our Macmillan project (mentioned in last year’s annual report), we launched a fitness programme to help people living with and beyond cancer become more active. A joint initiative between the CCG, Macmillan Cancer Support and Southport and Ormskirk Hospital NHS Trust, Move More helps people with a diagnosis of cancer to find effective ways to stay active, no matter where they are on their cancer journey, including those who have since completed treatment.Move More offers individually tailored activity programmes and sets personal goals which have a lasting impact on well-being. People can work on their fitness individually or in a group setting. Classes take place weekly in the physiotherapy department at Ormskirk Hospital.

6 76

Neighbourhood learningWe teamed up with Edge Hill University to deliver four half day workshops aimed at supporting everyone to build inner strength to meet their challenges of life, and support others to do the same. With an initial focus on anyone living and working in Skelmersdale, these workshops were offered free of charge and looked at issues such as: understanding resilience, the importance of ‘you’ and addressing how to connect with those who are isolated in a community.

The workshops were offered in a fun and practical way with a focus on everyone’s own needs, building upon whatever motivates them and supporting learning through sharing ideas. This is a great collaborative initiative that works at the heart of our communities. We are hoping to run similar workshops in the future.

Musculoskeletal (MSK)Our work on MSK progressed considerably in 2015/16, with a stakeholder wide visioning event taking place in July 2015. This day kick started our collaboration service redesign work alongside NHS Southport & Formby CCG.

Just some of the issues we are addressing include:- Primary care education to upskill

local GPs and practice staff e.g. using a simple tool to match patients to treatment packages appropriate for them.

- Reviewing current nerve conduction studies service with the aim of commissioning local services in the future.

- Provide a single point of access for MSK issues/conditions.

- Introduce patient self referral into MSK services - allowing patients to call the service to discuss their problem with a clinician and be offered advice/referral on or treatment.

- Commission new website focused on MSK and complex pain, providing accessible information to encourage self-care among patients and the local community.

- Develop clinical pathways with local GPs and MSK specialists.

- If a surgical opinion is required, the patient/carer will be offered choice of which hospital they want to attend.

- Continue to engage with all stakeholders; considering the needs of people from protected groups as set out in the Equality Act 2010.

Community health services procurementAll NHS contracts are awarded for a specified period of time. This ensures that services are continually reviewed to ensure they offer patients the best possible care. Ahead of a contract’s expiry date, commissioners are obliged to review and where appropriate to retender those services so they can be assured that healthcare services are the best they can be for the populations they serve.

Following a stringent process and assessing all of the information available to us, in July 2015, the CCG governing body made the decision to test the market for community health services by going out to procurement. This process included some elements of urgent care services such as walk-in centres, the Acute Visiting Service and GP out of hours. The provider will begin the new contract in April 2017.

For more information, please visit our website: www.westlancashireccg.nhs.uk/have-your-say/community-health-services/

Why do we need to change at all?• Our society is ageing and that means there

are greater health and social care needs (the number of over 85 year olds expected to double over the next 20 years)

• More people are living longer with more complex illnesses, long term conditions (such as diabetes and dementia) and disability, including children and young people

• The cost of drugs and new medical technology is always rising

• The impact of a rapidly changing world and pace of life is affecting our mental health

• We need to make it fair and tackle any differences in access to care that exist based on where you live or your social circumstances

• Resources are reducing so we need to use what money we have carefully so we have a positive impact on our community and our health

The diagram opposite shows what we are trying to make happen

Facing the Future Together • NHS West Lancashire CCG 5MEDICAL TEAMS

Patients and carersWITH A PERSONAL CARE PLAN

IN PLACE FOR THEM

Joined up care in West Lancashire

SOCIAL CARE

COM

MUNIT

Y AND VOLUNTARY GROUPS

COMMUNITY SERVICES

Timings

We follow a set of timeframes which align to national procurement law and process. Following shortlisting of all potential bidders who submitted a pre-qualification questionnaire, the milestones of this process are:

- Invitation to participate in dialogue: (ITPD) 17th Feb 2016

- Dialogue Discussions: Mar – Jul 2016

- Invitation to submit final tender (ISFT): Aug 2016

- Contract awarded: Sept 2016

- Mobilisation: Sept - 31st Mar 2017

- Go Live: 1st Apr 2017

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Calendar: a snapshot of our yearThere is so much to talk about from 2015/16, the calendar below showcases just a small sample of what happened.

April July

August

Community health services procurement – following our statutory duties and obligations while adhering to national procurement legislation, the CCG board made the decision to re-procure the community health services contract, which includes some local urgent care services.

The Seven Wards report – the CCG and Lancashire County Council produced a report detailing a picture of Skelmersdale in terms of smoking rates, levels of deprivation etc. This was a key starting point of our Well Skelmersdale project.

Care Homes and medication – we worked with care homes and GPs to review patients medication, checking they are all appropriate and checking all monitoring is up to date.

Third sector event - joint event/AGM held with West Lancashire CVS highlighting our vision for joined up care and our work so far relating to Facing the Future Together.

Bidder day – as part of our community health services re-procurement, we hosted our first bidder day with attendees from potential bidder, third sector, partner organisations and patient/public representatives. This was in line with our competitive dialogue process.

Patient Experience Group – our new internal steering group for patient experience met for the first time to agree the focus for the year ahead. Representatives from Healthwatch, primary care and West Lancashire CVS are also in attendance.

Community paramedic – a new community paramedic started working with volunteers training them up as first aiders. The paramedic also works with practices and care homes to improve pathways for urgent care.

Stroke Awareness Month Make May Purple – just one of a number of health campaigns the CCG supported throughout the year.

May

Public involvement – public drop-in listening events held in our five localities calling for views on community health services.

E-referrals - moved from using choose and book to an e-referral system. GPs can book there and then in the patient’s appointment or a patient can book themselves. This streamlines the process in a number of ways and promotes patient choice. There are more than 75% of referrals going through the e-referral system.

NHS West Lancashire CCG, Hilldale, Wigan Road, Ormskirk, L39 2JW

01695 588 000myview@westlancashireccg.nhs.uk

www.westlancashireccg.nhs.uk @WestLancsCCG

INVITATION TO: NHS public eventThe NHS in West Lancashire would like to hear your views on local community health services. Whether it’s a complaint, a story about your experiences or an idea for improvement. By ‘community health services’, we mean anything outside

of hospital, for example – GPs, district nurses and community matrons, mental health services, podiatry, dieticians, physiotherapists, occupational therapists etc.

You can share your views on the day with senior representatives from NHS West Lancashire Clinical Commissioning Group, Lancashire Care NHS Foundation Trust, and Southport and Ormskirk Hospital NHS Trust.

The events are informal, and you can speak to us privately and confidentially.

Please come along to any of the following events at a time/location to suit you:

Wednesday 24 June

Upholland Library 2-4pm

Friday 26 June

Tarleton Library 10am-12pm

Monday 29 June

Skelmersdale Library 2-4pm

Thursday 2 July

Parbold Library 2-4pm

Wednesday 8 July

Brookside, Ormskirk6-8pm

June September

October February

Conversations with the community – we attended several meetings with community groups, such as University of The Third Age and Luncheon Clubs, who were invited to share views on community health services.

NHS 111 - NHS 111 went live in October 2015. This means that patients have access to medical advice 24/7 and will be sent to the most appropriate service following telephone triage. In West Lancashire, there is an additional clinical triage in place for additional patient safety.

Care home event - joint care home event held with NHS Southport and Formby CCG. The event focused on end of life and frailty, with the objective of improving working relationships.

Invitation to Participate in Dialogue announcements – we announced those providers who have been invited to have further dialogue with us about delivering community health services locally.

Lean management – a new internal lean management scheme began to help us work more efficiently.

November

Medication review clinics – we held face to face medication reviews with patients over 70 years old to increase their understanding of their medicines, while improving patient care.

Intermediate care beds – ten beds were commissioned from one local care home with support from a neighbouring GP practice. This improved the co-ordination of care.

Previously, these beds were based within a number of care homes meaning community nursing/therapy teams and local GPs needed to visit several patients in different care homes.

December

January

Winter campaign - Examine Your Options campaign ran for the third year to educate local people what services are available and how they access them.

Board meeting - CCG board met in Hesketh Bank as part of our promise to hold some of our meetings out in the community.

March

Briefing stakeholders – another formal briefing to the Lancashire Health Overview and Scrutiny Committee took place to discuss our community health services procurement and CCG programmes of work.

GP elections – an election process was held among local GP practices to vote for the GP clinical executive leads on our board.

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About us As a clinical commissioning group (CCG), we continue to be responsible for commissioning most healthcare services for the population of West Lancashire. These services include: community health, hospital and mental health services. We received £143.9m for 2015/16, which we allocate according to the needs of our local population of 112,000 people.

Being nestled between the rest of Lancashire and Merseyside, our location continues to present its own set of challenges and opportunities. Partner working remains integral to our work and culture, and even more important in our case due to our geographical position.

Our priorities Our strategic priorities remain at the heart of everything we do:- Right care, right time, safely delivered - Preventing people from

dying prematurely - Integrated working for better

patient experience, safety, quality of life and reduced inequalities

In 2015/16, our improvement interventions (areas of focus) were:- Cancer- Cardiovascular disease- Respiratory - Mental health and dementia

Our other priorities were:- Children and young people’s

health and wellbeing- End of life care- Primary prevention

Transform planned care

Transform urgent and

emergency care

Transform community

service

Transform outcomes in the most challenging

long term conditions

Transform outcomes for those

experiencing the most challenging health

inequalities

Ensuring quality, sustainable acute services where appropriate

Building the Future Together; our new models of care

Maternity Vanguard

MusculoskelitalIntegrated out of hospital urgent

care servicesPrimary Care

Gastrointestinal (alcohol related

liver disease)Ten clinical standards Saving babies lives

Paediatric community care

Genito Urinary (chronic kidney

disease)Operational resilence

Paediatric urgent careNeurological

(epilepsy)

Trauma & Injuries (children)

End of life care

Autistic spectrum disorder pathway

DIGITAL TRANSFORMATION

MOBILISING COMMUNITIES AROUND HEALTH

Well Skelmersdale

Earlier diagnosis

Primary prevention - alcohol, diet,

physical activity, smoking, wellbeing

Cancer

Cardio Vascular Disease

(including diabetes)

Mental health & dementia (all age)

Respiratory conditions (all age)

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The detail which underpins these priorities is highlighted in the following diagram. Our plan for this year provides more information about each priority and gives examples of what schemes we hope to deliver in order to address each one of these areas.

The programmes we mentioned in last year’s Annual Report 2014/15, such as Healthier Lancashire and the Better Care Fund, which both involve working across our county and with our local Health and Wellbeing Board, will still continue to be key in the year ahead. Our Strategic Plan 2016/17 sets out more details of our strategic focus for the future.

The top level priorities for the year ahead here will impact across all of our work locally in West Lancashire. The longer term plan is to include the Better Care Fund work within the emerging Sustainability and Transformation Plan. This is further referenced in our Strategic Transformation Plan 2016/17.

In 2016/17, we will continue to contribute to workstreams to include;- Intermediate care- Prevention/wellbeing/public health- Daily living- Residential and nursing home care- Learning disability transforming care- Children and young people’s emotional

wellbeing and mental health

A look to the futureAs transformation is so fundamental to the year ahead, we have identified the following five strategic priorities:

- Transform urgent and emergency care- Transform planned care- Transform community services- Transform outcomes in the most

challenging long term conditions- Transform outcomes for

those experiencing the most challenging health inequalities.

More information on our priorities for 2016/17 can be found in our Strategic Transformation Plan, which is available on request or via our website www.westlancashireccg.nhs.uk

Transformurgent and

emergency care

Transformoutcomes for those

experiencing themost challenging

healthinequalities.

Transformplanned care

Transformoutcomes in themost challenging

long termconditions

Transformcommunity

services

Transformand Sustainability in

West Lancashire

14 15

15/16 commissioning budget

We had a total commissioning budget of £145.4m (£143.90m after the surplus) in 2015/16 and the chart shows how we spent that money.

At the financial year end, the CCG is in recurrent balance and has achieved its target of a 1% surplus (£1.46m) for 2015/16. All financial duties have been met including capital, revenue and cash resource use within funded allocations. The CCG has also operated within its running cost budget of £2.397m.

Our accounts have been prepared under a direction issued by the NHS Commissioning Board under the National Health Service Act 2006 (as amended).

The CCG encountered significant financial pressures in 2015/16 across a number of budgetary areas as demand for NHS services continued to increase. Yet we have managed to finance a number of focused investments including: - Ongoing funding of a pilot scheme

for the treatment of heart failure patients in the community.

- The continuation of our partnership with Macmillan Cancer Support, including appointing a project manager to lead the ‘Living With and Beyond Cancer’ programme, establishing a physical activity initiative (see “Move More” earlier in the report) for cancer patients and a Macmillan patient group.

- The recruitment of a Respiratory Nurse who will develop a service to enable patients to manage their conditions better in the community and reduce unplanned A&E attendances and hospital admissions.

- Funding has been secured from Public Health England to commence the ‘Well Skelmersdale’ project which will involve working with the local community to understand and address the population health issues in the town.

- Investment in IT including developing telehealth solutions to provide support and advice for patients to manage their own health conditions and continuing to enhance the IT infrastructure in Community Services.

- Resources set aside by the CCG to allocate £5/head of population per practice to fund initiatives within primary care to deliver care for the over 75 population with complex needs.

- Increased investment in the Eating Disorders service in order to expand its capacity and the range of patients it serves.

Together these investments are consistent with the strategic plans, objectives and aims of the CCG and its partners to deliver better care closer to patients’ homes.

£18.9m Prescribing

£5.9m Other

£12.2m Mental Health

£10.5m Individual Care Packages

£15.7m Community

£3.6m Ambulance

£77.1m Acute

£18.9m Prescribing

£5.9m Other

£12.2m Mental Health

£10.5m Individual Care Packages

£15.7m Community

£3.6m Ambulance

£77.1m Acute

Total £143.9m

Performance analysis

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Our performance We report our performance against our local and national targets and indicators via a regular report – the integrated business report. This report is presented at each meeting of the governing body and can be found on our website if more detail is required.This is a summary of some of the key performance targets.

We constantly review our position against a broad range of key outcomes and process indicators and present these through our integrated business reports.

In relation to our under performance concerning ambulance targets unfortunately we are currently at 86.38%. None of the Lancashire CCGs are achieving the Cat A call out target of 95%: there are 4 CCGs out of 8 Lancashire CCGs which are within 5%. We have been working with our hospital colleagues to improve Southport District General Hospital handover times which continues to be a challenge but the times are improving.

A&E 4 Hr performance has not been achieved, and is currently at 86% for the CCG. Southport and Ormskirk Hospital NHS Trust has met the Healthcare Acquired Infections (HCAI) C.Difficile target. There have been 37 breaches upheld for the Trust (that is one case above trajectory) which is the figure recorded by Public Health England (PHE). However, of the 37 cases they have successfully appealed 12, which lowers the total to 25 attributable cases. There have also been 3 MRSA (Methicillin-Resistant Staphylococcus Aureus) breaches against an annual zero target.

Period Target T’hold Achieved

Ambulance

Category A calls resulting in an emergency response arriving within 8 minutes - Red 1

YTD 75% 74% 59%

Category A calls resulting in an emergency response arriving within 8 minutes - Red 2

YTD 75% 74% 58%

Category A calls resulting in an ambulance arriving at the scene within 19 minutes

YTD 95% 90% 85%

A&E

Patients should be admitted, transferred or discharged within 4 hours of their arrival at an A&E department

YTD 95% 94% 86%

No waits from decision to admit to admission (trolley waits) over 12 hours

YTD 0 0 0

Cancer waits

Patients seen within 2 weeks for an urgent GP referral for suspected cancer

YTD 93% 88% 96%

Patients seen within 2 weeks for an urgent referral for breast symptoms

YTD 93% 88% 96%

Maximum 1 month (31 day) wait from diagnosis to first definitive treatment

YTD 96% 91% 97%

Maximum 31 day wait for subsequent treatment where that treatment is surgery

YTD 94% 89% 96%

Maximum 31 day wait for subsequent treatment where that treatment is an anti-cancer drug treatment

YTD 98% 89% 100%

Maximum 31 day wait for subsequent treatment where that treatment is a course of radiotherapy

YTD 94% 89% 99%

Maximum 62 day wait from referral from an NHS screening service to first definitive treatment for all cancers

YTD 90% 85% 94%

Maximum 2 month (62 day) wait from urgent GP referral to first definitive treatment for cancer

YTD 85% 80% 84%

Maximum 2 month (62 day) wait from urgent GP referral to first definitive treatment following a consultant's decision to upgrade the priority

YTD 86% 80% 91%

RTT

Referral to Treatment - Admitted patients to start treatment within a maximum of 18 weeks from referral

YTD 90% 85% 91%

Referral to Treatment - Non- admitted patients to start treatment within a maximum of 18 weeks from referral

YTD 95% 90% 96%

Referral to Treatment - Patients on incomplete pathways waiting no more than 18 weeks from referral

YTD 92% 87% 96%

Referral to Treatment - No of incomplete pathways waiting > 52 weeks

YTD 0 0 2

Diag Patients waiting 6 weeks or more for a diagnostic test YTD <1% >1.1% 0.61%

HCAI

HCAI measure (MRSA) YTD 0 0 3

HCAI measure (Clostridium difficile infections) YTD Local - 39

18 19

Our risks The CCG continues to work hard to identify, score and mitigate risks as part of its integrated risk management framework. A number of risk themes from 2014/15 have continued for 2015/16, particularly in respect of the challenging financial environment that all NHS organisations are faced with.

Notable risks during 2015/16 were as follows:

- Clinical and Financial sustainability of the main hospital provider, including key quality improvements

- Challenging financial savings from the QIPP programme, during a time of very limited financial resources

- Staff capacity when faced with a wide and difficult agenda, including the undertaking of an important re-procurement of community services as part of “Building the Future Together”

- Safeguarding of individual patients to ensure that all care packages are delivered appropriately and in a timely manner

- Emerging risks that arise from reductions in council budgets and the potential implications for health and social care

- Integrating with health and social care, including the Better Care Fund, which creates new budget pooling arrangements

A number of the risk mitigations require collaborative solutions and the CCG is working closely with fellow commissioners, providers, council colleagues and third sector organisations to ensure the best possible care for patients in a difficult financial environment. There are a number of collaborative work programmes across both Lancashire and Merseyside which the CCG is involved in. These programmes will help shape the patient care system going forward and will aim to integrate care as far as possible, giving a better experience for West Lancashire patients

Involving you We remain committed to encouraging involvement and participation from our local stakeholders. Crucial to this are our local members of the public, patients and carers.

Our community health services re-procurement is an example of how we continue to utilise communication, engagement and participation. Within this process, we have and continue to into the year ahead, involve all of those impacted by this re-procurement, in a number of ways, such as:

- Involvement sessions with incumbent staff (following on from engaging with them about our vision in 2014/15)

- Bidder days with third sector, partner organisations and patient/public representation

- Visioning events with core stakeholders

- Regular dialogue and decision making with GP practices (our membership)

- Frequent stakeholder briefings with the Health Overview & Scrutiny Committee, local authorities and other key partners

- Visits to local community groups supporting those patients and carers living with long-term conditions

- Public surveys and patient story forms welcoming views and experiences of using local services

- Digital presence and updates through local community blogs, social media and CCG/stakeholder websites

- Production of public facing materials such as Frequently Asked Questions and infographics explaining the process

- Dedicated web page with regular updates on the process such as timeframes and slides/storyboards from events

- Patient/public events across all localities in West Lancashire

- Regular coverage in local newspapers and community publications sharing information and welcoming views

- Hosting events with local CVS to encourage involvement from third sector and other community groups

- Annual public listening events

- Updates via our governing body meetings

- CCG staff procurement Q&A sessions

Our My View group continues to be the best way to get involved in the CCG.You can sign up online www.westlancashireccg.nhs.uk/myview/ or by contacting us directly. There is no obligation to do anything when you join our patient/public group. You will receive a regular bulletin from us with latest news, event info and surveys. If you tell us what areas of health you are interested in, when specific pieces of work come up on areas of interest to you, we will invite you to become more involved in our work as appropriate.

Our communication channels vary as we understand that everyone receives information in different ways, for example, some people remain predominantly at home, others may have no access to the internet and others may access most health information through their GP practice. We ensure this diversity in terms of communication across our community is recognised and therefore considered and reflected across all of our communication and engagement activity. Therefore, although the CCG remains active on social media and the website remains a core source of information, we also continue to use more traditional ways of communication via the local media and through village magazines. Furthermore, we also work closely with community groups, the third sector and other partners to ensure we are reaching those people who are more isolated and less engaged with their local healthcare.

Our new Patient Experience Group was established in 2015/16, which aims to further support the patient’s voice being heard and considered. This includes internal CCG teams, as well as representatives from the local CVS, Healthwatch and local GP practices. External partners are invited to take part in discussions as suitable.

To demonstrate how and to what degree we have involved others, we produce a Duty to Involve Report every year, which is to be published on our website from September 2016 onwards.

For reference, last year’s report is available under the resources/ corporate documents tab of our website. We certify that the clinical commissioning group has complied with the statutory duties laid down in the National Health Service Act 2006 (as amended)

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Sustainability As a small CCG, we do not have a large carbon footprint. However, we still appreciate the importance of embedding sustainability within our business. This includes:

Transport and travel:- Encouraging staff to car share

for meeting attendance- Promote working from

home to reduce travel - Use of technology (for

example teleconferences) to reduce travel to meetings

Commissioning, tendering and procurement processes including:- An assessment of

environmental impacts - An assessment of social impacts - A consideration of the suppliers’

sustainability policies

Promoting recycling of waste in our office and kitchen areas

Promoting paper light working thereby reducing paper usage Reusing and recycling of redundant IT equipment

The CCG’s offices are leased from NHS Property Services. For the purposes of this report, it is not possible for NHS Property Services to provide energy consumption information in relation to our offices alone.

Mike MaguireAccountable officer

24th May 2016

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Members’ report

Accountability Report

The CCG’s board (or governing body) has remained committed to encouraging full participation from its GP membership. A strong example of this is their input into our clinical strategy for integration Building for the Future and their regular dialogue and decision making in terms of our community health services procurement.

Some examples of how we remain transparent:

- Weekly e-bulletin issued every Monday to GPs and practice nurses/managers

- Progress and performance of CCG reviewed at membership council meetings

- Governing body meetings held in public out in the community/membership receives papers

- Membership requested to vote regularly on important issues/decisions

Membership council and governing body A full list of membership council members can be found on page 31-32. We have a 12 strong governing body with 6 GPs, a chief nurse, a secondary care consultant, two lay members, chief finance officer and chief officer. The governing body members can be found on page 33. The chair is Dr John Caine and the Chief Officer is Mike Maguire. Two of the GPs, as mentioned in the foreword of this report, are stepping down for 2016/17.

We have a number of other subcommittees one of which is the audit committee which provides the governing body with an independent and objective view of the CCG’s financial systems, financial information and compliance with laws and regulations in relation to finance. The audit committee is detailed on page 35 of this report.

A profile of governing body members is published on our website http://www.westlancashireccg.nhs.uk/about-us/whos-who/

As part of our governance arrangements all governing body members have to declare any conflicts of interest they may have. These are also found on our website http://www.westlancashireccg.nhs.uk/about-us/governing-body/

Each governing body member knows of no information which would be relevant to the auditors for the purposes of their audit report, and of which the auditors are not aware, and: has taken all the steps that he or she ought to have taken to make himself or herself aware of any such information and to establish that the auditors are aware of it.

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Statement of Accountable Officer’s responsibilities

The National Health Service Act 2006 (as amended) states that each clinical commissioning group shall have an Accountable Officer and that officer shall be appointed by the NHS Commissioning Board (NHS England). NHS England has appointed the chief officer to be the Accountable Officer of the CCG.

The responsibilities of an Accountable Officer, including responsibilities for the propriety and regularity of the public finances for which the Accountable Officer is answerable, for keeping proper accounting records (which disclose with reasonable accuracy at any time the financial position of the clinical commissioning group and enable them to ensure that the accounts comply with the requirements of the accounts direction) and for safeguarding the CCG’s assets (and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities), are set out in the Clinical Commissioning Group Accountable Officer Appointment letter.

Under the National Health Service Act 2006 (as amended), NHS England has directed each clinical commissioning group to prepare for each financial year financial statements in the form and on the basis set out in the Accounts Direction. The financial statements are prepared on an accruals basis and must give a true and fair view of the state of affairs of the CCG and of its net expenditure, changes in taxpayers’ equity and cash flows for the financial year.

In preparing the financial statements, the Accountable Officer is required to comply with the requirements of the Manual for Accounts issued by the Department of Health and in particular to:

- Observe the accounts direction issued by NHS England, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;

- Make judgements and estimates on a reasonable basis;

- State whether applicable accounting standards as set out in the manual for accounts issued by the Department of Health have been followed, and disclose and explain any material departures in the financial statements; and,

- Prepare the financial statements on a going concern basis.

To the best of my knowledge and belief I confirm the annual report and accounts as a whole is fair, balanced and understandable and that takes personal responsibility for the annual report and accounts and the judgment required for determining that it is fair, balanced and understandable.

I confirm that, as for as I am aware, there is no relevant audit information of which the entity’s auditors are unaware, and as the Accountable Officer I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the entity’s auditors are aware of that information.

To the best of my knowledge and belief, I have properly discharged the responsibilities set out in my clinical commissioning group Accountable Officer appointment letter.

Mike MaguireAccountable Officer

24th May 2016

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Governance Statement by the Accountable Officer of West Lancashire Clinical Commissioning Group (CCG)

Introduction and context The clinical commissioning group (CCG) was licensed from 1 April 2013 under provisions enacted in the Health & Social Care Act 2012, which amended the NHS Act 2006.

As at 1 April 2015, the clinical commissioning group was licensed without conditions on any of the following domains:

- Domain one: a strong clinical and multi-professional focus which brings real added value.

- Domain two: meaningful engagement with patients, carers and their communities.

- Domain three: clear and credible plans which continue to deliver the Quality Improvement Productivity and Prevention (QIPP) challenge within financial resources, in line with national requirements (including outcomes) and local joint health and wellbeing strategies.

- Domain four: proper constitutional and governance arrangements, with the capacity and capability to deliver all their duties and responsibilities, including financial control, as well as effectively commission all the services for which they are responsible.

- Domain five: collaborative arrangements for commissioning with other CCGs, local authorities

and the NHS Commissioning Board as well as the appropriate external commissioning support.

- Domain six: great leaders who individually and collectively can make a real difference

Scope of responsibility As Accountable Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of the clinical commissioning group’s policies, aims and objectives, whilst safeguarding the public funds and assets for which I am personally responsible, in accordance with the responsibilities assigned to me in Managing Public Money. I also acknowledge my responsibilities as set out in my Clinical Commissioning Group Accountable Officer Appointment Letter.

I am responsible for ensuring that the clinical commissioning group is administered prudently and economically and that resources are applied efficiently and effectively, safeguarding financial propriety and regularity.

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Compliance with the UK Corporate Governance Code We are not required to comply with the UK Corporate Governance Code. However, we have reported on our corporate governance arrangements by drawing upon best practice available, including those aspects of the UK Corporate Governance Code we consider to be relevant to the CCG and best practice.

The Clinical Commissioning Group Governance Framework The National Health Service Act 2006 (as amended), at paragraph 14L(2)(b) states:

The main function of the governing body is to ensure that the group has made appropriate arrangements for ensuring that it complies with such generally accepted principles of good governance as are relevant to it. This has been achieved by operating within the CCG constitution which has been signed by all 22 GP practices in West Lancashire. The constitution, which was updated in 2014/15 to refine governance arrangements, outlines the principles of good governance which must be adhered to at all times in the way by which the group conducts its business. These include the observing of the highest standards of propriety, impartiality, integrity and objectivity in relation to the stewardship of public funds, the management of the organisation and the conduct of its business. The governance arrangements in relation to committees and the duties of those committees are detailed below.

The following diagram provides a summary of the reporting lines.

Governance and management assurance

Membership Council

Quality & Safety

Committee

Remuneration Committee

Clinical Executive

Committee

Audit Committee

Governing Body

Prescribing Committee

Information Governance

Steering Group

Constitutional committees

Advisory committee/groups

Independent assurance

Internal Audit

ExternalAudit

Audit Committee

Service auditor opinion of CSU

functions

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Membership CouncilThe Membership Council is comprised of the CCG chair and a nominated clinical representative from each of the 22 member practices.

The Membership Council has specific responsibility for representing the interests of the Group as a whole, influencing the recommendations and decisions of the Governing Body’s Clinical Executive Committee in respect of the Group’s commissioning plans, approving the Group’s constitution and any proposed changes, agreeing the arrangements for members joining and leaving the Group, appointing governing body members and determining pay and performance of governing body members who are not employees of the Group.

The council is also responsible for contributing towards the goals of the Group as set out in the Group’s commissioning and financial plans.

The Membership Council holds the Governing Body to account for the functions that the Group has conferred on it through regular monthly meetings with the Chair and Chief Officer of the Group.

As required the Membership Council appoints a Membership Council’s Advisory Panel which is a small panel comprising of three Membership Council Members and an independent HR adviser. The panel oversees the process of appointing members to the Governing Body and makes recommendations to the Membership Council on those appointments and, following independent advice, on remuneration and travelling or other allowances for its Governing Body members, who are not employees of the Group.

The key themes of the work of the Membership Council over the last year have been to support the delivery phase of the CCG’s strategy (Building the Future Together) in relation to the procurement of community services; discuss quality and service improvements in relation to commissioned hospital and community services; and to identify any desired changes to the contracts/services with hospitals as part of the contract intentions discussions for 2016/17.

The Membership Council have also looked at the changes required in primary care to fully realise the potential benefits of integrated care inherent in the Building the Future together strategy, with particular focus of proactive care of the frail patients, and multi-disciplinary working.

Membership Council Membership and Attendance The attendance relates to a member of the practice attendingthe meeting and not if a proxy vote has been arranged. April 2015 to March 2016

Dr P McGrath # Aughton Surgery 3/11

Dr Andrews Aughton Surgery 1/11

Dr Roberts # Aughton Surgery 6/11

Dr Harris Aughton Surgery 1/11

Dr S Saxena # Ashurst Primary Care 7/11

Dr A Bisarya # Drs A & A K Bisarya 9/11

Dr D Bisarya # Birleywood Practice 5/11

Dr B Biswas ** # Beacon Primary Care 9/11

Dr R Bonsor ** Beacon Primary Care 10/11

Dr G Duddukuri # Burscough Family Practice 6/11

Dr R Ray # County Road Surgery 11/11

Dr A Krishnamurphy # The Elms Practice 7/11

Dr Roby The Elms Practice 2/11

Dr D Chang # Hall Green Surgery 7/11

Dr Barnes Hall Green Surgery 2/11

Dr Cusack Hall Green Surgery 4/11

Dr Heaton Hall Green Surgery 1/11

Dr Mudugal Hall Green Surgery 3/11

Dr Subramaniam Hall Green Surgery 1/11

Dr A Statham # Lathom House Surgery 9/11

Dr A Littler # Sandy Lane Health Centre 10/11

Dr A Sharma # Manor Primary Care 10/11

Dr S Dontula # North Meols Medical Centre 9/11

Dr S Frampton Ormskirk Medical Practice 4/11

Dr Dean Ormskirk Medical Practice 3/11

Dr Amy Bishop-Cornet # Ormskirk Medical Practice 4/11

Continued on page 32

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Governing BodyThe CCG Chair along with 5 other GPs, 2 Lay Members, Chief Nurse, Secondary Care Consultant, Chief Officer and Chief Finance Officer meet as a Governing Body to discharge the statutory duties and functions of the CCG.

The overarching role of the Governing Body is to ensure that the Group has appropriate arrangements in place to exercise its functions effectively, efficiently and economically and in accordance with the Group’s principles of good governance and the CCG constitution.

The Governing Body also leads and approves the setting of the Group’s vision and strategy and its annual commissioning and financial plans, arrangements for financial and risk management and jointly publishing, with the Group’s membership council, the Group’s annual report and annual accounts.

The main focus of the work during the past year has been in connection with progressing and implementing the vision for joined up care Building the Future Together, reviewing performance of the CCG and the contracts commissioned by the CCG, approving financial and strategic plans, monitoring risk via the assurance framework and risk register, safeguarding issues and information management and technology developments

The Governing Body considers that it is compliant with the Corporate Governance Code and has met formally on 7 occasions between 1 April 2015 and 31 March 2016 and has been quorate on each occasion that it has met. The Governing Body is quorate if five members including one Lay Member and either the Chief Officer or Chief Finance Officer are present.

Governing Body Membership and Attendance

Dr John Caine, chair 6/7

Dr Bapi Biswas, GP executive lead 5/7

Dr John (Jack) Kinsey, GP executive lead 6/7

Dr Simon Frampton, GP executive lead 4/7

Dr Ros Bonsor, GP executive lead 6/7

Dr Peter Gregory, GP executive lead 6/7

Douglas Soper, lay member 6/7

Greg Mitten, lay member 6/7

Dr Adam Robinson, secondary care doctor 7/7

Mike Maguire, chief officer 7/7

Paul Kingan, chief financial officer 7/7

Claire Heneghan, chief nurse 5/7

Membership Council Membership and Attendance The attendance relates to a member of the practice attendingthe meeting and not if a proxy vote has been arranged. April 2015 to March 2016

Dr J Caine # Parbold Surgery 9/11

Dr Mullen Parbold Surgery 4/11

Dr Crossan Parbold Surgery 3/11

Dr Gullick Parbold Surgery 9/11

Dr Ravangave Parbold Surgery 7/11

Dr Taylor Parbold Surgery 1/11

Dr Kinsey ** # Parbold Surgery 3/11

Dr HJ Saunders # Parkgate Surgery 6/11

Dr Kiggins Parkgate Surgery 4/11

Dr Gregory Parkgate Surgery 10/11

Dr Hooson Parkgate Surgery 1/11

Dr Sur # Dr Surs and Partners 6/11

Dr Jaidka # Dr Surs and Partners 7/11

Dr Paniker Dr Surs and Partners 1/11

Dr Hicks Dr Surs and Partners 1/11

Dr G Simpson # Stanley Court Surgery 9/11

Dr Michael Ebdy # Tarleton Practice 4/11

Dr Southern Tarleton Practice 5/11

Dr Hudson Tarleton Practice 7/11

Dr Sears Tarleton Practice 1/11

Dr Fletcher Tarleton Practice 1/11

Dr Mittal Tarleton Practice 1/11

Dr Hindle # Viran Medical Practice 3/11

Dr Ryder # Matthew Ryder Clinic 0/11

Dr Caine is also the CCG chair **GP members of the CCG Governing Body#Principal members

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The following have been established as committees of the Governing Body and the Governing Body has delegated responsibilities to these committees via approved Terms of Reference which form part of the constitution:

Audit CommitteeThe audit committee provides the Governing Body with an independent and objective view of the Group’s financial systems, financial information and compliance with laws, regulations and directions governing the Group in relation to finance.

The Audit Committee also reviews the effectiveness of the system of governance, risk management and internal control, incorporating the arrangements for the Membership Council and the arrangements made by the Group for managing conflicts of interest, whistle blowing and fraud (both clinical and non-clinical).

The main focus of the work has been in relation to receiving internal and external audit reports and reports from the local counter fraud team, reviewing the assurance framework, risk register and the assurance provided by Midlands and Lancashire Commissioning Support Unit to ensure services they provide are in line with guidelines.

Audit Committee Membership and Attendance

Douglas Soper, lay member (chair) 4/4

Greg Mitten, lay member 2/4

Dr Jack Kinsey, GP executive lead 4/4

Dr Bapi Biswas, GP executive lead 3/4

Dr Adam Robinson, secondary care doctor 2/4

Claire Heneghan, chief nurse 3/4

Other regular attendees include the Chief Finance Officer, internal and external audit and the local anti-fraud specialist. The Audit Committee is quorate if a minimum of three voting members are present at least one of whom is a lay member.

A survey of Governing Body effectiveness was undertaken by our internal auditors in March 2015. The overall objective of the review was to undertake an independent survey, to seek opinion on the Effectiveness of the CCG’s Governing Body.

The review examined 16 key areas as follows: - Governing Body Papers;- Quality of Commissioned Healthcare;- Performance of Commissioned Healthcare;- Finances of the CCG;- CCG Strategy;- Performance Indicators;- Patient Engagement;- Risks facing the CCG;- Development of the CCG as an organisation;- Addressing risk and poor performance;- Assurances from Sub-Committees;- CCG Performance against National Indicators;- Regulatory Changes;- Health Inequalities;- Additional information; and- Identification of any significant gaps.

Seven out of the 12 Members responded to the survey (58%), this is deemed a good response rate. This is above the average response rate (a good response is in the region of 40%).

The results of the survey showed that governing body members thought the CCG has established a logical committee structure which has supported the Governing Body in the oversight of the organisation’s objectives during its time as a statutory organisation. The CCG’s Constitution sets out the arrangements put in place to help the CCG deliver its vision and goals.

There is a clear segregation of duties, responsibilities and accountabilities between the Governing Body and its Committees and visible commitment and desire to ensure the CCG is ‘Getting the Basics Right’ in terms of stewardship, internal control, governance risk and risk management.

Overall the results of the survey were positive.

Training for Governing Body members has been carried out through governing body development sessions which are held every other month. At these sessions members were briefed on areas relevant to the work of the CCG which included proactive workshops for member participation into what their roles are, how to engage and to be proactive and their role in the Neighbourhood Model.

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Clinical Executive CommitteeThe Clinical Executive Committee ensures that there is continuous engagement with the Group’s membership and that members’ views influence and inform the development of the Group’s commissioning priorities; plans and arrangements for their implementation.

It recommends to the Governing Body the Group’s five year and annual commissioning and financial plans, demonstrates that plans are informed by patients and the public and that they are patient centred and that they are effective, efficient and economic. The Committee has oversight of the delivery of those plans and ensures that risks associated with delivery are being mitigated.

The Committee also keeps under review and ensures compliance with the Group’s governance requirements and legal duties; has operational oversight of the Group’s responsibilities, including organisational development, and ensures that regular reports are provided to the Governing Body on the Group’s operational management.

It provides assurance to the Governing Body that the Group’s collaborative arrangements are being discharged in accordance with the arrangements approved by the Governing Body.

Its main focus of work has been in providing clinical input into Building the Future Together and the CCG’s key strategies and commission plan, reviewing the quality of care at Southport and Ormskirk Hospital NHS Trust along with other providers, approving corporate policies, reviewing risks via the assurance framework and risk register and monitoring the financial position of the CCG.

Clinical executive Committee Membership and Attendance

Dr John Caine, chair 27/39

Dr Peter Gregory, clinical lead 23/39

Dr Bapi Biswas, clinical lead 30/39

Dr John (Jack) Kinsey, clinical lead 31/39

Dr Simon Frampton, clinical lead 31/39

Dr Ros Bonsor, clinical lead 27/39

Jo DeBacker, practice manager 29/39

Debbie Dobson, practice manager 30/39

Mike Maguire, chief officer 27/39

Paul Kingan, chief financial officer 20/39

The Clinical Executive Committee is quorate if a minimum of five voting members are present at least three of whom are elected clinicians.

Members of the Governing Body who are not members of the Clinical Executive Committee are kept abreast of its work by the circulation of meeting papers and have an open invitation to attend meetings as they feel appropriate.

Remuneration and Terms of Service CommitteeThe Remuneration Committee makes recommendations to the Governing Body on remuneration, fees and other allowances for employees and for people who provide services to the Group.

It makes recommendations to the Governing Body concerning the appraisal process for Governing Body members and advises the Governing Body and where appropriate the Membership Council’s Advisory Panel on succession planning for elected clinical leaders and other governing body members.

The Committee has met once since April 2015 with the main items of business being agreeing the salaries and terms and conditions of senior staff and the remuneration for GP members of the Governing Body.

Remuneration Committee Membership and Attendance

Douglas Soper, lay member (chair) 1/1

Greg Mitten, lay member 1/1

Dr Adam Robinson, secondary care doctor 1/1

Claire Heneghan, chief nurse 1/1

The Remuneration Committee is quorate if a minimum of three voting members are present at least one of whom us a lay member.

38 39

Quality and Safety CommitteeThe Quality and Safety Committee provides assurance to the Governing Body that the services the Group commissions are safe and effective, that quality and patient experience is central to the work of the Group and that there is continuous improvement in the quality of commissioned services and patient outcomes.

Quality and Safety Committee Membership and Attendance

Greg Mitten, chair 8/9

Dr J Kinsey, clinical lead for safeguarding 9/9

Jackie Moran, head of quality, performance & contracting 7/9

Dr Ros Bonsor, clinical lead 8/9

Jo DeBacker, practice manager 7/9

Claire Heneghan, chief nurse 8/9

Karen Thompson, public health consultant 3/3

Karen Thompson (started in November 2015)

The committee has paid particular attention to receiving assurance on the quality of care and service provision at Southport and Ormskirk Hospital NHS Trust, seeking assurance on safeguarding arrangements and monitoring equality and diversity requirements and developments.

The minutes of the committees are submitted to the Governing Body.

The CCG has further strengthened joint working arrangements with West Lancashire Borough Council (WLBC), Lancashire Health and Wellbeing Board and West Lancashire Partnership. The CCG has started to hold exec:exec meetings with WLBC. Agendas have focused on strategic areas for potential collaboration and cost working such as the Well Skelmersdale programme (Well North pathfinder), planning and estates. Well Skelmersdale is a good example of where our relationship has been strengthened. WLBC was a partner who joined us before a selection panel for Well North, have signed the “letter of intent” and have committed two senior managers to the planning of the programme. The council is also progressing with the appointment of a health and wellbeing lead for which early discussions have taken place around how such a post may work with the CCG’s newly appointed Lead Manager Health Inequalities.

The CCG has continued to build relationships with managerial colleagues and elected members. This has been of value during the reprocurement of community services where elected members have been briefed on the approach and progress.

The CCG remains an active partner in One West Lancashire, the West Lancashire Community Safety Partnership and the Health and Wellbeing Partnership.

It is worth noting that the latter now sits as part of the formal governance arrangements for the Lancashire Health and Wellbeing Board which is attended by the Chair and an exec GP lead (rotational).The Lancashire Health and Wellbeing Board is a forum for key leaders from the health and care system in Lancashire to work together to improve the health and wellbeing of the local population and reduce health inequalities. West Lancashire is represented by Dr John Caine with support from Dr Simon Frampton. Both are elected GPs on the CCG’s Governing Body.

Board members work together to understand their local community’s needs, agree priorities and encourage commissioners to work in a more joined up way. As a result, patients and the public should experience better joined-up services from the NHS and their local council in future.

In relation to other partners the CCG has developed a working relationship with Edge Hill University to look at how the two organisations could support each other’s work streams and developments.

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The Clinical Commissioning Group Risk Management FrameworkThe CCG has an approved integrated assurance framework which sets out the CCG’s appetite for risk, attitude towards risk and the culture that will underpin its successful management and delivery. The framework ensures both a systematic and consistent approach to managing risk is adopted through the organisation.

The framework details a model for implementing risk management, which is to identify, quantify, manage and mitigate each presented risk, thus making it a routine process for all staff. To facilitate this all risks are articulated on a register which is saved on the network so all staff can see all organisational risks. Incident reporting is encouraged in the CCG and the constitution reflects the protection afforded by whistleblowing. The CCG has linked policies for whistleblowing, bribery and corruption with alignment to safeguarding policies.

The quantification of risk along with appropriate descriptors to assist in determining the consequence and likelihood of the impact of the risk are detailed in the assurance framework.

The principle risks associated with the critical outcomes are cross referenced to the risk register. The purpose is to ensure that linked operational risks are identified and that all risks within the Governing Body Assurance Framework are considered in this way. Some of these operational risks will be at a corporate level, whilst others may not as they are being managed by teams and mitigated accordingly. These risks are graded using the 5 x 5 matrix and managed locally but in the case of risk graded as ‘high’ (score of 15 or above) there is an obvious potential impact on the Assurance Framework and they are reported to the Governing Body on a regular basis.

As from April 2016 any risks graded 12 or above will be graded as ‘high’ and added to the Assurance Framework.

The Assurance Framework provides the CCG with a comprehensive method for the effective and focused management of the significant risks that impact on the delivery of the CCG’s annual and strategic objectives. Through this framework the Governing Body gains assurance from the appropriate risk owner that risks are being appropriately managed throughout the organisation. The framework is also reviewed by the Clinical Executive Committee and the Audit Committee on a regular basis

The risk register is reviewed quarterly by each of the risk owners and presented to the Clinical Executive Committee, Audit Committee and Governing Body. Risk management is embedded in the activity of the organisation through the above measures and also through assessments of specific risks e.g. information governance via the Information Governance Steering Group and Equality Impact Assessment which is part of the CCG’s commissioning toolkit.Where appropriate, through consultation and direct involvement with the CCG, public stakeholders are involved in managing risks which impact on them.

During 2015/16 the Neighbourhood Learning Programme has been established which aims to offer a shared learning model of workforce development supporting staff within the locality to develop knowledge and skills to work towards an integrated model of care. This involved leaders from across Skelmersdale coming together for a series of half day sessions. This group identified isolation and resilience as a priority area for further development within the workforce. To support the CCG approach to developing and increasing numbers of pre-registration nursing student placements we have worked closely with Edge Hill University and practices have now started taking students from the University. A non-credit bearing mentorship module has been developed by the University with the specific aim of supporting practice nurses to undertake this role.

The CCG has supported the University by a staff member providing expertise on a competency to practice panel.The University hosts a General Practice Nursing Special Interest Group which the CCG Primary Care Nursing Development Lead attends along with two nurses working in general practice.’ The CCG has also continued and strengthened the relationship with Lancashire County Council via the work undertaken around the Better Care Fund. This work resulted in Lancashire’s Better Care Fund being approved in January 2015.

There remain strong Lancashire BCF governance structures and processes that were put in place for BCF15-16. Details of these, including a structure and accountability diagram are within schedules 2, 3, 4 and 5 of the Lancashire BCF 2015/17 S75 agreement. The CCG has assurance over this arrangement as the CCG controls most of its contribution to the fund.

There is a strategic Lancashire BCF Steering group and operational programme managers group with representation from all CCGs, County Council and NHS England. Membership of these groups has been strengthened for 2016-17 by the recruitment of senior representatives of the voluntary sector and of the City and Borough councils within the county.

The Lancashire Health and Wellbeing board has taken the BCF as a priority within its work plan. It receives regular reports and takes a robust approach to the scrutiny of delivery. In order to better manage the development and delivery of the BCF in Lancashire the BCF partners jointly funded a Senior Programme Manager post, hosted by Midlands and Lancashire CSU. The post-holder reports into the steering group, chairs the programme managers group and supports the partners’ commitment to joint and coordinated working across the county and with neighbours in Blackburn with Darwen and Blackpool.

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The Clinical Commissioning Group Internal Control FrameworkA system of internal control is the set of processes and procedures in place in the clinical commissioning group to ensure it delivers its policies, aims and objectives. It is designed to identify and prioritise the risks, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

The system of internal control allows risk to be managed to a reasonable level rather than eliminating all risk; it can therefore only provide reasonable and not absolute assurance of effectiveness.

The section entitled “risk assessment in relation to governance, risk management and internal control” outlines how the control mechanisms work.

There is a clear process for the reporting, management, investigation and learning from incidents. There is a Senior Information Risk Owner to support the arrangements for managing and controlling risks relating to information / data security, with Information Asset Owners nominated and trained across functions.

There is also a Caldicott Guardian who is a GP.

The Local Counter Fraud Service reports to each Audit Committee. The report aims to apprise the Audit Committee of the proactive and reactive activity carried out by the Local Counter Fraud Specialist (LCFS).

There is a scheme of delegation, standing financial instructions and standing orders.The CCG has received assurance in relation to the internal control framework of Midlands and Lancashire Commissioning Support Unit (CSU) via

update reports presented to the Audit Committee. The Chief Finance Officer also meets regularly with CSU representatives to discuss controls. The CCG also reviews and gains assurance through the service auditor reports which are shared with CSU customers and their audit committees.

Information GovernanceThe NHS Information Governance Framework sets the processes and procedures by which the NHS handles information about patients and employees, in particular personal identifiable information. The NHS Information Governance Framework is supported by an information governance toolkit and the annual submission process provides assurances to the clinical commissioning group, other organisations and to individuals that personal information is dealt with legally, securely, efficiently and effectively.

We place high importance on ensuring there are robust information governance systems and processes in place to help protect patient and corporate information. We have established an information governance management framework and continue to develop information governance processes and procedures in line with the information governance toolkit. We have ensured all staff undertake annual information governance training and have implemented a staff information governance handbook to ensure staff are aware of their information governance roles and responsibilities.

There are processes in place for incident reporting and investigation of serious incidents. Along with an information governance management framework we have in place a number of other information governance policies including information risk management policy, information security policy, information sharing policy and information governance training policy.

Control measures are in place to ensure that risks to data security are identified, managed and controlled. The CCG has put an information risk management process in place led by the senior information risk owner. Information asset owners and administrators have been identified to cover the CCG’s main systems and records stores, along with information held at team level. All CCG laptops and USB sticks are encrypted, with iPads and iPhones having password protection. The Information Governance Toolkit self-assessment across the CCG has indicated a level 2 or above on all standards.

Risk assessment in Relation to Governance, Risk Management & Internal ControlDelivery and adherence to risk management is the responsibility of everyone in the CCG and each staff member has the right to identify any potential or actual risks.

The CCG’s integrated assurance framework highlights organisational and individual responsibilities for the management of risk, as follows: - Governing body is ultimately and

collectively responsible for effective risk management within the CCG. The assurance framework is the principle means by which the governing body will capture and monitor the strategic risks to delivery of its objectives. The Governing body will however also receive regularly a copy of the full risk register to enable them to consider the full range of risks faced by the CCG.

- The Audit Committee, which is accountable to the Governing Body, is responsible for reviewing the establishment and maintenance of an effective system of integrated governance, risk management and internal control across the whole of the CCG’s activities in support of the achievement of its objectives.

- The Quality and Safety Committee, which is accountable to the Governing Body, will undertake a lead role in identifying, measuring and monitoring relevant clinical and commissioning risks.

Whilst the governance structure provides oversight of risk management activity, there are key posts within the organisation which have specific accountability and responsibility for ensuring the delivery of risk management.

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These include: - The Chief Officer who is personally

responsible for corporate governance within the organisation, which includes risk management activities.

- The Chief Finance Officer who has overall responsibility, delegated from the Chief Officer, for progressing organisational risk management and governance activity whilst ensuring that there is a high standard of public accountability, probity and performance management.

The process is supported by dedicated resource from Midlands and Lancashire Commissioning Support Unit.

Risks are identified from a variety of sources including:

- Business and commissioning delivery plans – i.e. principal risks to the CCG achieving key performance standards

- Adverse Incident Forms – if it is apparent from an adverse event form, or subsequent investigation into the adverse event, that there is a significant risk then it will be transferred to the Risk Register

- Local Risk Assessments – where local assessments have identified risks

- External Assessment / Audit – significant risks identified by any internal / external audit, e.g. NHS Litigation Authority, HSE notices will be placed on the Risk Register

- External Guidance / Alerts – NICE etc that are not yet implemented

- Results of Feedback – Learning from our patients and the public, whether through analysis or learning resulting from complaints, claims, surveys or patient experience feedback

- Staff meetings - any issues that staff are aware of that are causing them concern

- Information Governance Toolkit self-assessment and risk issues identified and managed by the Information Governance Steering Group

The themes of the risks added to the risk register in 2015/16 were Clinical and Financial sustainability of the main hospital provider, including key quality improvements, risks associated with important re-procurement of community services as part of “Building the Future Together”and integrating with health and social care, including the Better Care Fund, which creates new budget pooling arrangements.

The risks determined through the process outlined above were added to the corporate risk register in 2015/16 following discussion with each senior manager/risk owner and reviewed by the head of corporate affairs for consistency and completeness.

Each risk has a clear action plan and delivery is monitored through the governance processes already outlined. A full comprehensive record of the principal risks identified in 2015/16 and how these have been mitigated and reviewed has been discussed at the governing body in the public session.

Review of economy, efficiency and effectiveness of the use of resources Maintaining adequate and effective financial control and ensuring strong financial management, as well as delivering QIPP savings targets, have been a high underlying risk throughout 2015/16.

Key elements in managing and mitigating the risk have been a strong programme management approach to QIPP, implementation of the CCG’s financial and commissioning strategy with strong controls exercised through contract management. Reports on the financial position are provided to the Audit Committee, Governing Body and Clinical Executive Committee at each meeting with remedial action identified where necessary. Financial challenges are included on the CCG’s corporate risk register and the risk register is reviewed by both the Governing Body and Audit Committee.

The CCG’s internal systems and processes are audited by Merseyside Internal Audit Agency (MIAA) as part of the internal audit plan for the year.

The CCG is supported by a counter-fraud specialist and internal audit to identify any fraud related issues and risks. No specific high risks have been identified. The Audit committee is tasked with oversight of risks to fraud as part of its role.

The CCG’s financial strategy is approved by the Governing Body before the start of the financial year. This document sets out the CCG’s budgets in accordance with the CCG’s approved standing financial instructions (SFI’s) and standing orders (SO’s).

Budgets and expenditure are monitored formally throughout the year via the Integrated Business Report which is

submitted and reviewed on a monthly basis at the CCG Clinical Executive meetings as well as bi-monthly at the Governing Body. For the financial year-end the CCG is reporting a 1% in-year surplus. The CCG also anticipates achieving a 1% surplus in 2016/17.

The CCG also makes monthly financial returns to NHS England as part of the NHS assurance regime. The national ledger system ensures transparency and consistency of financial reporting and the CCG has received full assurance for its financial disclosures during the year.

The CCG relies on Midlands and Lancashire Commissioning Support Unit (CSU) to provide a range of support services to enable the CCG to operate.

The CCG has worked closely with the CSU to ensure that the services meet the CCG’s requirements and are based on best practice. Furthermore, service auditor reports (Deloitte) have all given significant assurance for a range of financial areas.

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Review of the effectiveness of Governance, Risk Management and Internal Control As Accountable Officer, I have responsibility for reviewing the effectiveness of the system of internal control within the clinical commissioning group.

Capacity to handle risk Risk management is led through the implementation of the CCG’s Integrated Assurance Framework, which highlights organisational and individual responsibilities for the management of risk. There are other supporting policies such as the Information Risk Management Policy, Safeguarding Frameworks and Policies and the Serious Untoward Incident Policy and Procedure.

In relation to staff training risk management is included in the CCG’s induction process, mandatory training and is discussed at team meetings so lessons learnt can be drawn out from any incident.

All staff have signed a Bribery Act statement confirming that they understand what action they should take if they become aware of any suspicions or allegations of bribery.

Review of the effectiveness My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the executive managers and clinical leads within the clinical commissioning group who have responsibility for the development and maintenance of the internal control framework. I have drawn on performance information available to me. My review is also informed by comments made by the external auditors in their annual audit letter and other reports.

Our assurance framework provides me with evidence that the effectiveness of controls that manage risks to the clinical commissioning group achieving its principle objectives have been reviewed.

I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Governing Body, the Audit Committee and the Quality and Safety Committee, if appropriate and a plan to address weaknesses and ensure continuous improvement of the system is in place.

Managers within the organisation who have responsibility for the development and maintenance of the system of internal control provide me with assurance. The Assurance Framework itself provides me with evidence that the effectiveness of controls that manage the risks to the organisation achieving its principal objectives have been reviewed. My review is also informed by:

A number of individual internal audit reports relating to the CCG:

- Prescribing Budget

- Strategic Estates Plan

- Assurance Framework

- Quality of Services

- Better Care Fund

- IM&T Toolkit

- Personal Health Budgets

- Francis Action Plan monitoring

- All of the internal audits undertaken have received a Significant Assurance Opinion apart from the Quality of Services which received a limited assurance, which is currently a draft report and is yet to be finalised.

Work has been undertaken around Committee Effectiveness and findings are that the following are delivering their core duties effectively and continue to address the challenges associated with its wider remit.

Audit Committee;Quality and Safety Committee; andGoverning Body.

- External Audit via their Annual Audit Letter which provides a high level summary of audit work carried out.

- Regular team meetings

- Reports to Audit Committee by the Local Counter Fraud Specialists

- Information Governance Toolkit submission

- Review of the corporate risk register by the CCG Governing Body, Audit Committee and Clinical Executive Committee

- Scrutiny of the Assurance Framework by the Audit Committee, Clinical Executive Committee and Governing Body

- Regular meetings with Local Area Team of NHS England (Quality Surveillance Groups and quarterly assurance checkpoints)

- Attendance at the main providers of acute, community and mental health services quality committees /meetings

- The Strategic Plan 2015/16 which captures the clinical priorities

48 49

Director of Internal Audit OpinionFollowing completion of the planned audit work for the financial year for the clinical commissioning group, the Director of Internal Audit Opinion issued an independent and objective opinion on the adequacy and effectiveness of the clinical commissioning group’s system of risk management, governance and internal control. The Director of Internal Audit concluded that:

In accordance with Public Sector Internal Audit Standards, the Director of Internal Audit(HoIA) is required to provide an annual opinion, based upon and limited to the work performed, on the overall adequacy and effectiveness of the organisation’s risk management, control and governance processes (i.e. the organisation’s system of internal control). This is achieved through a risk-based plan of work, agreed with management and approved by the Audit Committee, which should provide a reasonable level of assurance subject to the inherent limitations described below. The outcomes and delivery of the internal audit plan are provided in Appendix A.

The purpose of this Director of Internal Audit Opinion is to contribute to the assurances available to the Accountable Officer and the Governing Body which underpin the Governing Body’s own assessment of the effectiveness of the organisation’s system of internal control. This Opinion will assist the Governing Body in the completion of its Annual Governance Statement (AGS), along with considerations of organisational performance, regulatory compliance and wider economy transformation.

My overall opinion is Significant Assurance can be given that that there is a generally sound system of internal control designed to meet the organisation’s objectives, and that controls are generally being applied

consistently. However, some weaknesses in the design or inconsistent application of controls put the achievement of a particular objective at risk.

The overall opinion is provided in the context of the level of risk awareness of the CCG and the targeted and effective use of Internal Audit as part of the system of internal control. Going forward the CCG faces a number of challenges, specifically the re-procurement of Urgent Care and Community Health Services. This alongside the challenges of performance delivery, financial performance and QIPP delivery will need to be effectively managed in the new financial year.

The basis for forming my opinion is as follows:

Assurance FrameworkThe organisation’s Assurance Framework is structured to meet the NHS requirements, is visibly used by the Governing Body and could more clearly reflect the risks discussed by the Governing Body.

Areas of enhancement are:The Governing Body should consider its assurance expectations in terms of Committee and how it uses the Committee updates/minutes provided in conjunction with the Assurance Framework.

Consideration of how the Assurance Framework reflects the risks across all the strategic objectives rather than just those deemed as high risk. In addition the Assurance Framework should include all strategic risks with a high impact rating (i.e. those most significant to achieving strategic objectives) and the CCG may wish to revisit the current impact ratings of some of the current risks on the Risk Register.

Access to servicesDocumentation, evaluation and review of the Better Care Fund, which provided Significant Assurance. We also undertook a review of the Strategic Estates Plan, providing a Significant Assurance opinion with action to address improvement to strategy timescales and the cross referencing source documentation and references.

Transparency and GovernanceReview of the organisations Assurance Framework as described above.

Patient participation and customer servicesThe systems and processes underpinning the CCG’s role in respect of Quality of Services providing an overall Limited Assurance. Actions are currently being agreed with Management to address the recommendations made.

Informed commissioningA Significant Assurance opinion was issued on the follow up of the 2014/15 Francis Action Plan Monitoring report. No new recommendations were raised, we confirmed that the four recommendations raised in the original review had been implemented and we concluded that Francis is embedded within the CCG, evidenced by review of agendas and minutes of the Quality and Safety Committee.

Personal Health Budgets was also provided with a Significant Assurance with enhanced control addressed through Management responses in respect of the work of the CSU Team.

IM&TThe mandated review of your Information Governance Toolkit concluded Significant Assurance.

Higher standardsCore systems surrounding the management of the Prescribing Budget (dressings) received Significant Assurance. The actions concerned completion and authorisation of prescribing off-formulary exception reporting, reliance on a few prescribers to prescribe for the overall Community Nursing Teams and low take up in gaining prescribing qualifications.

Follow upFollow-up review demonstrated good progress against action plans to improve systems and control, in line with agreed timeframes. Of the 23 recommendations raised across all audits, seven have been fully implemented, nine were partially implemented and seven were not due for implementation.

Action has been agreed by Management to address the recommendations made in the internal audit reviews and we will continue to undertake follow up of the recommendations to provide assurance to the Audit Committee that the issues raised have been addressed.

50 51

Data QualityThe Membership Council and Governing Body receive data relating to the performance of the CCG. This includes activity and financial data.

The quality of data received from hospitals we commission care from is routinely validated to ensure accuracy. If any anomalies or unexpected trends occur they are investigated.

Both financial and activity data is regularly discussed at both the Membership Council and the Governing Body. An integrated business report is a standard Governing Body item and can be found on the CCG’s website.

Business Critical ModelsBusiness Critical Models are mainly provided by the Midlands and Lancashire Commissioning Support Unit. They are subject to regular external review, the outputs of which are reported to Clinical Commissioning Groups through Service Auditor reports.

Within the CCG Business Critical Models tend to be spread-sheet based. These have all been identified and form part of the Clinical Commissioning Group’s Information Asset Register each with a suitably qualified Information Asset Owner, which is publicly available, subject to data confidentiality issues should they apply.

Data SecurityWe have submitted a satisfactory level of compliance with the information governance toolkit assessment.

Following the issue of national criteria in 2008 the CCG has to categorise all incidents involving personal confidential data. These are considered serious untoward incidents when involving data loss or confidentiality breaches. The table below provides definitions of the classification of incident severity the CCG must apply, zero being the lowest and five the highest.

The Information Governance Incident Reporting Tool on the HSCIC Information Governance Toolkit requires organisations registered with the Information Governance Toolkit to report incidents that are categorised at Level 2 or above. Incidents, where appropriate, may be escalated to organisations such as Care Quality Commission or NHS England. The HSCIC will publish all incidents reported and categorised at Level 2 or above on a quarterly basis via the Information Governance Toolkit.

Contribution to Governance, Risk Management and Internal Control Enhancements:- Detailed insight into the overall

Governance and Assurance processes gained from liaison throughout the year with the Officer/Senior Management Team.

- Involvement with the organisation in respect of advice and guidance relating to corporate governance documentation such as the Assurance Framework.

- Involvement and relationship with the organisation. Ongoing discussion with lead Officers, Managers and Lay Members throughout the year.

- Effective utilisation of internal audit including in year communication, requests for changes to the audit plan in respect of Continuing Healthcare.

- Provision of MIAA briefings including Cyber Security and update on Investigations in the NHS.

- Involvement through MIAA events, including Lay Member Learning Series, and Audit Committee Chairs.

- Engagement with MIAA Insights benchmarking and outcome reporting, including Assurance Frameworks, Annual Governance Statements, Financial Control Evaluation Assessment and Losses and Compensation.

In providing this opinion I can confirm continued compliance with the definition of internal audit (as set out in your Internal Audit Charter), code of ethics and professional standards. I also confirm organisational independence of the audit activity and that this has been free from interference in respect of scoping, delivery and reporting.

The opinion is derived from the conduct of risk based plans generated from a robust and organisation-led Assurance Framework. The opinion does not imply that Internal Audit have reviewed all risks and assurances relating to the organisation.

During the year internal audit issued one limited assurance report on Quality of Services this is currently in draft and hasn’t been finalised.

During the the Internal Audit issued no audit reports with a conclusion of no assurance.

50

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Discharge of Statutory FunctionsDuring establishment, the arrangements put in place by the clinical commissioning group and explained within the Corporate Governance Framework were developed with extensive expert external legal input, to ensure compliance with all relevant legislation. That legal advice also informed the matters reserved for Membership Body and Governing Body decision and the scheme of delegation.

In light of the Harris Review, the clinical commissioning group has reviewed all of the statutory duties and powers conferred on it by the National Health Service Act 2006 (as amended) and other associated legislation and regulations. As a result, I can confirm that the clinical commissioning group is clear about the legislative requirements associated with each of the statutory functions for which it is responsible, including any restrictions on delegation of those functions.

Responsibility for each duty and power has been clearly allocated to a lead senior manager. Senior managers have confirmed that their structures provide the necessary capability and capacity to undertake all of the clinical commissioning group’s statutory duties.

Conclusion The system of internal control has been in place in the Clinical Commissioning Group for the year ended 31 March 2016, and up to the date of approval of the annual report and accounts. Based on the work undertaken in 2015/16, significant assurance has been given by the Head of Internal Audit that there is a generally sound system of internal control, designed to meet the organisations objectives, and that controls are generally being applied consistently. No significant issues have been identified.

Mike MaguireAccountable Officer

24th May 2016

All NHS organisations are required to summarise all such incidents classified as 1-2 in their annual report and individually, detail of incidents classified 3-5. The latter classification of incident must also be reported to the NHS Commissioning Board and the Office of the Information Commissioner.

There have been no significant control issues involving data losses reported at level 2 or above to the Information Commissioner or as a Serious Incident.

There has also been no reportable incidents at level 0-2 as shown in the table below.

Summary of other personal data related incidents 2015/16

Category Nature of incident Total

i Loss of inadequately protected electronic equipment, devices or paper documents from secured NHS premises

0

ii Loss of inadequately protected electronic equipment, devices or paper documents from outside secured NHS premises

0

iii Insecure disposal of inadequately protected electronic equipment, devices or paper documents

0

iv Unauthorised disclosure 0

v Other 0

Definitions of the classification of incident severity

0 1 2 3 4 5

No significant reflection on any individual or body. Media interest very unlikely.

Damage to an individual’s reputation. Possible media interest e.g. celebrity involved.

Damage to a team’s reputation. Some local media interest that may not go public.

Damage to a service’s reputation. Low key local media coverage.

Damage to an organisation’s reputation. Local media coverage.

Damage to NHS reputation. National media coverage.

Minor breach of confidentiality. Only a single individual affected.

Potentially serious breach. Less than five people affected or risk assessed as low e.g. files were encrypted.

Serious potential breach and risk assessed high e.g. unencrypted clinical records lost. Up to 20 people affected.

Serious breach of confidentiality e.g. up to 100 people affected.

Serious breach with either particular sensitivity e.g. sexual health details or up to 1,000 people affected.

Serious breach with potential for ID theft or over 1000 people affected.

54 5554

NHS West Lancashire CCG Remuneration and Terms of Service Committee

The committee was established by NHS West Lancashire CCG to approve the remuneration and terms of service for the chief officer, other staff on very senior manager (VSM) pay terms and conditions and GP governing body members.

Pay for board members and other senior staff was mainly on nationally determined pay rates. Where pay was determined locally this was agreed by the committee.

In view of the major change agenda facing the CCG and a wish to try and maintain continuity in the Senior Management of the organisation, the Remuneration Committee recommended the notice period for the past of Chief Officer be extended to 12 months by either party and for the posts of Chief Finance Officer and Chief Nurse be extended to 6 months by either party. These recommendations were accepted by the Governing Body.

The remuneration committee met once in 2015/16. In the first year of operation the remuneration committee has set baseline salaries in accordance with national and local guidance, and the performance elements required of bands 8c and above under agenda for change.

It was the responsibility of the committee in its discussions to:

- include all aspects of salary (including any performance related element, bonuses and any other allowances), provisions for other benefits including pensions and car allowance, and arrangements for termination of employment and other contractual issues in decision making.

- approve any non-contractual payments at any level that may be regarded as novel and/or contentious and which required Treasury approval.

The policy on senior managers’ contracts was that they were permanent except where an explicit fixed-term role was identified. The standard notice period was between three and six months. The contract was a standard contract used for all CCG staff so there were no end dates.

Bonus payments for performance in the year 2015/16 - no bonus payments were awarded by the remuneration committee during the year.

Remuneration and Staff Report 2015/16

57

Single total figure table (subject to audit)

2015/16

Name Title Salary & Fees

(Bands of £5,000)

£000

Taxable Benefits

(Rounded to nearest £00)

£000

Annual Performance

Related Bonuses

(Bands of £5,000)

£000

Long-termPerformance

Related Bonuses

(Bands of £5,000)

£000

All PensionRelated Benefits

(Bands of £2,500)

£000

Total

(Bands of £5,000)

£000

Mike Maguire Chief Officer 110-115 95 - - 0-0 115-120

Paul Kingan Chief Finance Officer 85-90 25 - - 40-42.5 130-135

Claire Heneghan Chief Nurse 80-85 - - - 15-17.5 95-100

Dr John Caine Chair 105-110 3 - - 27.5-30.0 135-140

Dr Bapi Biswas GP Lead 50-55 - - - 25-27.5 80-85

Dr John (Jack) Kinsey GP Lead & Macmillan GP 55-60 - - - 12.5-15 70-75

Dr Ros Bonsor GP Lead 35-40 - - - 7.5-10 40-45

Dr Simon Frampton GP Lead 35-40 - - - - 35-40

Dr Peter Gregory GP Lead 35-40 - - - 15-17.5 50-55

Doug Soper Lay Member 5-10 4 - - - 5-10

Greg Mitten Lay Member 5-10 - - - - 5-10

Dr Adam Robinson Secondary Care Board Member

10-15 - - - - 10-15

2014/15

Name Title Salary & Fees

(Bands of £5,000)

£000

Taxable Benefits

(Rounded to nearest £00)

£000

Annual Performance

Related Bonuses

(Bands of £5,000)

£000

Long-termPerformance

Related Bonuses

(Bands of £5,000)

£000

All PensionRelated Benefits

(Bands of £2,500)

£000

Total

(Bands of £5,000)

£000

Mike Maguire Chief Officer 110-115 70 - - 15-17.5 130-135

Paul Kingan Chief Finance Officer 85-90 2 - - 30-32.5 115-120

Claire Heneghan Chief Nurse 80-85 - - - - 80-85

Dr John Caine Chair 105-110 - - - 20-22.5 130-135

Dr Bapi Biswas GP Lead 50-55 2 - - 30-32.5 85-90

Dr John (Jack) Kinsey GP Lead & Macmillan GP 50-55 - - - 120-122.5 175-180

Dr Ros Bonsor GP Lead 35-40 - - - 5-7.5 40-45

Dr Simon Frampton GP Lead 35-40 - - - - 35-40

Dr Peter Gregory Appointed 23 Sep 2014

GP Lead 15-20 - - - 7.5-10 25-30

Doug Soper Lay Member 5-10 5 - - - 5-10

Greg Mitten Lay Member 5-10 - - - - 5-10

Dr Adam Robinson Secondary Care Board Member

10-15 - - - - 10-15

56

Notes1. 2014/15 figures are disclosed to enable

comparison with the current year.

2. Adam Robinson is an employee of Salford Royal NHS Foundation Trust. The value in the Salary and Fees column represents the charges made by those organisations in respect of his time spent working for West Lancashire CCG.

3. The taxable benefits listed above relate to lease cars and reimbursement of travel expenses.

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Pension Benefits for Senior Managers (subject to audit)

Name Real increase in pension atPension Age

(Bands of £2,500)

£000

Real increase in pension

lump sum at Pension Age

(Bands of £2,500)

£000

Total accruedpension at

Pension Age as at 31 March 2016

(Bands of £5,000)

£000

Lump sum atPension

Age related to accrued

pensionat 31 March

2016

(Bands of £5,000)

£000

Cash equivalent

transfer value at 1 April 2015

£000

Cash equivalent

transfervalue at 31

March 2016

£000

Real increase in

cash equivalent

transfer value

£000

Employer’scontribution to

stakeholderpension

£000

Mike Maguire Chief Officer

(2.5)-0 2.5-5 40-45 135-140 834 865 21 -

Paul Kingan Chief Finance Officer

0-2.5 0-2.5 20-25 65-70 316 341 22 -

Claire Heneghan Chief Nurse

0-2.5 0-2.5 20-25 70-75 486 512 20 -

Dr John Caine Chair

0-2.5 2.5-5 15-20 45-50 271 300 26 -

Dr Bapi Biswas GP Lead

2.5-5 (25.5)-(30) 10-15 0-5 168 210 41 -

Dr John (Jack) Kinsey GP Lead

0-2.5 0-2.5 10-15 35-40 165 173 6 -

Dr Ros Bonsor GP Lead

0-2.5 0-2.5 15-20 50-55 315 330 11 -

Dr Peter Gregory GP Lead

0-2.5 0-2.5 10-15 30-35 138 145 6 -

NotesFigures in brackets represent negative values.

Certain Members do not receive pensionable remuneration therefore there will be no entries in respect of pensions for certain Members.

As Lay Members do not receive pensionable remuneration, there are no entries in respect of pensions for Lay Members.

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Cash Equivalent Transfer Values A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the members’ accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension schemes or arrangement when the member leaves a scheme and chooses to transfer the benefit accrued in their former scheme. The pensions figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies. No CETV will be shown for members over 60 (1995 Section).

Real Increase in CETV This reflects the increase in CETV effectively funded by the employer. It takes account of the increase in accrued pensions due to inflation, contributions paid by the employee (including the value of any benefits transferred from another scheme or arrangement).

On 16 March 2016, the Chancellor of the Exchequer announced a change in the Superannuation Contributions Adjusted for Past Experience (SCAPE) discount rate from 3.0% to 2.8%. This rate affects the calculation of CETV figures in this report. Due to the lead time required to perform calculations and prepare annual reports, the CETV figures quoted in this report for members of the NHS Pension scheme are based on the previous discount rate and have not been recalculated.

Pay multiples (subject to audit)Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid member in their organisation and the median remuneration of the organisation’s workforce.

The calculation is based on the full-time equivalent annualised salaries of NHS West Lancashire CCG staff as at 31 March 2016. Total remuneration includes salary, non-consolidated performance-related pay and benefits-in-kind. It does not include severance payments, employer pension contributions or the cash equivalent transfer value of pensions. For the purposes of this calculation the CCG has treated all GP Leads as employees, but not Lay Members. The calculation of the annualised full time equivalent salary for the Secondary Care Board Member reflects the different role pertaining to that individual.

The mid point of the banded remuneration of highest paid member of the Governing Body in the 2015-16 financial year was £182.5k (unchanged from 2014-15). This represents the full time equivalent salary of an individual employed on a part time basis. This was 4.46 times (2014-15 4.33 times) the median remuneration of the workforce,which was £40,964 (2014-15 £42,190).

The median salary has decreased because of the recruitment of new members of staff whose salary is below the previous year’s median. As a consequence the pay multiple has increased.In 2015-16 no employees received remuneration in excess of the highest paid member of the Governing Body.Remuneration ranged from £8k to £182k.

Our staff and membership (subject to audit) The CCG’s performance in this is regulated by NHS England. We are a small CCG, so we buy in support services from the Midlands and Lancashire NHS Commissioning Support Unit. We also receive support from public health colleagues from Lancashire County Council.

The member makeup of the governing body is 2 females and 10 males. One of the 12 members is on the very senior manager pay scale. Our membership council comprises 24 GPs, (5 female and 19 male principal representatives) other GP’s and Practice managers from the Practices do attend the meetings if the Principal member cannot attend.

Senior staff banding (subject to audit) We have six Senior Managers (excluding Governing body) at band 8b and above of which one is male and five are female. The bandings are listed below:

Table of senior managers by band

Band Number

8D 1

8C 3

8B 2

Total 6

We have a support team of 23 staff (excluding the chief officer, chief finance officer and senior managers). Of these 23 staff, 20 are female and 3 are male. An analysis of staff numbers can be found in the financial statements note 4.2

This year, we also further considered the health and wellbeing of our own staff by undertaking an audit, which is due to report in 2016/17.

Employee consultation We encourage participation from our staff in the following ways:- Live Q&A sessions with staff from

project teams

- Weekly e-bulletin to CCG staff (and support staff as required)

- Internal communication steering group

- Weekly organisation wide team meetings

- Intranet

- The CCG also regularly attends the Joint Partnership Forum, which is a trade union and employer forum for the development and implementation of employment policy.

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For all new off-payroll engagements between 1 April 2015 and 31 March 2016, for more than £220 per day and that lasted longer than six months:

Number

Number of new engagements or those that reached six months in duration, between 1 April 2015 and 31 March 2016

0

Number of new engagements which include contractual clauses giving the NHS West Lancashire CCG the right to request assurance in relation to income tax and National Insurance obligations

1

Number for whom assurance has been requested 1

Of which; 0

assurance has been received 2

assurance has not been received 0

engagements terminated as a result of assurance not being received 0

Number of off-payroll engagements of board members, and /or senior officers with significant financial responsibility, during the financial year.

0

Total no. of individuals on payroll and off payroll that have been deemed “board members, and /or senior officers with significant financial responsibility”, during the financial year. This figure should include both on payroll and off-payroll engagements.

12

Exit packagesThe clinical commissioning group had not agreed any exit packages as at 31 March 2016 or for the prior year ending 31 March 2015.

Sickness absence data The sickness absence data can be found in financial statements note 4.3.

Staff PoliciesThere have not been any new staff policies this year.

Expenditure on consultancyDetails of expenditure on consultancy can be found in note 5 of the financial statements.

Off payroll engagementsThe CCG is required to report on certain off- payroll arrangements.

All off-payroll engagements as of 31 March 2016, for more than £220 per day and that last longer than six months:

Number

Number of existing engagements as of 31 March 2016 4

Of which, the number that have existed :

For less than one year at the time of reporting 1

For between one and two years at the time of reporting 3

For between 2 and 3 years at the time of reporting 0

For between 3 and 4 years at the time of reporting 0

For 4 or more years at the time of reporting 0

All existing off-payroll engagements as at 31st March 2016 have been subject to a risk based assessment as to whether assurance is required that the individual is paying the right amount of tax and, where necessary, that assurance has been sought.

64 65

We have audited the financial statements of NHS West Lancashire CCG for the year ended 31 March 2016 under the Local Audit and Accountability Act 2014 (the “Act”). The financial statements comprise the Statement of Comprehensive Net Expenditure, the Statement of Financial Position, the Statement of Changes in Taxpayers’ Equity, the Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as interpreted and adapted by the 2015/16 Government Financial Reporting Manual (the 2015/16 FReM) as contained in the Department of Health Group Manual for Accounts 2015/16 (the 2015/16 MfA) and the Accounts Direction issued by the NHS Commissioning Board with the approval of the Secretary of State as relevant to the National Health Service in England (the Accounts Direction).

We have also audited the information in the Remuneration and Staff Report that is subject to audit, being:

- the table of salaries and allowances of senior managers and related narrative notes

- the table of pension benefits of senior managers and related narrative notes

- the analysis of staff numbers and related narrative notes; and

- the tables of pay multiples and related narrative notes

This report is made solely to the members of the Governing Body of NHS West Lancashire CCG, as a body, in accordance with Part 5 of the Act and as set out in paragraph 43 of the Statement of Responsibilities of Auditors and Audited Bodies published by Public Sector Audit Appointments Limited. Our audit work has been undertaken so that we might state to the members of the Governing Body of the CCG those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the CCG and the members of the Governing Body of the CCG, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Accountable Officer and auditorAs explained more fully in the Statement of Accountable Officer’s Responsibilities, the Accountable Officer is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and is also responsible for ensuring the regularity of expenditure and income. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. We are also responsible for giving an opinion on the regularity of expenditure and income in accordance with the Code of Audit Practice prepared by the Comptroller and Auditor General as required by the Act (the “Code of Audit Practice”).

As explained in the Annual Governance Statement the Accountable Officer is responsible for the arrangements to secure economy, efficiency and effectiveness in the use of the CCG’s resources. We are required under Section 21 (1)(c) of the Act to be satisfied that the CCG has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources and to report our opinion as required by Section 21(4)(b) of the Act.

We are not required to consider, nor have we considered, whether all aspects of the CCG’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the CCG’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Accountable Officer; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

In addition, we are required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

Scope of the review of arrangements for securing economy, efficiency and effectiveness in the use of resourcesWe have undertaken our review in accordance with the Code of Audit Practice, having regard to the guidance on the specified criteria, issued by the Comptroller and Auditor General in November 2015, as to whether the CCG had proper arrangements to ensure it took properly informed decisions and deployed resources to achieve planned and sustainable outcomes for taxpayers and local people. The Comptroller and Auditor General determined these criteria as that necessary for us to consider under the Code of Audit Practice in satisfying ourselves whether the CCG put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2016, and to report by exception where we are not satisfied.

We planned our work in accordance with the Code of Audit Practice. Based on our risk assessment, we undertook such work as we considered necessary to form a view on whether, in all significant respects, the CCG had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

Independent auditor’s report to the members of the governing body of NHS West Lancashire CCG

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Opinion on financial statementsIn our opinion the financial statements:

- give a true and fair view of the financial position of NHS West Lancashire CCG as at 31 March 2016 and of its expenditure and income for the year then ended; and

- have been prepared properly in accordance with IFRSs as adopted by the European Union, as interpreted and adapted by the 2015/16 FReM as contained in the 2015/16 MfA and the Accounts Direction.

Opinion on regularityIn our opinion, in all material respects the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions in the financial statements conform to the authorities which govern them.

Opinion on other mattersIn our opinion:

- the parts of the Remuneration and Staff Report to be audited have been properly prepared in accordance with IFRSs as adopted by the European Union, as interpreted and adapted by the 2015/16 FReM as contained in the 2015/16 MfA and the Accounts Direction; and

- the other information published together with the audited financial statements in the annual report and accounts is consistent with the financial statements.

Matters on which we are required to report by exceptionWe are required to report to you if:- in our opinion the governance

statement does not comply with the guidance issued by the NHS Commissioning Board; or

- we refer a matter to the Secretary of State under section 30 of the Act because we have reason to believe that the CCG, or an officer of the CCG, is about to make, or has made, a decision which involves or would involve the body incurring unlawful expenditure, or is about to take, or has begun to take a course of action which, if followed to its conclusion, would be unlawful and likely to cause a loss or deficiency; or

- we issue a report in the public interest under section 24 of the Act; or

- we make a written recommendation to the CCG under section 24 of the Act; or

- we are not satisfied that the CCG has made proper arrangements for securing economy, efficiency and effectiveness in its use of its resources for the year ended 31 March 2016.

We have nothing to report in these respects.

CertificateWe certify that we have completed the audit of the accounts of NHS West Lancashire CCG in accordance with the requirements of the Act and the Code of Audit Practice.

Fiona Blatcherfor and on behalf of Grant Thornton UK LLP, Appointed AuditorGrant Thornton UK LLP, 4 Hardman StreetManchester, M3 3EB

24 May 2016

6968

The Primary Statements:Statement of Comprehensive Net Expenditure for the year ended 31st March 2016 70 Statement of Financial Position as at 31st March 2016 71 Statement of Changes in Taxpayers’ Equity for the year ended 31st March 2016 72 Statement of Cash Flows for the year ended 31st March 2016 74

Contents1. Accounting policies 77 2. Other operating revenue 84 3. Revenue 84 4. Employee benefits and staff numbers 86 5. Operating expenses 90 6. Better payment practice code 91 7. Income generation activities 91 8. Operating leases 92 9. Trade and other receivables 93 10. Cash and cash equivalents 95 11. Trade and other payables 95 12. Provisions 96 13. Contingencies 98 14. Financial instruments 98 15. Operating segments 101 16. Pooled budgets 101 17. Related party transactions 102 18. Events after the end of the reporting period 104 19. Third party assets 104 20. Financial performance targets 105 21. Impact of IFRS 105

Financial statements

70 71

Statement of Financial Position as at 31 March 2016

Note 2015-16£000

2014-15£000

Non-current assets:

Property, plant and equipment - -

Intangible assets - -

Investment property - -

Trade and other receivables - -

Other financial assets - -

Total non-current assets - -

Current assets:

Inventories - -

Trade and other receivables 9 1,539 1,700

Other financial assets - -

Other current assets - -

Cash and cash equivalents 10 39 2

Total current assets 1,578 1,702

Non-current assets held for sale - -

Total current assets 1,578 1,702

Total assets 1,578 1,702

Current liabilities

Trade and other payables 11 (6,805) (6,880)

Other financial liabilities - -

Other liabilities - -

Borrowings - -

Provisions - -

Total current liabilities (6,805) (6,880)

Non-Current Assets plus/less Net Current Assets/Liabilities (5,227) (5,178)

Non-current liabilities

Trade and other payables - -

Other financial liabilities - -

Other liabilities - -

Borrowings - -

Provisions 12 (43) (85)

Total non-current liabilities (43) (85)

Assets less Liabilities (5,270) (5,263)

Financed by Taxpayers’ Equity

General fund (5,270) (5,263)

Revaluation reserve - -

Other reserves - -

Charitable Reserves - -

Total taxpayers’ equity: (5,270) (5,263)

The notes on pages 77 to 105 form part of this statement

The financial statements on pages 70 to 105 were approved by the Governing Body on 24 May 2016 and signed on its behalf by:

Mike MaguireChief Officer

24th May 2016

Statement of Comprehensive Net Expenditure for the year ended 31 March 2016

Note 2015-16£000

2014-15£000

Total Income and Expenditure

Employee benefits 4.1.1 2,119 1,545

Operating Expenses 5 144,479 139,064

Other operating revenue 2 (213) (257)

Net operating expenditure before interest 146,385 140,352

Investment Revenue - -

Other (gains)/losses - -

Finance costs - -

Net operating expenditure for the financial year 146,385 140,352

Net (gain)/loss on transfers by absorption - -

Total Net Expenditure for the year 146,385 140,352

Of which:

Administration Income and Expenditure

Employee benefits 4.1.1 1,434 1,456

Operating Expenses 5 1,034 1,143

Other operating revenue 2 (18) (11)

Net administration costs before interest 2,450 2,589

Programme Income and Expenditure

Employee benefits 4.1.1 685 88

Operating Expenses 5 143,445 137,921

Other operating revenue 2 (195) (246)

Net programme expenditure before interest 143,935 137,763

Other Comprehensive Net Expenditure

Impairments and reversals - -

Net gain/(loss) on revaluation of property, plant & equipment - -

Net gain/(loss) on revaluation of intangibles - -

Net gain/(loss) on revaluation of financial assets - -

Movements in other reserves - -

Net gain/(loss) on available for sale financial assets - -

Net gain/(loss) on assets held for sale - -

Net actuarial gain/(loss) on pension schemes - -

Share of (profit)/loss of associates and joint ventures - -

Reclassification Adjustments

On disposal of available for sale financial assets - -

Total comprehensive net expenditure for the year 146,385 140,352

The notes on pages 77-105 form part of this statement

72 73

Statement of Changes In Taxpayers Equity for the year ended 31 March 2016

General fund£000

Revaluation reserve

£000

Other reserves

£000

Total reserves

£000

Changes in taxpayers’ equity for 2015-16

Balance at 1 April 2015 (5,263) - - (5,263)

Transfer between reserves in respect of assets transferred from closed NHS bodies

- - - -

Adjusted NHS Clinical Commissioning Group balance at 1 April 2015

(5,263) - - (5,263)

Changes in NHS Clinical Commissioning Group taxpayers’ equity for 2015-16

Net operating expenditure for the financial year (146,385) (146,385)

Net gain/(loss) on revaluation of property, plant and equipment - -

Net gain/(loss) on revaluation of intangible assets - -

Net gain/(loss) on revaluation of financial assets - -

Total revaluations against revaluation reserve - - - -

Net gain (loss) on available for sale financial assets - - - -

Net gain (loss) on revaluation of assets held for sale - - - -

Impairments and reversals - - - -

Net actuarial gain (loss) on pensions - - - -

Movements in other reserves - - - -

Transfers between reserves - - - -

Release of reserves to the Statement of Comprehensive Net Expenditure

- - - -

Reclassification adjustment on disposal of available for sale finan-cial assets

- - - -

Transfers by absorption to (from) other bodies - - - -

Reserves eliminated on dissolution - - - -

Net Recognised NHS Clinical Commissioning Group Expenditure for the Financial Year

(151,649) - - (151,649)

Net funding 146,379 - - 146,379

Balance at 31 March 2016 (5,270) - - (5,270)

The notes on pages 77-105 form part of this statement

General fund£000

Revaluation reserve

£000

Other reserves

£000

Total reserves

£000

Changes in taxpayers’ equity for 2014-15

Balance at 1 April 2014 (4,652) - - (4,652)

Transfer of assets and liabilities from closed NHS bodies as a result of the 1 April 2013 transition

- - - -

Adjusted NHS Commissioning Board balance at 1 April 2014

(4,652) - - (4,652)

Changes in NHS Commissioning Board taxpayers’ equity for 2014-15

Net operating costs for the financial year (140,351) (140,351)

Net gain/(loss) on revaluation of property, plant and equipment - -

Net gain/(loss) on revaluation of intangible assets - -

Net gain/(loss) on revaluation of financial assets - -

Total revaluations against revaluation reserve - - - -

Net gain (loss) on available for sale financial assets - - - -

Net gain (loss) on revaluation of assets held for sale - - - -

Impairments and reversals - - - -

Net actuarial gain (loss) on pensions - - - -

Movements in other reserves - - - -

Transfers between reserves - - - -

Release of reserves to the Statement of Comprehensive Net Expenditure

- - - -

Reclassification adjustment on disposal of available for sale finan-cial assets

- - - -

Transfers by absorption to (from) other bodies - - - -

Reserves eliminated on dissolution - - - -

Net Recognised NHS Commissioning Board Expenditure for the Financial Year

(145,003) - - (145,003)

Net funding 139,739 - - 139,739

Balance at 31 March 2015 (5,263) - - (5,263)

74 75

Statement of Cash Flows for the year ended 31 March 2016

Note 2015-16£000

2014-15£000

Cash Flows from Operating Activities

Net operating expenditure for the financial year (146,386) (140,351)

Depreciation and amortisation 5 - -

Impairments and reversals 5 - -

Movement due to transfer by Modified Absorption - -

Other gains (losses) on foreign exchange - -

Donated assets received credited to revenue but non-cash - -

Government granted assets received credited to revenue but non-cash - -

Interest paid - -

Release of PFI deferred credit - -

Other Gains & Losses - -

Finance Costs - -

Unwinding of Discounts - -

(Increase)/decrease in inventories - -

(Increase)/decrease in trade & other receivables 9 161 324

(Increase)/decrease in other current assets - -

Increase/(decrease) in trade & other payables 11 (74) 122

Increase/(decrease) in other current liabilities - -

Provisions utilised 12 - (8)

Increase/(decrease) in provisions 12 (42) -

Net Cash Inflow (Outflow) from Operating Activities (146,341) (139,913)

Note 2015-16£000

2014-15£000

Cash Flows from Investing Activities

Interest received - -

(Payments) for property, plant and equipment - -

(Payments) for intangible assets - -

(Payments) for investments with the Department of Health - -

(Payments) for other financial assets - -

(Payments) for financial assets (LIFT) - -

Proceeds from disposal of assets held for sale: property, plant and equipment - -

Proceeds from disposal of assets held for sale: intangible assets - -

Proceeds from disposal of investments with the Department of Health - -

Proceeds from disposal of other financial assets - -

Proceeds from disposal of financial assets (LIFT) - -

Loans made in respect of LIFT - -

Loans repaid in respect of LIFT - -

Rental revenue - -

Net Cash Inflow (Outflow) from Investing Activities - -

Net Cash Inflow (Outflow) before Financing (146,341) (139,913)

Cash Flows from Financing Activities

Grant in Aid Funding Received 146,379 139,739

Other loans received - -

Other loans repaid - -

Capital element of payments in respect of finance leases and on Statement of Financial Position PFI and LIFT

- -

Capital grants and other capital receipts - -

Capital receipts surrendered - -

Net Cash Inflow (Outflow) from Financing Activities 146,379 139,739

Net Increase (Decrease) in Cash & Cash Equivalents 10 38 (174)

Cash & Cash Equivalents at the Beginning of the Financial Year 2 176

Effect of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies

- -

Cash & Cash Equivalents (including bank overdrafts) at the End of the Financial Year 40 2

The notes on pages 77-105 form part of this statement

7776

Notes to the financial statements

1.0 Accounting PoliciesNHS England has directed that the financial statements of clinical commissioning groups shall meet the accounting requirements of the Manual for Accounts issued by the Department of Health. Consequently, the following financial statements have been prepared in accordance with the Manual for Accounts 2015-16 issued by the Department of Health. The accounting policies contained in the Manual for Accounts follow International Financial Reporting Standards to the extent that they are meaningful and appropriate to clinical commissioning groups, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the Manual for Accounts permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the clinical commissioning group for the purpose of giving a true and fair view has been selected. The particular policies adopted by the clinical commissioning group are described below. They have been applied consistently in dealing with items considered material in relation to the accounts.

1.1 Going ConcernThese accounts have been prepared on the going concern basis.Public sector bodies are assumed to be going concerns where the continuation of the provision of a service in the future is anticipated, as evidenced by inclusion of financial provision for that service in published documents.

Where a clinical commissioning group ceases to exist, it considers whether or not its services will continue to be provided

(using the same assets, by another public sector entity) in determining whether to use the concept of going concern for the final set of Financial Statements. If services will continue to be provided the financial statements are prepared on the going concern basis.

1.2 Accounting ConventionThese accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment, intangible assets, inventories and certain financial assets and financial liabilities.

1.3 Movement of Assets within the Department of Health GroupTransfers as part of reorganisation fall to be accounted for by use of absorption accounting in line with the Government Financial Reporting Manual, issued by HM Treasury. The Government Financial Reporting Manual does not require retrospective adoption, so prior year transactions (which have been accounted for under merger accounting) have not been restated. Absorption accounting requires that entities account for their transactions in the period in which they took place, with no restatement of performance required when functions transfer within the public sector. Where assets and liabilities transfer, the gain or loss resulting is recognised in the Statement of Comprehensive Net Expenditure, and is disclosed separately from operating costs.

Other transfers of assets and liabilities within the Department of Health Group are accounted for in line with IAS 20 and similarly give rise to income and expenditure entries.

78 79

1.4 Pooled BudgetsWhere the clinical commissioning group has entered into a pooled budget arrangement under Section 75 of the National Health Service Act 2006 the clinical commissioning group accounts for its share of the assets, liabilities, income and expenditure arising from the activities of the pooled budget, identified in accordance with the pooled budget agreement.

If the clinical commissioning group is in a “jointly controlled operation”, the clinical commissioning group recognises:

- The assets the clinical commissioning group controls;

- The liabilities the clinical commissioning group incurs;

- The expenses the clinical commissioning group incurs; and,

- The clinical commissioning group’s share of the income from the pooled budget activities.

1.5 Critical Accounting Judgements & Key Sources of Estimation UncertaintyIn the application of the clinical commissioning group’s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from those estimates and the estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

1.5.1 Critical Judgements in Applying Accounting PoliciesThe following are the critical judgements, apart from those involving estimations (see below) that management has made in the process of applying the clinical commissioning group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements:

- Joint operations are activities undertaken by the clinical commissioning group in conjunction with one or more other parties but which are not performed through a separate entity. The clinical commissioning group has a joint operation in relation to the Better Care Fund as there is joint control with Lancashire County Council and other clinical commissioning groups in Lancashire. The clinical commissioning group records its share of the income and expenditure; gains and losses; and cash flows. Additional information is disclosed in note 16.

- The clinical commissioning group’s portfolio of leases has been reviewed and a management judgement has been made that the leases should be classified as operating leases. Additional information is disclosed in note 8.

1.5.2 Key Sources of Estimation UncertaintyThe following are the key estimations that management has made in the process of applying the clinical commissioning group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements:

- Timing differences. There are a number of accruals (totalling £2.231m) within the Statement of Financial Position where estimation techniques are applied. This is because the outturn information is not available at the time of preparation of the financial statements.

- Contract Payments to NHS Providers. The CCG has a number of contracts with NHS Trusts for the provision of Healthcare Services. Where block contract arrangements apply, or a final settlement has been agreed with the Trust, no estimations are required. For other organisations the forecast has been based upon Month 11 contract monitoring data and therefore an estimate of the value of activity undertaken in Month 12 has been made (totalling £1.442m) These estimates are included in the total value of accruals and prepayments listed above.

- Prescribing. The £2.719m prescribing accrual is based on the latest (January) forecast outturn provided by the NHS Business Services Authority ( NHS BSA). This forecast is based on a national expenditure profile as published on the NHS BSA website. In the previous financial year the same methodology wsa accurate to within £95k (0.53%)

1.6 RevenueRevenue in respect of services provided is recognised when, and to the extent that, performance occurs, and is measured at the fair value of the consideration receivable.

Where income is received for a specific activity that is to be delivered in the following year, that income is deferred.

1.7 Employee Benefits

1.7.1 Short-term Employee BenefitsSalaries, wages and employment-related payments are recognised in the period in which the service is received from employees, including bonuses earned but not yet taken.

1.7.2 Retirement Benefit CostsPast and present employees are covered by the provisions of the NHS Pensions Scheme. The scheme is an unfunded,

defined benefit scheme that covers NHS employers, General Practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as if it were a defined contribution scheme: the cost to the clinical commissioning group of participating in the scheme is taken as equal to the contributions payable to the scheme for the accounting period.

For early retirements other than those due to ill health the additional pension liabilities are not funded by the scheme. The full amount of the liability for the additional costs is charged to expenditure at the time the clinical commissioning group commits itself to the retirement, regardless of the method of payment.

1.8 Other ExpensesOther operating expenses are recognised when, and to the extent that, the goods or services have been received. They are measured at the fair value of the consideration payable.

Expenses and liabilities in respect of grants are recognised when the clinical commissioning group has a present legal or constructive obligation, which occurs when all of the conditions attached to the payment have been met.

1.9 LeasesLeases are classified as finance leases when substantially all the risks and rewards of ownership are transferred to the lessee. All other leases are classified as operating leases.

80 81

1.9.1 The Clinical Commissioning Group as LesseeProperty, plant and equipment held under finance leases are initially recognised, at the inception of the lease, at fair value or, if lower, at the present value of the minimum lease payments, with a matching liability for the lease obligation to the lessor. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate on interest on the remaining balance of the liability. Finance charges are recognised in calculating the clinical commissioning group’s surplus/deficit.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease incentives are recognised initially as a liability and subsequently as a reduction of rentals on a straight-line basis over the lease term.Contingent rentals are recognised as an expense in the period in which they are incurred.

Where a lease is for land and buildings, the land and building components are separated and individually assessed as to whether they are operating or finance leases.

1.10 Cash & Cash EquivalentsCash is cash in hand and deposits with any financial institution repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments that mature in 3 months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and that form an integral part of the clinical commissioning group’s cash management.

1.11 ProvisionsProvisions are recognised when the clinical commissioning group has a present legal or constructive obligation as a result of a past event, it is probable that the clinical commissioning group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the obligation at the end of the reporting period, taking into account the risks and uncertainties. Where a provision is measured using the cash flows estimated to settle the obligation, its carrying amount is the present value of those cash flows using HM Treasury’s discount rate as follows:

- Timing of cash flows (0 to 5 years inclusive): Minus 1.55% (2014-15: minus 1.50%)

- Timing of cash flows (6 to 10 years inclusive): Minus 1% (2014-15: minus 1.05%)

- Timing of cash flows (over 10 years): Plus 0.80% (2014-15: minus 2.20%)

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursements will be received and the amount of the receivable can be measured reliably.

1.12 Non-clinical Risk PoolingThe clinical commissioning group participates in the Property Expenses Scheme and the Liabilities to Third Parties Scheme. Both are risk pooling schemes under which the clinical commissioning group pays an annual contribution to the NHS Litigation Authority and, in return, receives assistance with the costs of claims arising. The annual membership contributions, and any excesses payable in respect of particular claims are charged to operating expenses as and when they become due.

1.13 Continuing Healthcare Risk PoolingIn 2014-15 a risk pool scheme was introduced by NHS England for historic continuing healthcare claims, for claim periods prior to 31 March 2013. Under the scheme clinical commissioning group contributed £235k (£200k in 2014-15) to a national pooled fund, which is used to settle the claims.

1.14 ContingenciesA contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the clinical commissioning group, or a present obligation that is not recognised because it is not probable that a payment will be required to settle the obligation or the amount of the obligation cannot be measured sufficiently reliably. A contingent liability is disclosed unless the possibility of a payment is remote.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the clinical commissioning group. A contingent asset

is disclosed where an inflow of economic benefits is probable.Where the time value of money is material, contingencies are disclosed at their present value.

1.15 Financial AssetsFinancial assets are recognised when the clinical commissioning group becomes party to the financial instrument contract or, in the case of trade receivables, when the goods or services have been delivered. Financial assets are derecognised when the contractual rights have expired or the asset has been transferred.

Financial assets are classified into the following categories:

- Financial assets at fair value through profit and loss;

- Held to maturity investments;

- Available for sale financial assets; and,

- Loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

82 83

1.15.1 Loans & ReceivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active market. After initial recognition, they are measured at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method.

Fair value is determined by reference to quoted market prices where possible, otherwise by valuation techniques.

The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, to the initial fair value of the financial asset.

At the end of the reporting period, the clinical commissioning group assesses whether any financial assets, other than those held at ‘fair value through profit and loss’ are impaired. Financial assets are impaired and impairment losses recognised if there is objective evidence of impairment as a result of one or more events which occurred after the initial recognition of the asset and which has an impact on the estimated future cash flows of the asset.

For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the revised future cash flows discounted at the asset’s original effective interest rate. The loss is recognised in expenditure and the carrying amount of the asset is reduced through a provision for impairment of receivables.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised

impairment loss is reversed through expenditure to the extent that the carrying amount of the receivable at the date of the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

1.16 Financial LiabilitiesFinancial liabilities are recognised on the Statement of Financial Position when the clinical commissioning group becomes party to the contractual provisions of the financial instrument or, in the case of trade payables, when the goods or services have been received. Financial liabilities are de-recognised when the liability has been discharged, that is, the liability has been paid or has expired.

Loans from the Department of Health are recognised at historical cost. Otherwise, financial liabilities are initially recognised at fair value.

1.16.1 Financial Guarantee Contract LiabilitiesFinancial guarantee contract liabilities are subsequently measured at the higher of:

- The premium received (or imputed) for entering into the guarantee less cumulative amortisation; and,

- The amount of the obligation under the contract, as determined in accordance with IAS 37: Provisions, Contingent Liabilities and Contingent Assets.

1.16.2 Other Financial LiabilitiesAfter initial recognition, all other financial liabilities are measured at amortised cost using the effective interest method, except for loans from Department of Health, which are carried at historic cost. The effective interest rate is the rate that exactly discounts estimated future cash payments through the life of the asset, to the net carrying amount of the financial liability. Interest is recognised using the effective interest method.

1.17 Value Added TaxMost of the activities of the clinical commissioning group are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT.

1.18 Third Party AssetsAssets belonging to third parties (such as money held on behalf of patients) are not recognised in the accounts since the clinical commissioning group has no beneficial interest in them.

1.19 Losses & Special PaymentsLosses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments. They are divided into different categories, which govern the way that individual cases are handled.

Losses and special payments are charged to the relevant functional headings in expenditure on an accruals basis, including losses which would have been made good through insurance cover had

the clinical commissioning group not been bearing its own risks (with insurance premiums then being included as normal revenue expenditure).

1.20 Accounting Standards That Have Been Issued But Have Not Yet Been AdoptedThe Government Financial Reporting Manual does not require the following Standards and Interpretations to be applied in 2015-16, all of which are subject to consultation:

- IFRS 9: Financial Instruments

- IFRS 14: Regulatory Deferral Accounts

- IFRS 15: Revenue for Contract with Customers

The application of the Standards as revised would not have a material impact on the accounts for 2015-16, were they applied in that year.

84 85

2 Other Operating Revenue

2015-16 Total £000

2015-16 Admin

£000

2015-16 Programme

£000

2014-15 Total £000

Recoveries in respect of employee benefits - - - 10

Patient transport services - - - -

Prescription fees and charges - - - -

Dental fees and charges - - - -

Education, training and research - - - -

Charitable and other contributions to revenue expenditure: NHS

- - - -

Charitable and other contributions to revenue expenditure: non-NHS

- - - -

Receipt of donations for capital acquisitions: NHS Charity

- - - -

Receipt of Government grants for capital acquisi-tions

- - - -

Non-patient care services to other bodies 24 - 24 3

Continuing Health Care risk pool contributions - - - -

Income generation - - - -

Rental revenue from finance leases - - - -

Rental revenue from operating leases - - - -

Other revenue 189 18 171 244

Total other operating revenue 213 18 195 257

Other Revenue includes invoices raised to other organisations, such as West Lancashire GP Practices. The figure also comprises recharges made to Lancashire County Council.

Revenue in this note does not include cash received from NHS England, which is drawn down directly into the bank account of the clinical commissioning group and credited to the General Fund.

3 RevenueRevenue is totally from the supply of services. The clinical commissioning group receives no revenue from the sale of goods for the year ending 31 March 2016 or for the prior year ending 31 March 2015.

86 87

4.1.2 Recoveries in respect of employee benefits 2015-16

2015-16 2014-15

Total

£000

Permanent employees

£000

Other

£000

Total

£000

Permanent employees

£000

Other

£000

Employee Benefits - Revenue

Salaries and wages - - - (8) (8) -

Social security costs - - - (1) (1) -

Employer contributions to the NHS Pension Scheme

- - - (1) (1) -

Total recoveries in respect of employee benefits

- - - (10) (10) -

4.2 Average number of people employed

2015-16 2014-15

Total

Number

Permanently employed

Number

Other

Number

Total

Number

Total 32 31 1 23

Of the above:

Number of whole time equivalent people engaged on capital projects

- - - -

4.3 Staff sickness absence and ill health retirements

2015-16 Number

2014-15 Number

Total Days Lost 24 94

Total Staff Years 28 21

Average working days lost 0.86 4.48

Total Admin Programme

Total

2015-16£000

Permanent Employees

2015-16£000

Other

2015-16£000

Total

2015-16£000

Permanent Employees

2015-16£000

Other

2015-16£000

Total

2015-16£000

Permanent Employees

2015-16£000

Other

2015-16£000

Employee Benefits - - - - - - - - -

Salaries and wages 1,769 1,656 113 1,154 1,053 101 615 603 12

Social security costs 143 143 - 117 117 - 25 25 -

Employer Contributions to NHS Pension scheme

207 207 - 162 162 - 45 45 -

Gross employee benefits expenditure

2,119 2,006 113 1,434 1,333 101 685 673 12

Less recoveries in respect of employee benefits (note 4.1.2)

- - - - - - - - -

Total - Net admin employee benefits including capitalised costs

2,119 2,006 113 1,434 1,333 101 685 673 12

Less: Employee costs capitalised

- - - - - - - - -

Net employee benefits excluding capitalised costs

2,119 2,006 113 1,434 1,333 101 685 673 12

Total Admin Programme

Total

2014-15£000

Permanent Employees

2014-15£000

Other

2014-15£000

Total

2014-15£000

Permanent Employees

2014-15£000

Other

2014-15£000

Total

2014-15£000

Permanent Employees

2014-15£000

Other

2014-15£000

Employee Benefits - - - - - - - - -

Salaries and wages 1,263 1,217 46 1,181 1,149 32 82 68 14

Social security costs 114 114 - 111 111 - 3 3 -

Employer Contributions to NHS Pension scheme

167 167 - 164 164 - 3 3 -

Gross employee benefits expenditure

1,544 1,498 46 1,456 1,424 32 88 74 14

Less recoveries in respect of employee benefits (note 4.1.2)

(10) (10) - (10) (10) - - - -

Total - Net admin employee benefits including capitalised costs

1,534 1,488 46 1,446 1,414 32 88 74 14

Less: Employee costs capitalised

- - - - - - - - -

Net employee benefits excluding capitalised costs

1,534 1,488 46 1,446 1,414 32 88 74 14

4 Employee benefits and staff numbers4.1.1 Employee benefits

The clinical commissioning group has not agreed any early retirements due to ill health grounds as at 31 March 2016 or the prior year ending 31 March 2015.

4.4 Exit packages agreed in the financial yearThe clinical commissioning group had not agreed any exit packages as at 31 March 2016 or for the prior year ending 31 March 2015.

88 89

4.5 Pension costsPast and present employees are covered by the provisions of the NHS Pension Scheme. Details of the benefits payable under these provisions can be found on the NHS Pensions website at www.nhsbsa.nhs.uk/Pensions.

The Scheme is an unfunded, defined benefit scheme that covers NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The Scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities.

Therefore, the Scheme is accounted for as if it were a defined contribution scheme: the cost to the clinical commissioning group of participating in the Scheme is taken as equal to the contributions payable to the Scheme for the accounting period.

The Scheme is subject to a full actuarial valuation every four years (until 2004, every five years) and an accounting valuation every year. An outline of these follows:

4.5.1 Full actuarial (funding) valuationThe purpose of this valuation is to assess the level of liability in respect of the benefits due under the Scheme (taking into account its recent demographic experience), and to recommend the contribution rates to be paid by employers and scheme members. The last such valuation, which determined current contribution rates was undertaken as at 31 March 2012 and covered the period from 1 April 2008 to that date. Details can be found on the pension scheme website at www.nhsbsa.nhs.uk/pensions.

For 2015-16, employers’ contributions of £207,380 were payable to the NHS Pensions Scheme (2014-15: £167,500) were payable to the NHS Pension Scheme at the rate of 14.3% of pensionable pay. The scheme’s actuary reviews employer contributions, usually every four years and now based on HMT Valuation Directions, following a full scheme valuation. The latest review used data from 31 March 2012 and was published on the Government website on 1 June 2014. These costs are included in the NHS pension line of note 4.1.

90 91

5 Operating expenses

2015-16 Total £000

2015-16Admin

£000

2015-16Programme

£000

2014-15Total£000

Gross Employee Benefits

Employee benefits excluding governing body members 1,371 781 590 822

Executive governing body members 748 653 95 722

Total gross employee benefits 2,119 1,434 685 1,544

Other costs

Services from other CCGs and NHS England 1,507 631 876 1,848

Services from foundation trusts 33,699 4 33,695 30,849

Services from other NHS trusts 63,146 46 63,100 65,715

Services from other NHS bodies - - - -

Purchase of healthcare from non-NHS bodies 22,431 - 22,431 17,802

Chair and Non Executive Members 16 16 - 16

Supplies and services – clinical 848 - 848 848

Supplies and services – general 417 35 382 291

Consultancy services 254 120 134 324

Establishment 366 65 301 463

Transport 585 29 556 569

Premises 970 16 954 1,099

Audit fees 54 54 - 72

Prescribing costs 18,961 - 18,961 18,138

Pharmaceutical services - - - -

General ophthalmic services 0 - 0 1

GPMS/APMS and PCTMS 894 - 894 806

Other professional fees excl. audit 77 - 77 1

Grants to other public bodies - - - -

Clinical negligence - - - -

Research and development (excluding staff costs) - - - -

Education and training 62 19 43 22

Provisions (42) - (42) -

Funding to group bodies - - -

CHC Risk Pool contributions 235 - 235 200

Total other costs 144,479 1,034 143,445 139,064

Total operating expenses 146,598 2,468 144,130 140,608

Admin expenditure is expenditure incurred that is not a direct payment for the provision of healthcare or healthcare services.

6 Better payment practice code

6.1 Better payment practice code

Measure of compliance 2015-16 Number

2015-16 £000

2014-15 Number

2014-15 £000

Non-NHS Payables

Total Non-NHS Trade invoices paid in the Year 6,407 31,192 5,645 21,774

Total Non-NHS Trade Invoices paid within target 6,301 30,619 5,570 21,253

Percentage of Non-NHS Trade invoices paid within target

98.35% 98.16% 98.67% 97.61%

NHS Payables

Total NHS Trade invoices paid in the Year 1,832 100,552 1,824 100,630

Total NHS Trade Invoices paid within target 1,804 100,411 1,763 100,198

Percentage of NHS Trade invoices paid within target

98.47% 99.86% 96.66% 99.57%

The Better Payment Practice Code requires the CCG to aim to pay all valid invoices by the due date or within 30 days of receipt of a valid invoice, whichever is later.

6.2 The Late Payment of Commercial Debts (Interest) Act 1998The clinical commisioning group has not made any such payments in the year ending 31 March 2016 or for the prior year ending 31 March 2015.

7 Income Generation ActivitiesThe clinical commissioning group does not undertake any income generation activities in the year ending 31 March 2016 or for the prior year ending 31 March 2015.

92 93

8 Operating leases

8.1 As lesseeThe clinical commissioning group occupies property owned and managed by NHS Property Services Ltd. Included within these charges are amounts relating to subsidies and void spaces whereby the income generated by NHS Property Services Ltd from tenants is insufficient to cover costs and the clinical commissioning group covers the shortfall.

8.1.1 Payments recognised as an expense

2015-16 2014-15

Measure of compliance Land £000

Buildings £000

Other £000

Total£000

Land £000

Buildings £000

Other £000

Total£000

Payments recognised as an expense

Minimum lease payments - 945 1 946 - 1,085 6 1,091

Contingent rents - - - - - - - -

Sub-lease payments - - - - - - - -

Total - 945 1 946 - 1,085 6 1,091

Whilst our arrangements with NHS Property Services Limited fall within the definition of operating leases, rental charge for future years has not yet been agreed. Consequently this note does not include future minimum lease payments for these arrangements.

9 Trade and other receivables

Current2015-16

£000

Non-current2015-16

£000

Current2014-15

£000

Non-current2014-15

£000

NHS receivables: Revenue 37 - 370 -

NHS prepayments - - 789 -

NHS accrued income 1,310 - - -

Non-NHS receivables: Revenue 119 - 386 -

Non-NHS prepayments - - 138 -

Non-NHS accrued income 63 - - -

VAT 10 - 17 -

Total Trade & other receivables 1,539 - 1,700 -

Total current and non-current 1,539 - 1,700 -

The great majority of trade is with NHS England. As NHS England is funded by Government to provide funding to clinical commissioning groups to commission services, no credit scoring of them is considered necessary.

94 95

9.1 Receivables past their due date but not impaired

2015-16 £000

2014-15 £000

By up to three months - 18

By three to six months - 3

By more than six months - -

Total - 21

The clinical commissioning group did not hold any collateral against receivables outstanding at 31 March 2016.

9.2 Provision for impairment of receivables

The clinical commissioning group had no provision for impairment of receivables in the year ending 31 March 2016 or for the prior year ending 31 March 2015. The clinical commissioning group’s aged debt report is reviewed in order to determine the recovery status of the debtor balances. Each item is considered on a case by case basis.

10 Cash and cash equivalents

2015-16 £000

2014-15 £000

Balance at 1 April 2015 2 176

Net change in year 37 (174)

Balance at 31 March 2016 39 2

Made up of:

Cash with the Government Banking Service 39 2

Cash with Commercial banks - -

Cash in hand - -

Current investments - -

Cash and cash equivalents as in Statement of Financial Position 39 2

Bank overdraft: Government Banking Service - -

Bank overdraft: Commercial banks - -

Total bank overdrafts - -

Balance at 31 March 2016 39 2

11 Trade and other payables

Current2015-16

£000

Non-current2015-16

£000

Current2014-15

£000

Non-current2014-15

£000

Interest payable - - - -

NHS payables: revenue 1,226 - 1,007 -

NHS accruals 1,136 - 969 -

NHS deferred income - - - -

Non-NHS payables: revenue 533 - 900 -

Non-NHS accruals 3,819 - 3,941 -

Non-NHS deferred income - - - -

Social security costs 21 - 17 -

VAT - - - -

Tax 23 - 16 -

Other payables 47 - 29 -

Total Trade & Other Payables 6,805 - 6,879 -

Total current and non-current 6,805 6,879

96 97

12 Provisions

Current2015-16

£000

Non-current2015-16

£000

Current2014-15

£000

Non-current2014-15

£000

Pensions relating to former directors - - - -

Pensions relating to other staff - - - -

Restructuring - - - -

Redundancy - - - -

Agenda for change - - - -

Equal pay - - - -

Legal claims - - - -

Continuing care - 43 - 85

Other - - - -

Total - 43 - 85

Total current and non-current 43 85

Pensions Relating

to Former Directors

£000

Pensions Relating to Other Staff

£000

Restructuring

£000

Redundancy

£000

Agenda for change

£000

Equal pay

£000

Legal claims

£000

Continuing care

£000

Other

£000

Total

£000

Balance at 1 April 2015

- - - - - - - 85 - 85

Arising during the year

- - - - - - - - -

Utilised during the year

- - - - - - - - - -

Reversed unused

- - - - - - - (42) - (42)

Unwinding of discount

- - - - - - - - - -

Change in discount rate

- - - - - - - - - -

Transfer (to) from other public sector body

- - - - - - - - - -

Balance at 31 March 2016

- - - - - - - 43 - 43

Expected timing of cash flows:

Within 1 year - - - - - - - - - -

Between 1 and 5 years

- - - - - - - 43 - 43

After 5 years - - - - - - - - - -

Balance at 31 March 2016

- - - - - - - 43 - 43

Balance as at 31 March 2015 Per Accounts

- - - - - - - 85 - 85

Balance at 31 March 2016

- - - - - - - (0) - (0)

The clinical commissioning group made a provision for Continuing Care claims relating to 2013/14 that may arise in future years. It was calculated by reference to an estimated number of claims based on historical data, their probability of success and a typical weekly Nursing Home cost. Only one such claim (for £8k) has been settled by the clinical commissioning group in the intervening period. Given this the clinical commissioning group has reassessed the necessity of the provision and has decided to reduce it in value by 50%. Under the Accounts Direction issued by NHS England on 12 February 2014. NHS England is responsible for accounting for liabilities relating to NHS Continuing Healthcare claims relating to periods of care before establishment of the clinical commissioning group. However, the legal liability remains with the CCG. The total value of legacy NHS Continuing Healthcare provisions accounted for by NHS England on behalf of this clinical commissioning group at 31 March 2016 is £1.699m. (31 March 2015 £2.034)

98 99

13 ContingenciesThe clinical commissioning group had no contingent assets or liabilities as at 31 March 2016 or for the prior year ending 31st March 2015. 14 Financial instruments

14.1 Financial risk managementFinancial reporting standard IFRS 7 requires disclosure of the role that financial instruments have had during the period in creating or changing the risks a body faces in undertaking its activities. Because the clinical commissioning group is financed through parliamentary funding, it is not exposed to the degree of financial risk faced by business entities. Also, financial instruments play a much more limited role in creating or changing risk than would be typical of listed companies, to which the financial reporting standards mainly apply. The clinical commissioning group has limited powers to borrow or invest surplus funds and financial assets and liabilities are generated by day-to-day operational activities rather than being held to change the risks facing the clinical commissioning group in undertaking its activities. Treasury management operations are carried out by the finance department, within parameters defined formally within the clinical commissioning group standing financial instructions and policies agreed by the Governing Body. Treasury activity is subject to review by the clinical commissioning group and internal auditors.

14.1.1 Currency riskThe clinical commissioning group is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and sterling based. The clinical commissioning group has no overseas operations. The clinical commissioning group therefore has low exposure to currency rate fluctuations. 14.1.2 Interest rate riskThe clinical commissioning group borrows from government for capital expenditure, subject to affordability as confirmed by NHS England. The borrowings are for 1 to 25 years, in line with the life of the associated assets, and interest is charged at the National Loans Fund rate, fixed for the life of the loan. The clinical commissioning group therefore has low exposure to interest rate fluctuations. 14.1.3 Credit riskBecause the majority of the clinical commissioning groups revenue comes from parliamentary funding, the clinical commissioning group has low exposure to credit risk. The maximum exposures as at the end of the financial year are in receivables from customers, as disclosed in the trade and other receivables note. 14.1.3 Liquidity riskThe clinical commissioning group is required to operate within revenue and capital resource limits, which are financed from resources voted annually by Parliament. The clinical commissioning group draws down cash to cover expenditure, as the need arises. The clinical commissioning group is not, therefore, exposed to significant liquidity risks.

14.2 Financial assets

At ‘fair value through profit

and loss’2015-16

£000

Loans andReceivables

2015-16 £000

Available for sale

2015-16 £000

Total

2015-16 £000

Embedded derivatives - - - -

Receivables:

- NHS - 1,347 - 1,347

- Non-NHS - 181 - 181

Cash at bank and in hand - 39 - 39

Other financial assets - 1 - 1

Total at 31 March 2016 - 1,568 - 1,568

At ‘fair value through profit

and loss’2014-15

£000

Loans andReceivables

2014-15 £000

Available for sale

2014-15 £000

Total

2014-15 £000

Embedded derivatives - - - -

Receivables:

- NHS - 370 - 370

- Non-NHS - 386 - 386

Cash at bank and in hand - 2 - 2

Other financial assets - - - -

Total at 31 March 2015 - 758 - 758

100 101

14.3 Financial liabilities

At ‘fair value through profit

and loss’2015-16

£000

Other

2015-16 £000

Total

2015-16 £000

Embedded derivatives - - -

Payables:

- NHS - 2,362 2,362

- Non-NHS - 4,398 4,398

Private finance initiative, LIFT and finance lease obligations

- - -

Other borrowings - -

Other financial liabilities - - -

Total at 31 March 2016 - 6,760 6,760

At ‘fair value through profit

and loss’2014-15

£000

Other

2014-15 £000

Total

2014-15 £000

Embedded derivatives - - -

Payables:

- NHS - 1,976 1,976

- Non-NHS - 4,870 4,870

Private finance initiative, LIFT and finance lease obligations

- - -

Other borrowings - - -

Other financial liabilities - - -

Total at 31 March 2015 - 6,847 6,847

15 Operating segmentsThe clinical commissioning group consider they have only one segment: commissioning of healthcare services.

16 Pooled budgets The clinical commissioning group shares of the income and expenditure handled by the pooled budget in the financial year were:

2015-16 £000

2014-15 £000

Income 367 366

Expenditure (3,677) (1,148)

The clinical commissioning group has entered into two pooled budget arrangements for Services for Adults with Learning Difficulties and Better Care Fund.

16.2 Better Care Fund The clinical commissioning group has a pooled budget arrangement with Lancashire County Council, NHS North Lancashire CCG, NHS Fylde and Wyre CCG, NHS East Lancashire CCG, NHS Chorley, South Ribble CCG and NHS Greater Preston CCG. The pool is hosted by Lancashire County Council. Under the arrangement funds are pooled under Section 75 of the NHS Act 2006 for Better Care Fund. Memorandum Trading Account for the period 31 March 2016

2015-16 £000

2014-15 £000

Pooled Fund Income 89,219 -

Pooled Fund Expenditure (89,219) -

Contribution from NHS West Lancashire 7,420 -

16.1 Services for Adults with Learning DifficultiesThe clinical commissioning group has a pooled budget arrangement with Lancashire County Council. The pool is hosted by Lancashire County Council. Under the arrangement funds are pooled under Section 75 of the NHS Act 2006 for Services for Adults with Learning Disabilities. Memorandum Trading Account for the period 31 March 2016

2015-16 £000

2014-15 £000

Pooled Fund Income 52,298 52,354

Pooled Fund Expenditure (59,281) (56,716)

Contribution from NHS West Lancashire 1,234 1,148

102 103

17 Related party transactions

Payments to Related Party

2015-16 £000

Receipts from Related Party

2015-16 £000

Amounts owed to

Related Party2015-16

£000

Amounts due from Related

Party2015-16

£000

Parbold Surgery (Chair - Dr J Caine, GP Exec Lead - Dr J Kinsey)

111 - - -

Beacon Primary Care (GP Exec Lead - Dr B Biswas, GP Exec Lead - Dr R Bonsor)

87 - 4 -

Ormskirk Medical Practice (GP Exec Lead - Dr P Gregory)

83 - - -

Parkgate Surgery (GP Exec Lead - Dr P Gregory)

101 - - -

OWLS CIC Ltd (GP Exec Lead - Dr P Gregory)

1,746 - 4 -

The transactions above to Practices are in relation to Enhanced Services and Tier 2 services (such as Anti-Coagulation, Minor Surgery and Phlebotomy) provided by the above mentioned GP Practices. OWLS CIC Ltd provide urgent care services to the West Lancashire population including out of hours provision and an acute visiting service.

Payments to Related Party

2014-15 £000

Receipts from Related Party

2014-15 £000

Amounts owed to Related Party

2014-15 £000

Amounts due from Related

Party2014-15

£000

Parbold Surgery (Chair - Dr J Caine, GP Exec Lead - Dr J Kinsey)

131 - - -

Beacon Primary Care (GP Exec Lead - Dr B Biswas, GP Exec Lead - Dr R Bonsor)

76 - 8 -

Ormskirk Medical Practice (GP Exec Lead - Dr P Gregory)

81 - - -

Parkgate Surgery (GP Exec lead - Dr P Gregory)

98 - - -

OWLS CIC Ltd (GP Exec Lead - Dr P Gregory)

1,234 - 2 -

The Department of Health is regarded as a related party. During the year the clinical commissioning group has had a significant number of material related transactions with entities for which the Department is regarded as the parent Department. For example: • NHS England; • NHS Foundation Trusts; • NHS Trusts; • NHS Litigation Authority; and • NHS Business Services Authority;

Details of related party transactions with the Department of Health above £5m:

Payments toRelated Party

2015-16 £000

Receipts from Related Party

2015-16 £000

Amounts owed to

Related Party2015-16

£000

Amountsdue from

Related Party 2015-16

£000

Southport and Ormskirk NHS Trust Hospital

61,252 - 18 -

Lancashire Care NHS Foundation Trust

11,534 - 415 -

Wrightington, Wigan & Leigh NHS Foundation Trust

7,988 - - -

Salford Royal NHS Foundation Trust 284 - 41 -

In addition, the clinical commissioning group has had a number of material transactions with other government departments and other central and local government bodies. Most of these transactions have been with Lancashire County Council in respect of joint enterprises. Notes 16 provide additional detail.

Payments toRelated Party

2014-15 £000

Receipts from Related Party

2014-15 £000

Amounts owed to Related Party

2014-15 £000

Amountsdue from

Related Party 2014-15

£000

Southport and Ormskirk NHS Trust Hospital

57,924 - 171 -

Lancashire Care NHS Foundation Trust

11,466 - 521 -

Wrightington, Wigan & Leigh NHS Foundation Trust

6,756 - 562 -

104 105

18 Events after the end of the reporting periodThere are no post balance sheet events which will have a material effect on the financial statements of the clinical commissioning group.

19 Third party assets The clinical commissioning group held no third party assets as at 31 March 2016 or for the prior year ending 31 March 2015.

20 Financial performance targetsNHS Clinical Commissioning Group have a number of financial duties under the NHS Act 2006 (as amended). NHS Clinical Commissioning Group performance against those duties was as follows:

2015-16Duty

Achieved

2015-16 Target

£000

2015-16 Performance

£000

2014-15 Target£000

2014-15Performance

£000

Expenditure not to exceed income Y 148,062 146,598 142,050 140,609

Capital resource use does not exceed the amount specified in Directions

- - - -

Revenue resource use does not exceed the amount specified in Directions

Y 147,849 146,385 141,793 140,352

Capital resource use on specified matter(s) does not exceed the amount specified in Directions

- - - -

Revenue resource use on specified matter(s) does not exceed the amount specified in Directions

- - - -

Revenue administration resource use does not exceed the amount specified in Directions

Y 2,478 2,450 3,011 2,589

21 Impact of IFRS Accounting for IFRS had no impact on the results of the clinical commissioning group during the 2015-16 financial year or the prior financial year 2014-15.

106 107

Further reading

Equality and DiversityOur Equality and Inclusion Annual Report 2015/16 demonstrates how we have reduced inequalities in access to services provided and outcomes from service provided see link below:

Link www.westlancashireccg.nhs.uk/wp-contentuploads/WLCCG-EI-Annual-Report-20151.pdf

Clinical Strategy Building for the FutureLink www.westlancashireccg.nhs.uk/wp-contentuploads/Building-for-the-Future-Sept-2015.pdf

Policies and ProceduresThere have not been any new staff policies during 2015/16, current policies can be seen on the CCG website see link below: Link www.westlancashireccg.nhs.uk/resources/policies-and-procedures

Community Health Services ProcurementLink www.westlancashireccg.nhs.uk/have-your-say/community-health-services

Strategic Transformation PlanLink www.westlancashireccg.nhs.uk under the ‘recources’ tab

Register of InterestThe Register of Interest is posted on the CCG website see link below: Link www.westlancashireccg.nhs.uk/about-us/governing-body

@WestLancsCCG

01695 588000

info@westlancashireccg.nhs.uk