NHS Hertfordshire Annual Report 2010/11 by NHS Herts Valleys CCG

Annual Report and Accounts

2010/11

Published September 2011

Welcome Welcome to the first annual report from NHS Hertfordshire - the single primary care trust for the county following the merger last year of NHS East and North Hertfordshire and NHS West Hertfordshire. As always we can only provide a snapshot of our activity in this introduction so do read on to learn more about our activities, achievements and issues that have contributed to our performance over the year. We would like to start by extending our sincere thanks to all our staff for their continuing commitment and hard work during the year. They have more than exceeded our expectations of them following the launch of our new set of values last year. This is especially impressive considering the unprecedented changes that were announced during the year and the uncertainty they face, together with the adaptations they have had to make in response to the changing face of the NHS something that we will cover in more detail later on. The work that our staff carry out means that we have continued to improve services in the county leading to better health for the residents of Hertfordshire. The number of people who smoke continues to fall and access to high quality stroke care in our hospitals improved although we recognise that we still have more work to do to on rehabilitation services for people following a stroke. Whilst greater numbers of children completed their recommended immunisations, fewer people at risk of flu complications took up the offer of their free flu vaccination so we are already looking at what we can do to increase this number during the autumn. The number of people who contracted infections related to health care environments continues to fall. We were pleased that as a result of patient feedback through our Patient Advice and Liaison Service and Complaints teams we have been able to work closely with GP surgeries to improve communication, particularly in relation to telephone systems and complaint handling. Other changes made following patient feedback include additional GPs being employed and changes to appointment and referral systems. During the year we conducted a number of public health campaigns designed to improve the health of people living in Hertfordshire. They included campaigns to raise awareness of the signs and symptoms of bowel and lung cancer; to further promote the services available from community pharmacists; to increase the number of people we help to quit smoking and to reduce the prevalence of Chlamydia in young people. More information on some of these can be found later on in this report and you can read about them all by visiting our website www.hertfordshire.nhs.uk and signing up for our e-bulletin. Maintaining good relationships with patients and stakeholders is very important to us. Our stakeholder forum comprising representatives from local authorities and the voluntary sector has gone from strength to strength. It continues to advise us on the implementation of health service changes and developments from a stakeholder perspective and its input to consultations has proved invaluable. New this year has been a series of community lunches held in different locations around the county as part of our bi-monthly Board meetings. The lunches are an opportunity for 1

representatives from local organisations to meet with the Board to talk about local and national health issues in an informal setting. We also continued our series of "roadshows" held at supermarkets and hospitals where we have conversations with people about local health services and how to get the best from them by using them appropriately. Strategic developments in the east and north of the county are progressing well. Plans for the new QEII hospital moved a step forward with Board approval for the stage one business case and submission of a planning application following a period of public consultation on site plans. We expect building work to start in 2012 with a projected completion date of spring 2014. The surgicentre on the Lister Hospital site is being established to handle the vast majority of elective (non-urgent) surgery. On the west side of the county, work is underway with West Hertfordshire Hospitals NHS Trust to confirm service requirements and start site planning for the local general hospital in Hemel Hempstead. The whole county benefited from rapid access psychological therapy service, primarily provided by Hertfordshire Partnership NHS Foundation Trust (HPFT). This service enables local residents to access psychological treatments and benefit from improved mental well being. The initial implementation of Early Memory Diagnosis and Support Services has been rolled out in Hertfordshire and we expect the entire county to be able to access these services by September 2011 in line with the National Dementia Strategy. Looking forward, we are very pleased about the transformation of mental health and learning disability services that HPFT are leading on with our joint commissioners; this programme will ensure we continue to have high quality responsive mental health and learning disability care that can meet the needs of the current population and respond to the demographic changes of the future. In November 2010, our provider arm became an NHS trust in their own right Hertfordshire Community NHS Trust. They are seeking to become a community foundation trust and we wish them every success with that and look forward to continuing to work together with them and with all our provider trusts to commission and deliver high quality health services for Hertfordshire residents. These developments will all contribute to improved health and care for people in Hertfordshire. Spending our budget wisely continues to be a priority for NHS Hertfordshire, especially now given the current economic climate and we are focussed on establishing robust contracts with providers and financial management of the health care system in Hertfordshire. As a result we can report that we ended 2010-11 in financial balance. The increase in activity we have experienced in our hospitals has slowed down, partly due to the efforts of GPs to ensure all referrals are clinically appropriate. But we are still seeing a significant overspend on acute hospital activity and we are continuing to work with provider trusts and GP colleagues to manage this.

We are developing and planning this work – Quality, Innovation, Productivity and Prevention (QIPP) – with our partners across the health system to agree how we are all going to deliver our strategy to increase efficiency and improve quality. The underlying theme of this work is delivering more care outside of hospital in people’s homes and in places closer to where they live. Using our successful "Let's use it right" campaign, we will continue to promote our local health services to help people across the county to understand which is the best service for their needs. The merger of NHS West Hertfordshire and NHS East and North Hertfordshire to form a single primary care trust for the county (one of the largest in the country) NHS Hertfordshire - has contributed to our management savings and has formalised arrangements that have been in place since 2006 where most staff have worked in roles that cover the whole county. A single primary care trust for the county means that we have reduced the amount we spend on running the organisation, freeing up more money that can be spent on patient care. Other developments this year include a review of intermediate care in the county. Intermediate care is a range of integrated health and/or social care services that aim to promote faster recovery from illness, prevent unnecessary admission to hospital or to long term residential care and to maximise chances of continued independent living. Our vision and strategy to improve and deliver these services more appropriately to elderly residents in Hertfordshire has been consulted on and a number of well-attended events took place as part of our engagement with our stakeholders. In the coming year we begin work to implement this strategy which is in line with our approach to provide good quality affordable care close to home. Following the review of the pilot urgent care centres in Cheshunt and Hertford we will test out with providers the feasibility of a new minor injuries unit in Cheshunt to replace the existing pilot urgent care centre and to close the centre at Hertford. We will work closely with GP colleagues to make sure that we hold meaningful conversations with local people so that we understand their needs and that they have a good understanding of the services a minor injuries unit in Cheshunt could provide. We know that in general, patients in Hertford have good access to GP services and satisfaction with care is high. Hertford patients who phone the out of hours GP service will still be able to see a GP in the evenings and at weekends at Hertford County Hospital. The local A&E service to be provided at the new QEII Hospital from 2014 will also retain a local service for residents with serious but not life threatening conditions. NHS reforms published in July 2010 announced the abolition of primary care trusts and strategic health authorities and introduced the concept of GP commissioning consortia (GPCC) and subsequently Clinical Commissioning Groups (CCGs). Since then we have been working closely with GP colleagues and excellent progress has been made in developing the CCGs in Hertfordshire. All three of our CCGs – Herts Valleys (covering most practices in west Hertfordshire), East and North Hertfordshire and The Red House Group (practices in Radlett, Park Street and Shenley) – have

now achieved pathfinder status. This means they are testing out which model of commissioning best meets the needs of their patients before responsibilities are formally handed over to them from PCTs in 2013. As part of our work during this transitional period we are supporting the CCGs in a number of ways, for example by running monthly workshops for GP leads covering a variety of topics such as overseeing finances and the new efficiency agenda and managing contracts with providers. The process of supporting the CCGs with day to day activity has stepped up recently with the aligning of teams of PCT staff to work alongside the CCGs as they develop their roles as commissioning bodies. Other aspects of the transition brought about by the Governmentâ&#x20AC;&#x2122;s Health and Social Care Bill are also moving forward. Hertfordshire has been identified as an early implementer of a health and wellbeing board and Hertfordshire County Council has set up a small core shadow board that held its first meeting earlier this year. Whilst we are engaged in a considerable amount of activity to prepare for the new arrangements, the PCT is also focused firmly on delivering our day to day responsibilities. We will continue to keep you involved in our activities and up to date on progress with NHS reforms via our website, in the local media, at our Board meetings and at community events. On a final note we would like to thank our former Chief Executive, Anne Walker, who left NHS Hertfordshire at the end of August 2010 to take up a new post as Chief Executive at NHS Surrey.

Dr Jane Halpin Chief Executive

Stuart Bloom Chair

Dr Mike Edwards Chair, Clinical Executive Committee

About us OUR HISTORY AND BACKGROUND NHS Hertfordshire (the PCT) came into being on 1 April 2010 following the merger of NHS East and North Hertfordshire and NHS West Hertfordshire. The predecessor organisations were established in 2006 although primary care trusts have existed since 2000. OUR ROLE AS LOCAL LEADERS OF THE NHS We hold the vast majority of the NHS budget locally and are the lead health commissioning organisation in the county. Commissioning means that we assess the health needs of our population then use our resources to buy services from hospitals and other providers such as mental health trusts, GPs and dentists to meet those needs. By doing this we can have a positive impact on the health and wellbeing of the local population. We also fund the cost of medicines and treatments prescribed by GPs and nurse prescribers. We commission services in a number of different ways:    

Directly with providers such as hospitals Practice based commissioning (PBC) – where GPs, nurses and therapists can design services that meet the needs of their patients in a particular area Primary care commissioning – this involves services provided by GPs, community pharmacists, dentists and optometrists Sharing the commissioning of services - this means that we join together with Hertfordshire County Council and we both contribute some of our budgets to a partnership who then arrange mental health and learning disability services in the county. We use the majority of this money to commission services from Hertfordshire Partnership NHS Foundation Trust and from Adult Care Services.

PROVIDING CARE On 1 November 2010 our frontline clinical staff together with their support teams became a NHS trust in their own right – Hertfordshire Community NHS Trust. HOW WE ARE MANAGED We are managed by a Board of non executive and executive directors. The executive directors are employed by the PCT and the non executive directors are independent people who work on a part time basis, to make sure that we act in the best interests of the public. The Board is responsible for ensuring we meet our performance targets and also oversees the work of the Clinical Executive Committee (CEC). The CEC is made up of GPs and other clinical staff who advise us on clinical matters.

Non executive directors:  Stuart Bloom, Chair  Mary Compton  Linda Farrant  Tracy Graily  Mark Gainsborough  Eliza Hermann  Paul Smith  Kate Watts Dr Tony Kostick and Dr Mike Edwards, Joint Chairs, Clinical Executive Committee Executive directors:  Anne Walker, Chief Executive (to September 2010)  Gloria Barber, Director of Workforce and Communications (to October 2010)  Alan Farmer, Director of Workforce Transformation (from January 2011)  Beverley Flowers, Director of System Management  Dr Jane Halpin, Director of Public Health/Deputy Chief Executive, then Interim Chief Executive (from September 2010)  Andrew Parker, Director of Primary Care Development  Alan Pond, Director of Finance and Commercial Development  Simon Rouse, Director of Strategic Planning (to August 2010)  Lesley Watts, Director of Innovation LOCATION AND TYPE OF FACILITIES PROVIDED Our head office is in Welwyn Garden City and during 2010-11 we also had office bases in Watford and Letchworth. The Watford office closed in November 2010 and the offices in Letchworth closed in March 2011. The vast majority of staff from these offices relocated to Welwyn Garden City although we still have a small number of staff based in other parts of the county.

Key issues for NHS Hertfordshire during the year Next steps in new QEII hospital redevelopment Plans to develop the new QEII Hospital in Welwyn Garden City took another step forward with the approval of the outline business case by NHS Hertfordshire and NHS East of England (the strategic health authority) at the end of March 2011. The PCT, in partnership with local GPs, can now continue our detailed planning work on the new hospital development, which is scheduled to open in spring 2014. Plans for the new hospital include a local A&E facility – available 24 hours a day, every day of the year – to look after the vast majority of people who currently use the A&E service at the QEII. Other services will include:  General outpatients  GP services, including in the evenings and at weekends  Diagnostics – such as x-rays and ultrasound  Rapid Assessment Unit – to support elderly people so that they don’t need to be admitted into hospital  Endoscopy and day treatments  Ante and post natal services  A dedicated Children’s Centre  Therapy services  The Vicki Adkins Breast Unit The overall site may also include some beds for older people who need extra support to help them when they leave a major hospital. NHS Hertfordshire held a number of public events at the end of 2010 to give local people an opportunity to look at the initial plans, to ask questions and to meet with some of the people involved in the project. This helped us to put together our outline planning application which was submitted to Welwyn Hatfield Borough Council in February 2011. The application was considered by the Council's Planning Control Committee on 11 August where the decision was deferred to allow NHS Hertfordshire to clarify how additional car parking spaces could be provided in the future. The Committee asked that a legal agreement be put in place to allow more spaces to be added later if needed. Plans for the hospital will be reconsidered by the Committee within 3 months. Urgent Care During 2010-11, the testing out of two new urgent care centres came to a close. Urgent care centres in Hertford and Cheshunt were trialled for a period of 12 months from 2009, with the aim of relieving the pressure on A&E departments and giving people better access to care and treatment for certain urgent conditions. As agreed when they were established, a formal evaluation of these pilot services was undertaken at the end of 2010. The independent evaluation report was presented to a specially convened panel that included representatives from local authorities. The

evaluation panel concluded that the evidence was that the centres were not achieving what they set out to deliver. For this reason a recommendation that the centres should not be recommissioned was presented to and accepted by the Board of NHS Hertfordshire. This means that both centres will close in October 2011. The Board agreed that a minor injuries unit should replace the urgent care centre in Cheshunt, where there was a need to provide this type of service – dealing with minor injuries that need treating urgently, but that are not life-threatening. The Board were also concerned that local people in Cheshunt were sometimes experiencing difficulties accessing services from their family doctors. So, a programme of work has been undertaken to improve this and the new ‘shadow’ East and North Hertfordshire Clinical Commissioning Group (CCG) is taking this forward with the PCT. The CCG and PCT held events so that key stakeholders could get involved in agreeing measures to improve access to GPs in the area. The Board also agreed that a minor injuries unit should be established to take over from the urgent care centre in Cheshunt. This is likely to be in place in October 2011. NHS reforms In addition to the work we have done this year to commission health services for people in Hertfordshire and improve health, here at the PCT we have also handled the impact of the announcement of a major reform programme of the health service across England which, among other things, plans the abolition of the PCT in 2013. We started to make plans for the transition to a new set of arrangements very early on, to give the health system in Hertfordshire the best chance of success and so that we could all be absolutely ready for the formal and legal implementation of the changes. So, we worked with groups of GPs who were interested in setting up new GP commissioning consortia – that have subsequently become clinical commissioning groups (CCGs) - and were pleased when all three of the Hertfordshire consortia became ‘pathfinders’ – part of the Department of Health’s programme to identify those groups of GPs who could progress their development to consortia status. Virtually all of our population is now covered by one of the CCGs in Hertfordshire: East and North Hertfordshire CCG; Herts Valleys CCG; and the Red House Group. During recent months, PCT staff and leaders have worked closely with the CCGs and supported them in a number of ways: by key assigning staff to work with them; running workshops to outline and explain new responsibilities; supporting and advising on elections to boards; and ensuring the emerging CCGs are involved in key strategic commissioning decisions affecting Hertfordshire. The Government’s plans also include the transfer of our public health role which conducts research into health needs and helps prevent people from becoming ill through vaccination programmes and promoting healthy living. The Government is planning for this public health work to become the responsibility of local authorities and public health activities will be overseen by a new body called Public Health England. Local authorities will have a bigger role in organising health care and this will happen through the new Health and Wellbeing Boards. The PCT has been working closely with colleagues at Hertfordshire County Council to set up a health

and wellbeing board for Hertfordshire and the ‘shadow’ board held its first meeting in June 2011. ‘Shadow’ means that the board is starting to play a role but does not yet function fully or have powers, because the legislation has not been passed to transfer responsibilities. The government’s ‘pause’ in taking the health and social care bill through parliament – to allow further reflection of its proposals for reform – was announced in early April 2011. The biggest outcomes of this pause led to the announcement that GP consortia would expand the membership of their board to include other clinicians (including a secondary care specialist and a registered nurse) and at least two independent members. They will now be called clinical commissioning groups (CCGs). NHS Hertfordshire has continued its programme of work to ensure a smooth transition to new arrangements, whilst at the same time making sure we and the new CCGs can be flexible and allow for any adjustments that we may need to make to comply with amendments to Government plans.

Working with our partners Key to developing appropriate health and social care services are partnerships with the public, carers, other health service organisations (for example hospital, mental health and community trusts), county council, district councils, voluntary organisations, housing providers, colleges and employment services. It is now more important than ever that we continue to strengthen these partnerships so that we can commission joined up services for residents ensuring that we get good value for money and avoid duplication. It is also important that we continue to work closely with service users and their carers to ensure that they have an influence on the services we commission on their behalf. Some of our partnership activities during 2010/11 were: Improving healthcare for people with learning disabilities We continued with our work to improve healthcare for people with learning disabilities and their families by making services more accessible, inclusive and safe. As part of this programme we worked with Hertfordshire County Council, Hertfordshire Community Trust and service users to ensure adults with a learning disability access national screening programmes, specifically diabetic retinal screening. The group designed an easy-read information leaflet which breaks down the process of a retinal screen in a step-by-step picture format supported by simple text. The leaflet will be used to help adults with a learning disability to understand the process and encourage them to attend for screening. This work was one of a number of activities in place designed to make sure that services are accessible to all users, and we plan to use this leaflet as a template that other services can utilise to help their services become more accessible too. Intermediate care review Working with Hertfordshire County Council and Hertfordshire Community Trust, we began a review of how intermediate care is delivered in Hertfordshire. Intermediate care is a range of integrated health and/or social care services that aim to promote faster recovery from illness, prevent unnecessary admission to hospital or to long term residential care and to maximise chances of continued independent living. We held a number of 'conversation cafes' that were very well attended by patients, carers, clinicians, and representatives from the voluntary sector and local authorities. We used the cafes to identify the key elements for a positive experience of intermediate care and to inform the subsequent consultation document inviting local people to comment on plans to make changes to intermediate care services in Bushey as part of the new countywide strategy for intermediate care. These changes are needed because as the number of older people in the population increases, the NHS and social care will have to work more efficiently to make sure that the right services are in place for people as demand grows.

A new vision for intermediate care – where more patients are looked after at home and beds are commissioned in a larger number of locations – was agreed by the Board of NHS Hertfordshire in July 2010. In May 2011 the Board considered the outcome of the consultation and agreed the next steps to be taken to ensure that the vision becomes a reality. This included proposals around the relocation of beds from Windmill House in Bushey. QIPP During 2010-11, all NHS organisations in Hertfordshire worked together with GPs to plan for how health services will be delivered over the next 5 years, ensuring that the quality of services improves and to make sure we are putting the money available for health services in the county to best use. Called QIPP – Quality, Innovation, Productivity and Prevention – this programme of work is a priority for the PCT and focuses on our aim to deliver care, where appropriate, outside of major hospitals and closer to people’s homes. Health needs assessment of the Hertfordshire Probation Trust caseload Working with the Hertfordshire Probation Trust, we carried out a health needs assessment of offenders on the probation caseload. The findings have been shared with partner agencies who will agree their priority areas for action and take them forward sharing expertise between agencies. High Impact Actions for Nursing Group Led by NHS Hertfordshire, membership of the group comprises senior nurses from the four Hertfordshire NHS organisations that provide care to patients. The aim of the group is to work together to share good nursing practice that will lead to improvements in the quality of patient care wherever patients receive it. Initially the group concentrated on pressure ulcers and has agreed a common approach to identify and manage them and this includes a definition of an unavoidable pressure ulcer. A framework has been developed to report pressure ulcers, which includes links to adult safeguarding procedures. Positive feedback has been received from the Strategic Health Authority and the framework has now been shared across the East of England to promote good practice. Following the success of the pressure ulcer work we are using a similar process to make improvements in other areas including nutrition and hydration and reducing the number of patients suffering from urinary tract infections following catheterisation. Equality delivery system NHS Hertfordshire is currently working with all other NHS organisations in the county, Hertfordshire Local Involvement Network and other local interests including the voluntary sector to implement the new equality delivery system (EDS). The EDS will improve the way in which people from different groups are treated as service users, carers and employees. This means that wherever people access NHS services they will find organisations working to the same set of objectives and with a coherent approach around equality and human rights

Carers Health Forums NHS Hertfordshire works in partnership with colleagues from Carers in Herts to run six Carers Health Forums each year. These forums are an opportunity for family carers to come together and discuss their experiences of health services directly with the health professionals that provide and commission them. The events take a ‘you said – we did’ approach and this, along with reports in Carers in Herts’ newsletter, Carewaves, provide ongoing feedback to carers on how their input has influenced the way in which services are provided. Improving mental health using exercise referral Physical activity can make a big difference when recovering from mental health problems. Working with staff from Hertsmere Leisure, colleagues from local specialist mental health services and voluntary organisations we have created an easy and supportive approach that helps people take part in a structured exercise programme. Once the approach is established then we expect it to become a standard part of mental health care pathways across all of Hertfordshire Making a difference to end of life care The "ABC project" is an education project funded by NHS East of England and managed by the Mount Vernon Cancer Network (part of NHS Hertfordshire). It aims to improve the end of life care of for patients and families by increasing the confidence and skills of staff working in nursing and residential homes, as well as doctors and nurses working across Bedfordshire and Hertfordshire. Over the next 2 years, 450 care home staff and 1250 nurses and doctors will access the programme. It makes a difference to patient care because it gives staff the confidence to discuss with patients and their families how and where they would like to be looked after at the end of their life as well as the skills and knowledge to enable this to happen. Since the programme began this year over 46 care homes and over 200 staff have taken part in the programme. Public and stakeholder engagement NHS Hertfordshire is committed to developing a strategic approach to patient and public engagement, to ensure that involvement is linked to both national and local NHS priorities; and to provide a way for patients to have a say in their health services. The PCT is a partner in a public engagement partnership with the county and district councils, and Hertfordshire Police. A countywide stakeholder forum of local council and voluntary sector partners continues to advise the PCT on the implementation of health service changes from a stakeholder perspective. During the past year the PCT has also been involved in the following projects:

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Patient and carer involvement groups There are now two diabetes patient and carer involvement groups in the county. These groups were established in partnership with Diabetes UK and are supporting the implementation of personal health plans.

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PPI project and GP commissioning The public engagement team was awarded pathfinder funding to work with emerging GP consortia to develop their public engagement strategy and processes to complement the role and responsibilities of the new HealthWatch organisation. This, in turn, has led to an invitation to join an advisory group supporting a national evaluation of public involvement in commissioning processes for services for people with long term conditions.

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Patient Reference Groups – Directed Enhanced Service (DES) The public engagement team is working with GPs and practice managers to set up patient reference groups, a new national patient participation initiative for general practice. Each practice receives funding to establish a group; to jointly agree priority issues; to undertake an annual practice survey and to draw up an action plan. Together with primary care colleagues, the team is developing a series of evaluation criteria as part of the quality and outcome framework which is the process that measures GP performance.

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‘Lifegeta’ workshops The public engagement team has worked with north Hertfordshire patient group member, Sue Ross, who is a national media spokesperson and motivational speaker on stroke care. Sue uses her experience as a younger stroke patient to run her ‘Lifegeta’ workshops which help address the emotional effects of people who have recently suffered a stroke. The PCT provided funding for a recent local workshop.

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‘Conversation cafés’ This year, the PCT hosted several conversations cafés to support consultation about key service changes in intermediate care and the future of the pilot urgent care centres in Hertford and Cheshunt. The format is popular with attendees because it gives people the opportunity to explore and discuss issues in depth in small groups. Outcomes from each café are considered by the Board as part of their decision making process.

Equality, diversity and human rights Over the past year we have: 

Continued to work in partnership with Hertfordshire County Council, Hertfordshire Constabulary and Hertfordshire Partnership NHS Foundation Trust in the development of the Hertfordshire Equality Council (HEC). Its work will encompass every strand of equality and diversity and will be the only equality council in the UK that has a county-wide remit. Working with a newly appointed board of trustees the HEC will quickly become fully operational.

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Begun work with all other NHS organisations in Hertfordshire to develop a new equality delivery system (EDS) to improve the way in which people from different groups are treated as service users, carers and employees. From April 2012, the EDS will be used in every NHS organisation in England which means that wherever patients go for NHS services they will find organisations working to the same set of goals around equality and human rights. An important part of this work is the engagement with ‘local interests’ who will be influential in the development and monitoring of the system.

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Continued close involvement with the Homeless Strategy Group on developing the Homeless Action Plan working with the homeless community in Hertfordshire.

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Been a member of the East of England Strategic Migration Partnership Health Working Group, which exists to promote, initiate, support and monitor health provision for migrants, asylum seekers and refugees in the East of England. The group comprises membership from the NHS, the Department of Health Asylum Seeker Coordination Team and partners such as the Red Cross. We have also been involved in the publication of the Commissioning Framework for Language Support, which includes numerous local case studies to demonstrate good practice, makes recommendations on how to make health services more accessible to those facing language challenges and information about language support services and agencies.

Environmental, social and community issues Sustainability report NHS Hertfordshire aims to reduce the total CO2 emissions from our activities by 20% from the 2008/9 baseline by December 2015. To meet this we have set a number of targets for our buildings, transport, waste and procurement, including: 

To reduce carbon emissions from our estate by 25%

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Reduce our impact from transport emissions from staff and patient travel. Reduce carbon emissions related to staff business travel by 10% by reviewing the way the PCT works across a large geographical area to ensure services and facilities are provided in such a way that minimises as far as practicable the environmental

impact; and to include environmental criteria in specifications for third party transport contracts by 2013 

Minimise waste, reducing incineration waste and reducing general waste by 20% and increasing recycling to 50% of our total waste.

We will also take action to embed carbon management into the organisation by including carbon management into existing and new policies. We will also ensure that we have a carbon management project team to support activities and that we have a communication strategy that helps deliver objectives. And we will present an annual carbon management report to the Board. Emergency preparedness We continue to work closely with partner agencies via the Hertfordshire Resilience Forum. This ensures the PCT and the NHS as a whole in Hertfordshire is represented and involved in all aspects of emergency planning. Through Hertfordshire Resilience we are able to share information about emergency planning, jointly test our plans and ensure that we take a coordinated approach to emergency planning in the county. We are preparing for the 2012 Olympics specifically the events that will take place in the Lea Valley White Water Centre but more generally with the impact that the games may have on primary care arrangements across Hertfordshire. This year we have concentrated on providing assurance that our providers have robust business continuity arrangements. We have particularly concentrated on GP surgeries and to date we have reviewed more than 60 practice business continuity plans. We regularly hold exercises with our partners to test that the arrangements contained in our emergency plans are robust. Exercises held this year include scenarios to test our response to a fuel shortage and its effect on business continuity together with mass casualty incidents such as terrorist attacks. Our Major Incident Plan is fully compliant with the requirements of the NHS Emergency Planning Guidance and all associated guidance. Social and community issues The PCT actively engages with local communities, patients and service users in planning, developing and making decisions about local health services. We do this in a number of ways that include: 

Consultation activities around proposed service changes

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Patient representatives on PCT groups and committees

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Community roadshows and events

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Presentations to patient and community groups

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Establishment of patient and stakeholder participation groups.

We also work closely with local partners across the public and voluntary sector to both understand and meet the health and social care needs affecting our population. We regularly attend and make submissions to Hertfordshire County Council’s health scrutiny committee and health panel groups working at local authority level. We have also fostered good relationships with Hertfordshire Local Involvement Network (LINk) and have developed patient groups aligned with GP practices in many areas of the county. Persons with whom the PCT has contractual or other essential arrangements        

133 GP practices 195 dental practices 238 community pharmacies 159 optician practices acute hospital providers (with the main ones set out in note 33 of the accounts) East of England Ambulance Service Trust Hertfordshire Partnership NHS Foundation Trust Hertfordshire Community Trust

and various voluntary and independent providers of health care.

Events and activities Throughout the year we held many health promotion and awareness campaigns aimed at helping people in Hertfordshire to get the best out of their health services, to recognise the early signs and symptoms of certain conditions and to lead healthier and more active lives. The NHS belongs to us all - let's use it right We continue to promote our "Let's use it right" campaign, designed to help people make the right choice when it comes to getting the health care and advice they need. There are a range of health services on offer in Hertfordshire but people do not always use the most appropriate one to meet their needs. So we developed an ongoing programme of activities where we could have conversations with people to help them make informed decisions about using the right service depending on their health needs at the time. Our promotional activities this year included: 

Running a series of "roadshows" held at supermarkets and hospitals where we could have conversations with people about getting the best from health services and giving them information to take away explaining what is on offer and where

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Providing speakers at many community events and meetings to present and discuss Let's use it right

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Creating a poster campaign designed to encourage people to make better use of the expertise available from their local community pharmacist and to purchase basic medicines from their pharmacy or supermarket rather than making an appointment to see their GP for a prescription

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Commissioning a large billboard encouraging people to use their urgent care centre or minor injuries unit rather than the A&E department for illnesses and injuries that need to be treated quickly but are not life-threatening

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Regular media campaigns supporting the Let's use it right key messages.

Hertfordshire health bus With sponsorship support from Pfizer, NHS Hertfordshire toured the county in a health bus in January 2011. Over a two week period more than 3,000 people hopped on board find out how they could improve their health by getting advice on quitting smoking, taking a lung function test and young people could take a quick and easy test for Chlamydia. The bus visited shopping centres and supermarkets around the county and made another visit during May 2011, this time offering NHS health checks to people aged between 40 and 74 in addition to the services on offer earlier in the year.

Lung cancer - helping people recognise the symptoms A public information campaign to help people recognise the early symptoms of lung cancer was launched in Hertfordshire this year. The ‘cough cough’ campaign focused on a simple message – that an unexplained cough which lasts for 3 weeks or more needs checking out by a GP and a simple chest x-ray could diagnose any problems early and make someone’s cancer easier to treat. The campaign was funded by the Department of Health and included billboard, newspaper and bus advertising, as well as some innovative coughing bus shelters which had a sound chip installed. Posters and leaflets were also available from GPs and pharmacies and the message took to the streets with volunteers from the Mount Vernon Cancer Network hosting public events in eight locations across Hertfordshire and Luton.

Engaging with our staff We have a range of mechanisms that encourage conversation and good communications within the organisation. These include: 

A monthly team brief - comprising key messages from the executive team - that is cascaded throughout the organisation. Team brief gives the opportunity for staff to discuss the content at their team meeting and to feedback comments and questions to executive team that are answered in the subsequent brief



Regular team meetings



A well used staff intranet containing a wealth of information including events, summaries and explanations of national policy, local services changes, NHS news and social and community events



Regular Chief Executive briefings



Bi-monthly director briefings

We also have a staff reward and recognition scheme that allows people to nominate their colleagues to receive an award for a specific achievement or for doing something great that demonstrates our values:    

Care – my work leads to better health, patient experience and healthcare Confident – I know, I can and I will Challenge – I check, question and challenge constructively Complete – I take personal responsibility and follow things through with urgency

And we have annual long service awards for those members of staff that have completed 20, 30 or 40 years service. PCT employees, including policies NHS Hertfordshire is committed to being an organisation within which diversity, equality and human rights are valued. We will not discriminate either directly or indirectly and will not tolerate harassment or victimisation in relation to gender, marital status (including civil partnership), gender reassignment, disability, race, age, sexual orientation, religion or belief, trade union membership, status as a fixed-term or part-time worker, socio-economic status and pregnancy or maternity. We are committed to supporting all staff to develop and enhance their skills ensuring they commission the best services for patients and to help prepare them for changes to their roles that the NHS reforms may bring about. We support our staff to have a healthy work-life balance by offering a range of working patterns including part time hours, the opportunity to purchase additional annual leave, taking a career break and working annualised hours.

And we offer a range of other staff benefits and activities as part of our staff wellbeing programme that includes:   

access to NHS childcare coordinators who provide advice and support on childcare issues an Employee Assistance Helpline providing practical information, legal advice, telephone and face to face counselling to help cope with a variety of personal, family and workplace issues sessions with a nutritionist.

Policies Our human resources policies include:                  

Alcohol and Substance Misuse Policy Attendance Management Policy Bullying and Harassment Policy Capability Management Policy Criminal Records Bureau Policy Disciplinary Policy Education, Training and Development Policy Equal Opportunities Policy Grievance Policy Maternity Guidelines Performance Review, Appraisal & Personal Development Policy Recruitment and Selection Policy Terms and Conditions on Appointment and Promotion Retirement Policy Smoke Free Policy Stress Policy Whistleblowing Policy Work Life Balance Policy

These and other human resources policies can all be downloaded from our website www.hertfordshire.nhs.uk/resource-centre. Consultation with staff NHS reforms: Staff were invited to respond to a consultation on how NHS reforms announced in the Government's white paper "Equity and excellence, liberating the NHS" should be implemented. Subsequently a number of other consultations associated with the reforms were published and staff were encouraged to respond to these too. The NHS Constitution and Whistleblowing: Staff were invited to respond to a consultation on proposed amendments to the NHS Constitution to strengthen safeguards for NHS whistleblowers and we held a staff focus group where the proposals were discussed.

Other staff consultation activities that have taken place this year concerned the relocation of staff from office bases in Watford and Letchworth to the head office in Welwyn Garden City. The PCT has a joint negotiating committee where representatives from staff side and the PCT management team meet regularly to consult and negotiate on issues concerning PCT staff. Absence due to staff sickness

Total days lost Total staff years Average working days lost

2010-11 number 4169 490 5.3

The 2010-11 NHS Hertfordshire sickness absence rate as a percentage of the available days was 2.39%. The average for all PCTs for the same period was 4.17% and was 3.99%.for PCTs in the East of England.

Our performance Our strategic objectives and progress NHS Hertfordshire's Strategic Plan has three overarching goals:   

Keeping Hertfordshire healthy Enhancing the patient experience Commissioning high quality health care

Under each of these goals is a series of workstreams designed to deliver the outcomes to help us achieve our goals. Some of the achievements and activities from these workstreams are: Keeping Hertfordshire Healthy Smoking: smoking prevalence in Hertfordshire continues to decrease and is below the national average. Our stop smoking services helped 7,668 people to quit last year – a thousand more than the year before. There have been significant increases in the number of people from black and minority ethnic groups, pregnant women and people living in our most disadvantaged communities who have managed to stop smoking. Sexual health: Chlamydia is the most common sexually transmitted infection amongst young people and because it has no symptoms, most people who have it won’t know they’ve got it. If left untreated, Chlamydia can lead to complications and infertility. During the year our Chlamydia outreach team carried out a comprehensive programme of activities working with young people aged 15 to 24 in schools, colleges and universities to raise awareness of this condition, how it can be prevented and encouraging those who might be at risk to take a simple, discrete test. Immunisation: During 2010-11 we exceeded our flu target of vaccinating 74% of the over 65s with our rate of 76% being the best in the East of England region and 11th best in the country. We continue to work closely with the child health team at Hertfordshire Community NHS Trust and with our GPs to maximise the uptake of all childhood immunisations, focusing particularly on MMR rates. Screening: Working in partnership with colleagues from local hospitals we ran a number of successful public health campaigns during the year designed to encourage people to attend for screening when they are invited. The campaigns were for cervical, bowel and lung cancer. We are pleased that we achieved our objectives in these areas and will continue to remind people how important it is that they are screened for these and other conditions as many can be treated and cured if they are caught early.

Enhancing the patient experience What patients tell us about their experiences can lead to real improvements in the services that we commission. As a direct result of patient feedback this year we have worked with one GP practice to improve the way they handle patient complaints and with another to make it easier for patients to make an appointment by phone. Commissioning high quality care Access to GPs: During 2010-11, 120 out of 131 eligible GP surgeries (91.6%) signed up to offer extended opening hours in either the morning, evening or on Saturdays. This resulted in more than 100,000 extra GP appointments and 40,000 extra nurse appointments being made available to Hertfordshire residents. Intermediate care: This year we worked with our partners in the county council and in Hertfordshire Community NHS Trust to agree a new way of providing intermediate care services for the growing number of older people in the county. We consulted with patients and stakeholders about the vision – where more patients are looked after at home and beds are commissioned in a larger number of locations – through a series of successful conversation café events. Maternity and newborn: We continue to promote the importance of seeing a midwife early in pregnancy and have produced information cards and posters to get the message out to women who are visiting a pharmacy for pregnancy tests. End of life: So that more patients are able to die at home if that is their choice, NHS Hertfordshire has commissioned a number of services including:  an expanded 24 hour community nursing service in the east of the county with a Marie Curie rapid response nurse  a palliative care clinical nurse specialist  a 24 hour helpline for patients and professionals  additional investment in hospice at home schemes. Adult Mental health: We have made some major investments this year to improve care for people with Dementia, enabling them to maintain their independence and providing support for carers and families. This includes:  an Early Memory and Diagnostic Assessment Service  a Dementia specialist nurse at Watford General Hospital  Dementia cafes  a Singing for the Brain service and we will continue to develop services in 2011/12 by:    

developing a shared care protocol for an Adult ADHD service opening an Assessment Day Treatment Unit in Watford, delivering a Rapid Assessment and Treatment service within Albany Lodge and a Short Stay Rehabilitation Unit which will lead to reduced admissions and lengths of stay within acute inpatient units. tendering for a complex need service following a successful pilot.

Learning disabilities: Since publication of Six Lives (2008) and Healthcare for All (2009), we have been a key partner in improving the health and wellbeing of people with learning disabilities and improving access to health services. Last year 1156 people with learning disabilities received a health check comprising an annual review that allows early detection and diagnosis of common health conditions, and for people with learning disabilities to be involved more closely in management of their health and wellbeing. Working with partners in Hertfordshire Health and Community Services (formerly Adult Care Services) and with people with learning disabilities, their carers and clinicians we have developed ‘My Purple Folder’. My Purple Folder combines information about common health conditions that people with learning disabilities present with, suggestions for communicating effectively and a health action plan for clinicians to complete after each consultation. More than 1200 people now own a Purple Folder and are using them for hospital and other health appointments. And we have delivered training to 566 health professionals in the county to help them communicate effectively with people with learning disabilities. Key performance indicators In addition to finance, performance in the NHS is judged by measuring a large number of non-financial targets. The national key priority areas for 201011 were 1    

Improving access: maximum 18 weeks waiting time from referral to treatment improving access (including at evenings and weekends) to GP services better access to genito-urinary medicine (GUM) clinics waiting times in accident and emergency departments

2 Keeping adults and children well, improving their health and reducing health inequalities:  helping people to stop smoking  tackling childhood obesity  increased screening for Chlamydia  reducing waiting times for cancer treatment 3 Improving cleanliness and reducing health care associated infections:  Clostridium Difficile (CDiff) We were pleased that we met our targets in areas such as the number of people we helped to quit smoking using NHS services, making sure that people with suspected cancer got to see a specialist quickly and that we continued to reduce hospital associated infections. Areas where we need to improve include increasing the number of young people who are screened for Chlamydia, working with more of our GPs to offer improved access to appointments and reducing childhood obesity. Our performance against these key targets is shown in the table below.

Performance data 2010/2011 With the election of the coalition government in May 2010 the NHS has been undergoing an ongoing exercise to re-focus performance away from top down targets to a broader range of indicators to measure and improve quality and outcomes. The NHS was, therefore, in a process of transition during 2010/11 so the information to measure these new indicators was not available for 2010/11 but will be available for 2011/12 onwards. The performance information attached reflects the national key priority areas for 2010/11 which were: National commitments Indicator

Target 2010/2011

2010-11 Performance

A&E waiting times (maximum 4 hour wait)

95%

96.20%

Access to Genito-Urinary (GUM) clinics within 48 hours

98%

Category A (most serious) calls responded to within 19 minutes (Ambulance Trust performance)

95%

99.93% 95.61% Ambulance Trust as a whole 98.17% - Hertfordshire

Category A calls responded to within 8 minutes (Ambulance Trust performance) Management action to improve overall performance was taken throughout the year. However the benefit from this was not sufficient to meet the targets and the bad winter period in December/January added to the performance pressures. An adjustment has been agreed for Cat A in recognition of this with result that the Trustâ&#x20AC;&#x2122;s performance has been revised to from 74.56% for Cat A to 75.2%.

75%

75.20% Ambulance Trust as a whole 77.69% Hertfordshire

Category B (less severe) calls responded to within 19 minutes (Ambulance Trust performance)

95%

Commissioning of crisis resolution/home treatment mental health services

1636

93.12% Ambulance Trust as a whole 95.74% Hertfordshire 1684

Indicator

Target 2010/2011

2010-11 Performance

Commissioning of early intervention in psychosis mental health services

150

159

Delayed transfers of care (rate per 100,000 population) â&#x20AC;&#x201C; patients fit enough to be discharged from hospital but who are delayed either from returning home or into an intermediate or residential care bed Diabetic retinopathy screening offered to people with diabetes

4 per 100,000 population

95%

104.00%

Recording a patientâ&#x20AC;&#x2122;s ethnicity (percentage of patient records with valid code)

85%

90.20%

Target 2010/2011

2010-11 Performance

First 96% Surgery 94% Drug 98% All 93% Breast 93% First 85% Screening 90% Upgrade n/a Part 1 70% Part 2 75%

96.80% 90.50% 100% 98.10% 92.70% 90.40% 97.90% 96.80% 95.80%

National priorities

Indicator

All Cancers: one month diagnosis to treatment waiting times All Cancers: two week urgent referral to first outpatient appointment waiting times All Cancers: two month urgent GP referral to treatment waiting times Cervical screening of women aged 25 to 49 (Part 1) and 50 to 64 (Part 2) Commissioning a comprehensive child and adolescent mental health service (CAMHS) Quality of stroke care (patients who spend at least 90% of their time on a specialist stroke unit)

Achieve Level 4

70%

Q1 4 Q2 4 Q3 4 Q4 4 86.00%

Indicator

Target 2010/2011

2010-11 Performance

PCT staff satisfaction score obtained from the NHS annual staff survey

Dependent upon all PCT scores

3.5

82%

88.61%

Admitted 90% Non-Admitted 95% England ave 77.4%, East of England ave 77.9% Target of population as a percentage 60.92%

Admitted 90.9% Non-Admitted 97.6%

Number of women who have seen a midwife or maternity health care professional by 12 completed weeks of pregnancy Patients waiting no longer than 18 weeks from referral by GP or other health professional to start of treatment Patient Access – patient satisfaction with access to a GP Access to primary dental services (proportion of population visiting an NHS dentist in previous 24 months) Breastfeeding coverage collated at the time of the 6-8 week child health development check. Coverage means information on the number of children who are a) totally breastfed, b) partially breastfed (breast and bottle) and c) not breastfed at all.

59.07

Target coverage: 95%

Qtr 1 94.5% Qtr 2 95.01% Qtr 3 96.29% Qtr 4 95.87%

DTaP/IPV/Hib Aged 1: 95% PCV Aged 2: 95% Hib/MenC Aged 2: 95% MMR Aged 2: 95% DTaP/IPV Aged 5: 95% MMR Aged 5: 95%

94.76% 89.6% 93.3% 88.9% 88.0% 85%

From this data we can determine the prevalence of breastfeeding which, for Hertfordshire is 53.3%.

Childhood immunisation rates by recommended ages

75.50%



Derived from the national GP Patient Survey, patient satisfaction of 5 key access measures - ease of getting through on the phone, able to see a GP fairly quickly, able to book ahead for an appointment, ability to see a preferred GP & satisfaction with opening hours

Indicator

Target 2010/2011

2010-11 Performance

Participation rate 86%

Participation 93.7%

Obesity prevalence  West < 10%  East & North < 9%

Obesity prevalence  West 9.3%  East & North 8.9%

Participation rate 86%

Participation 89.5%

Obesity prevalence < 14%

Prevalence 17.0%

Chlamydia screening

25% Target Population

18.92%

Incidence of Clostridium difficile (C diff) infection

399

354

Incidence of MRSA Four week smoking quitters (people who quit using NHS stop smoking services for 4 weeks or more) Number of drug users in effective treatment

27 cases in the community

7614

7616 (100.3%)

Hertfordshire 1646 England ave 89.7%, East of England ave 90.13%

1689

Weighing and measuring (Reception year)

Weighing and measuring (Year 6)

Patient Experience - Satisfaction with care received at GP surgery

90.26%

Key Achieved

Close to achieving

Not achieved



Disclosure of serious incidents involving data loss or confidentiality breaches In line with the Information Governance Strategy the PCT has assigned responsibility for information governance. Risks are managed, monitored and reviewed by the Information Governance Sub-Committee which reports through the Risk and Assurance Sub Committee to the Board. We publish any personal data related incidents and breaches within our annual report in line with Department of Health directives. To help minimise the risk of data loss all PCT laptops and portable devices such as memory sticks are encrypted. Policies and procedures incorporating information governance have been reviewed, ratified and approved. Established reporting lines with associated risk assurance measures are assigned which now incorporate a more stringent scoring mechanism. There was one personal data related incident reported to the PCT classified as a serious incident. Summary of personal data related incidents 2010-2011 Category

Nature of Incident

Total

Loss of inadequately protected electronic equipment, devices or paper documents from secured NHS premises Loss of inadequately protected electronic equipment, devices or paper documents from outside secured NHS premises Insecure disposal of inadequately protected electronic equipment, devices or paper documents from outside secured NHS premises Unauthorised disclosure Other

II III IV V

0 0 0 1

Information governance (IG) training The IG E-Learning modules are now available to all staff as part of the induction process. Principles for remedy The PCT follows the six principles set down by the Parliamentary and Health Service Ombudsman in ‘Principles for Remedy’ (October 2007). The aim of these principles is to ensure that instances of injustice or hardship as a result of poor service or maladministration are redressed. The principles are:  Getting it right  Being customer focused  Being open and accountable  Acting fairly and proportionately

 

Putting things right Seeking continuous improvement.

How have we met these principles?      

We have incorporated the NHS complaints procedures into our own policy The Chief Executive takes a personal interest in all complaints and the quality of investigation and response We have a responsive Patient Advice and Liaison Service (PALS) which can resolve many problems or concerns without the need for a formal complaint We have in place a ‘losses and compensations’ procedure Regular reporting to the Board of complaints received and PALS issues as part of the PCT’s performance monitoring Applying Department of Health published best practice guidance on NHS Continuing Health care Redress, in response to the Parliamentary and Health Service Ombudsman’s report ‘Retrospective Continuing Care Funding and Redress’.

Financial Review An overview The year ended 31 March 2011 was successful on many fronts. Following merger of NHS East and North Hertfordshire and NHS West Hertfordshire on 1 April 2010 and the demerger of Provider Services to form Hertfordshire Community NHS Trust on 1 November 2010, there is now a single NHS commissioning organisation covering Hertfordshire. The newly formed PCT carried on the recent past achievements of its predecessors again recording financial balance, with an underspend of £638,000, whilst at the same time further improving performance on key service targets. However, the year was much more challenging financially. From early on the PCT saw significant increases in activity within acute hospitals leading to a large in-year overspending. Having originally set aside 1% of its funding to support service transformation, this fund had to be frozen during the year to cover the unplanned increase in expenditure. Whilst disappointing that over £11m of this funding could not be spent on transformation, the PCT has been able to double the amount set aside for transformation in 2011/12 to over £32m. The PCT did recall £3m of funding deposited in previous years with the East of England Strategic Health Authority. This funding was utilised paying for patients receiving routine treatment faster than required under the contracts with local hospital trusts. The PCT still has £6.2m on deposit with the Strategic Health Authority which will be utilised in future years. During the year there was further development of Practice Based Commissioning (PBC) with greater involvement of these groups in the working of the PCT, particularly the clinical decision making processes. Engagement of PBC Groups, Shadow GP Commissioning Consortia, individual GPs and other clinicians remains vital to the ongoing financial and performance management of the PCT and the wider health economy of Hertfordshire. Financial Duties and Targets PCTs have four main financial targets and performance on these in 2010-11 is detailed below. 1)

Costs not to exceed revenue resource limit The PCT’s revenue resource limit was £1,715.5m and net expenditure was £1,714.9m. The duty was achieved with expenditure being within the agreed resource limit by £638,000. This underspend will be returned to the PCT by the Department of Health, who will increase the PCT’s resource limit by £638,000 in 2011/12. (Accounts – Note 3.1)

To remain within cash limit All PCTs are set a cash limit. This is the amount of cash that can be drawn from the Department of Health. PCTs are not allowed to be overdrawn and are expected to end the year with minimal cash balances. 31

The PCT drew down its full cash limit and retained less than £1,000 at 31 March 2011. The duty was therefore achieved. (Accounts – Statement of Financial Position as at 31 March 2011) 3)

Capital costs not to exceed capital resource limit The PCT’s capital resource limit was set at £10.5m and capital expenditure incurred was £8m. The PCT achieved this duty, underspending by £2,556,000. However, £1.7m of this underspend is attributable to the demerger of Provider Services from the PCT. The PCT’s capital programme included £1.7m of capital expenditure on Provider Services, which following demerger was not incurred by the PCT. The PCT’s allocation was not reduced so inflating the size of the underspend. (Accounts – Note 3.2)

To recover the full cost of provider services As the PCT no longer has a Provider Arm, this duty does not apply to NHS Hertfordshire. (Accounts – Note 3.3)

Management costs and Running costs The PCT was set a management cost ceiling in 2010-11 which required it to reduce costs on the commissioning side of the PCT by just over £1m to £14.9m. The PCT actually reduced management costs by over £2.2m (13.8%) with the total for the year being £13.8m. This equated to spending per head of population of £14.06. The management costs recorded in the accounts are only a small part of ‘headquarters’ running costs and new in 2010-11 has been the inclusion in the Accounts of a note showing the wider running costs of PCTs. For 2010-11 total running costs, including those on public health, equated to £27.7m or just over 1.6% of total spending. Although no target was set for PCTs in 2010-11, the Operating Framework for the NHS in England 2011/12 suggests that running cost allowances for GP commissioning consortia could be in the range of £25 to £35 per head of population. The Framework also says that running costs will have reduced by a third by 2014/15. The commissioning portfolio of PCTs exceed that which is planned to transfer to GP commissioning consortia, so one would expect PCTs’ running costs on commissioning services to currently be significantly higher than this range of £25 to £35 per head of population. NHS Hertfordshire’s 2010-11 running costs on commissioning services is only £26.08 per head of weighted population and on a like-for-like basis is therefore already significantly lower than the running cost allowance likely to be received by local GP Consortia.

The 2010-11 headline pay rise for staff and managers under Agenda for Change was 2.25%. This was in line with the national agreement, which was the final year of a three-year agreement on pay. Staff on the lowest pay points (1-12) received higher awards, with a flat rate increase of £420 equating to increases of between 2.31% and 3.17%. There were also some adjustments to pay points within staff bands 5 and 6. The pay for Very Senior Managers in 2010-11 was frozen with no pay rise. (Accounts – Note 7.5.2 and Note 7.6) Public Sector Payment Policy The PCT has an obligation to pay non-NHS creditors within 30 days of receipt of goods or a valid invoice (whichever is later), unless other payment terms have been agreed. This is monitored during the year. The PCT paid 94.84% of invoices from non-NHS organisations within this target. This is an improvement on performance in 2009-10 (92.04%), but is still just short of good practice. By value, 92.38% of invoices were paid within target, a small deterioration on 2009-10 (94.27%). On invoices from other NHS organisations, the PCT paid 81.10% of invoices (96.31% by value) within 30 days. In both cases this represents a deterioration on performance in 2009-10. The PCT expects performance in 2011/12 to be improved. (Accounts – Note 8.1) Related party transactions In the year to 31 March 2011, a number of local GPs sat on the Board and Executive Committee of the PCT. Payments amounting to £12.3m were made to these GPs’ practices, in their capacity as providers of primary care services. Payments for similar services were made to other GP practices within the PCT. The GPs on the Board and Executive Committee had no direct control over how these funds were allocated. All Board members and senior managers are required to complete a declaration setting out any outside interests. Note 33 to the Accounts shows the value of transactions with organisations included in the register of interests. The Department of Health is regarded as a related party. During the year, the PCT had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent Department. Further details of the amounts and the parties involved are included in the accounts. (Accounts – Note 33) Where the money was spent The majority of the PCT’s funding was spent on commissioning services from other NHS and non-NHS organisations. The majority of acute hospital activity is charged to PCTs under “Payment by Results” using a national tariff which is published each year by the Department of

Health. To reflect unavoidable cost differences across the country, the Department of Health also publishes market forces indices, with providers being paid this percentage in addition to the tariff. The largest single element of spending was on general and acute services (45.5%). Next were primary care general medical services (9.2%), prescribing (9.1%), mental health (8.3%) and community services (6.8%). Only 1.6% of costs were incurred on the administration or running costs of the PCT. A more detailed analysis of where the money was spent is shown in the following pie chart.

Analysis of 2010/11 Net Expenditure Other Healthcare 4.4%

Administration 1.6%

Community Services 6.8% Prescribing 9.1%

Mental Health 8.3%

General Medical Services 9.2%

Learning Disabilities 3.9%

Other Family Health Services 5.3%

A&E 2.6%

General and Acute 45.5%

Maternity 3.4%

Financial Outlook Achieving financial balance in the last four years has been a major success. Growth in funding for the PCT in 2011/12 has been agreed at 2.9%, significantly lower than in the last few years. The expectation is that funding growth in the remaining years of the current Parliament will be at similarly low levels. If the PCT is to continue to meet the rising demand for services and the goal of improved quality and outcomes, significant efficiency savings will be required across the health economy. The challenge for the PCT and its partners is to achieve efficiency savings of up to 20% over the next four years. To help rise to this challenge the PCT has committed 2% of its recurrent funding (ÂŁ32.3m) to support service transformation across the health economy. In addition to mitigate the impact of demand and performance volatility, the PCT has set aside a contingency reserve of ÂŁ18.5m. So, whilst the PCT can still look forward with some confidence, the current economic climate is more challenging. For the PCT to maintain financial balance and its track record of continuous improvement in both services and the health of the people of 34

Hertfordshire, it must continue to strive to achieve value for money across all of its spending. A summary of the budgets planned for 2011/12 is included in the table below. Description Expected Funding

£m 1,696.4

Spending Plans:Acute Services Mental Health and Learning Disability Services Community Services Continuing Care Other Non Acute Services GP Services Prescribing and Pharmacy Services Dental Services Ophthalmic Services Social Care Grant Corporate Costs Earmarked Investments for service reprovision Transformation Reserve Contingency Reserve Planned Expenditure

863.8 164.9 102.6 37.5 18.6 154.0 188.6 50.3 10.8 11.0 31.6 12.3 32.3 18.5 1,696.4

Policy on managing principal risks The Assurance Framework provides a comprehensive method for the effective management of the principal risks that arise in meeting the key strategic objectives agreed by the PCT Board. It identifies objectives which are at risk, gaps in control and insufficient assurances. It also provides a structure for evidence to support the ‘Statement on Internal Control’ and facilitates reporting key information regularly to the PCT Board. Directors are responsible for the continual updating of the Assurance Framework including evaluation of the risk score, updates on progress and identification of actions against gaps in control and assurance. The Assurance Framework is monitored by the Audit Committee and PCT Board. Role of the Audit Committee The Committee’s principal function is to advise the Board on the adequacy and effectiveness of the PCT’s systems of internal control and its arrangements for risk management, control and governance processes. In order to fulfil this function, the audit committee prepares an annual report for the Board and accountable officer. This report includes information provided by internal audit, external audit and other assurance providers. The opinion of the audit committee was that adequate assurance can be given to the Board on the effectiveness of the risk management and control processes in place during 2010-11.

Remuneration Report Members of the Remuneration Committee are non executive directors only, and membership during the year was:   

Stuart Bloom, Chair, NHS Hertfordshire Linda Farrant, Non Executive Director, NHS Hertfordshire and Mary Compton, Non Executive Director, NHS Hertfordshire.

The remuneration of senior managers is determined by national terms and conditions – Very Senior Manager Pay Framework. The senior managers are employed under the nationally agreed contractual arrangements, all having been employed on permanent contracts which include a six month notice period. There is no provision in the contracts for termination payments save any contractual entitlements to redundancy compensation which would be calculated using the agreed NHS formula.

Alan Pond Director of Finance and Productivity

Salaries and allowances 2010-2011 Name and title

Stuart Bloom - Chair Linda Farrant - Non Executive Member (Vice Chair) and Chair of the Remuneration Committee Paul Smith - Non Executive Member and Chair of the Audit Committee Mark Gainsborough - Non Executive Member Eliza Hermann - Non Executive Member Mary Compton - Non Executive Member (from February 2010) Kate Watts - Non Executive Member (from February 2010) Tracey Graily - Non Executive Member (from April 2010) Anne Walker - Chief Executive (to September 2010) Jane Halpin - Interim Chief Executive (from September 2010) and Director of Public Health Alan Pond - Director of Finance and Productivity

Salary/ fees (bands of £5,000)

2009-2010

Other remuneration (bands of £5,000)

Benefits in kind (rounded to the nearest £000)

Salary/ fees (bands of £5,000)

Other remuneration (bands of £5,000)

Benefits in kind (rounded to the nearest £000)

£000

40-45

35-40

5-10

10-15

5-10

0-5

5-10

0-5

5-10

60-65

150-155

155-160

150-155

110-115

2010-2011 Name and title

Andrew Parker - Director of Primary Care Development Gloria Barber - Director of Human Resources (to October 2010) Simon Rouse - Director of Strategic Planning (from January to August 2010) Lesley Watts - Director of Operations (from April 2010) Beverley Flowers - Director of System Management Alan Farmer - Director of Workforce Transformation (from January 2011) Tony Kostick - Joint Chair of the Clinical Executive Committee Mike Edwards - Joint Chair of the Clinical Executive Committee



Salary/ fees (bands of £5,000)

2009-2010 Salary/ fees (bands of £5,000)

Other remuneration (bands of £5,000)

Benefits in kind (rounded to the nearest £000)

Other remuneration (bands of £5,000)

Benefits in kind (rounded to the nearest £000)

£000

90-95

40-45

80-85

35-40

20-25

110-115

100-105

90-95

65-70

Alan Farmer is on secondment from The Princess Alexandra Hospital NHS Trust at no cost to NHS Hertfordshire

Pensions Benefits

Name and title

Real increase in pension at age 60 (bands of £2,500)

Lump sum at aged 60 related to real increase in pension (bands of £2,500)

Total accrued pension at age 60 at 31 March 2011 (bands of £5,000)

Lump sum at age 60 related to accrued pension at 31 March 2011 (bands of £5,000)

Cash Equivalent Transfer Value at 31 March 2011

Cash Equivalent Transfer Value at 31 March 2010

Real increase in Cash Equivalent Transfer Value funded by PCT

Employer’s contribution to stakeholder pension

£000

£00

Relating to the period 1 April 2010 to 31 March 2011 Anne Walker - Chief Executive (to September 2010) Alan Pond - Director of Finance and Productivity Jane Halpin - Interim Chief Executive (from September 2010) and Director of Public Health Beverley Flowers - Director of System Management Simon Rouse - Director of Strategic Planning (to August 2010) - see Note 3 Gloria Barber - Director of Human Resources (to October 2010) - see Note 2 Andrew Parker, Director of Primary Care Development Lesley Watts - Director of Operations (from April 2010) - see Note 3 Alan Farmer - Director of Workforce Transformation (from January 2011)



(2.5) - 0

55-60

175-180

1,026

1,103

(36)

(2.5) - 0

35-40

110-115

516

572

(53)

0-2.5

2.5-5

35-40

110-115

512

547

(39)

0-2.5

2.5-5

15-20

55-60

254

269

(19)

(2.5) - 0

30-35

90-95

500

536

(41)

25-30

75-80

Alan Farmer is on secondment from The Princess Alexandra Hospital NHS Trust at no cost to NHS Hertfordshire

Notes: 1. As Non Executive Members do not receive pensionable remuneration, there will be no entries in respect of pensions for Non Executive Members. 2. There is no disclosure in respect of Gloria Barber as she took retirement on 1st October 2010. 3. Nil return from Pensions Agency in respect of Simon Rouse. 4. No disclosure was made in respect of Lesley Watts in 2009-10 therefore the figures reflect only those figures available for 2010-11. 5. 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 particularly point in time. The benefits valued are the member's 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 scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension 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. The CETV figures and the other pension details include the value of any pension benefits in another scheme or arrangement which the individual has transferred to the NHS pension scheme. They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries. 6. Real Increase in CETV This reflects the increase in CETV effectively funded by the employer. It takes account of the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another scheme or arrangement) and uses common market valuation factors for the start and end of the period. ( ) Denotes a decrease in pension and lump sum entitlements.

Board expenses Name and Job Title Stuart Bloom Chair Linda Farrant Non Executive Director Paul Smith Non Executive Director Mark Gainsborough Non Executive Director Eliza Hermann Non Executive Director Mary Compton Non Executive Director Kate Watts Non Executive Director Tracey Graily Non Executive Director Anne Walker Chief Executive (To September 2010) Jane Halpin Interim Chief Executive and Director of Public Health Alan Pond Director of Finance and Productivity

Parking at Office £ (633)

Official Mileage £

Regular Car User £

Parking £

Public Transport £

Telephone Costs £

144

118

Other £

3,228

166

1,503

120

1,623

380

428

1,058

141

403

476

1,274

104

1,379

577

644

150

Total £ 3,174

1,211

(204)

228

697

199

191

1,111

(633)

744

847

107

1,133

(633)

1,639

843

110

2,027

Name and Job Title Andrew Parker Director of Primary Care Development Gloria Barber Director of Human Resources (To October 2010) Alan Farmer Director of Workforce Transformation (From January 2011) Simon Rouse Director of Strategic Planning (To August 2010) Lesley Watts Director of Operations Beverley Flowers Director of System Management

Parking at Office £ (633)

Official Mileage £ 693

Regular Car User £ 841

Parking £

Public Transport £

Telephone Costs £

Other £

906

(265)

(192)

Total £

(265)

889

348

1,132

(613)

(633)

Board members declarations of interests Board member Stuart Bloom Chair

Mary Compton Non-Executive Director

Tracey Graily Non-Executive Director

Kate Watts Non-Executive Director

Linda Farrant Non-Executive Director Mark Gainsborough Non-Executive Director

NHS Hertfordshire Board members declarations of pecuniary and other interests  Voluntary Co-ordinator, Bushey Community Cares Welfare Group  Consultancy to support United Synagogues welfare groups  Provision of consultancy support on a self-employed basis with Mighty Oaks Consultancy, which provides marketing services to private and public sector organisations (including the NHS).  Senior Manager with BT Global Services. BT is delivering the Spine, a core part of the NHS Care Records Service and the N3 broadband network connecting all NHS locations in England.  Husband is a Management Consultant with CSC an IT Consultancy who has been involved with the NHS National Programme for IT (NPfIT) and has worked closely with Connecting for Health, Norfolk and Norwich University Hospitals NHS Foundation Trust, Northumbria Healthcare NHS Foundation Trust and a number of Strategic Health Authorities including the East of England.  Husband works as a Consultant Physician at WHHT, a major provider of local acute services commissioned by the PCT and at the Royal Brompton and Harefield NHS Trust a provider of specialist services commissioned by the PCT. Mother in law works as a smoking cessation staff member fro the PCT on an agency basis.  Director, Barlow Medical Services Ltd (since Sept 2010) provides private medical services via some small contracts with the NHS via GP's  Trustee of Watford Mencap for 2.5 years, which has contracts with NHS in Hertfordshire  Trustee of MIND nationally for 6 months - Local Mind associations have contracts NHS in Hertfordshire  Director of Creative Funding Consultancy for 7 years- Have fundraised for organisations in the past which have gained funding from the NHS. Do not envisage writing bids to raise funds from NHS in the future  Husband is Headmaster of Watford Grammar School for Boys for 11 years. This Herts school is considering developing a centre of excellence for high performing autistic students for which they might apply for NHS funding  Non Executive Board member of Metropolitan Housing Partnership 

None

Board member Paul Smith Non-Executive Director Eliza Hermann Non-Executive Director Alan Pond Director of Finance and Productivity Dr Jane Halpin Interim Chief Executive

NHS Hertfordshire Board members declarations of pecuniary and other interests  Non Executive Director, William Sutton Housing Association (operates social housing) 

None



Partner is a GP partner at Haverfield Surgery, Kings Langley, and does work for the PCT as from 30/8/2010



Husband is a consultant employed by Luton and Dunstable Hospital NHS Trust, with whom the PCT has contracts Governor of SS Alban & Stephen Infant & Nursery School and Junior School Wife is Bone Marrow Transplant Quality Manager at Royal Free Hospital NHS Trust, (PCT has an Service Level Agreement with RFH)



Andrew Parker Director of Primary Care Development



Alan Farmer Director of Workforce Transformation Beverley Flowers Director of System Management Lesley Watts Director of Operations Mike Edwards Joint Chair Clinical Executive Committee Tony Kostick Joint Chair Clinical Executive Committee



None



None



Husband is a Cardiologist working at Luton and Dunstable, Bedford and Royal Brompton and Harefield NHS Trusts. The PCT holds contracts with all three providers Principal at Fairbrook Medical Centre, Borehamwood Director, Herts Health Limited since September 2006 Wife is a Trustee of Cherry Lodge Cancer Care Charity, Barnet (since October 2006) Principal, Dr Baxani and Partners, Stevenage, Clinical Lead, Stevenage PBC Group Club Doctor, Stevenage Borough Football Club, Expert 24 Ltd Health assessment software (clinical consultancy)

     

The Accounts Name of external auditor and cost of audit work Audit Commission 2nd Floor Sheffield House Lytton Way (Off Gates Way) Stevenage SG1 3HG The external audit fees for 2010-11 were £257,200 plus VAT. The external auditors have been commissioned to undertake statutory audit work only and have not provided any services of an audit or non-audit nature that would compromise their independence as auditors. Directors’ statement on audit information All executive and non executive directors have stated that as far as they are aware, there is no relevant audit information of which the PCT’s auditors are unaware and that they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the PCT’s auditors are aware of that information. Audit Committee members: Paul Smith (Chair) Mark Gainsborough Linda Farrant Mary Compton Statement of Chief Executive's responsibilities as the Accountable Officer of the PCT The Chief Executive of the NHS has designated that the Chief Executive should be the Accountable Officer to the primary care trust. The relevant responsibilities of Accountable Officers are set out in the Accountable Officers Memorandum issued by the Department of Health. These include ensuring that:    

there are effective management systems in place to safeguard public funds and assets and assist in the implementation of corporate governance; value for money is achieved from the resources available to the primary care trust; the expenditure and income of the primary care trust has been applied to the purposes intended by Parliament and conform to the authorities which govern them; effective and sound financial management systems are in place; and



annual statutory accounts are prepared in a format directed by the Secretary of State with the approval of the Treasury to give a true and fair view of the state of affairs as at the end of the financial year and the net operating cost, recognised gains and losses and cash flows for the year.

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

Dr Jane Halpin Chief Executive Date: 6 June 2011 Statement of Director's responsibilities in respect of the accounts The directors are required under the National Health Service Act 2006 to prepare accounts for each financial year. The Secretary of State, with the approval of the Treasury, directs that these accounts give a true and fair view of the state of affairs of the primary care trust and the net operating cost, recognised gains and losses and cash flows for the year. In preparing these accounts, directors are required to:   

apply on a consistent basis accounting policies laid down by the Secretary of State with the approval of the Treasury; make judgements and estimates which are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the primary care trust and to enable them to ensure that the accounts comply with requirements outlined in the above mentioned direction of the Secretary of State. They are also responsible for safeguarding the assets of the primary care trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors confirm to the best of their knowledge and belief they have complied with the above requirements in preparing the accounts. By order of the board.

Dr Jane Halpin Chief Executive

Alan Pond Finance Director

8 June 2011 46

HERTFORDSHIRE PRIMARY CARE TRUST STATEMENT ON INTERNAL CONTROL 2010-11 1. Scope of responsibility The Board is accountable for internal control. As Accountable Officer, and Chief Executive of this Board, I have responsibility for maintaining a sound system of internal control that supports the achievement of the organisation’s policies, aims and objectives. I also have responsibility for safeguarding the public funds and the organisation’s assets for which I am personally responsible as set out in the Accountable Officer Memorandum. My responsibilities as Accountable Officer in respect of internal controls are supported by the Finance and Performance Committee and the Audit Committee. Both of these committees report to the Board. The Finance and Performance Committee is chaired by a Non Executive Director. In addition the chair of the PCT’s Audit Committee is also a member of the Finance and Performance Committee. The membership of the Audit Committee is entirely made up of Non Executive Directors. When appropriate, internal control issues also feature at weekly meetings of the Executive Director Team and daily Programme Management Office (PMO) meetings. Controls are also reviewed by the PCT’s internal and external auditors. The PCT is held to account for its performance by the East of England Strategic Health Authority. It also works closely with local authorities (Hertfordshire County Council, East Hertfordshire District Council, North Hertfordshire District Council, St Albans District Council, Three Rivers District Council, Welwyn Hatfield District Council, Broxbourne Borough Council, Dacorum Borough Council, Hertsmere Borough Council, Stevenage Borough Council and Watford Borough Council) and is subject to scrutiny by the Hertfordshire County Council Health Scrutiny Committee which consists of County and District Councillors. The PCT in turn, its primary role being a commissioning organisation, has responsibilities for monitoring levels of standards, compliance and quality achieved by healthcare organisations and independent health practitioners from which it commissions services. 2. The purpose of the system of internal control The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to:  

identify and prioritise the risks to the achievement of the organisation’s policies, aims and objectives, evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. 47

The system of internal control has been in place in Hertfordshire Primary Care Trust for the year ended 31st March 2011 and up to the date of approval of the annual report and accounts. 3. Capacity to handle risk The Chief Executive is the Accountable Officer for risk management within the PCT. Day to day executive responsibility for governance and control is delegated to the Director of Primary Care Development, who is supported by a Head of Corporate Governance who provides organisational capacity to effectively monitor and facilitate risk control within the PCT. Staff are made aware of the key risk-related policies, procedures and protocols at corporate induction and through the weekly news round up which is circulated to all staff and signposts new and updated policies which can be found on the PCT’s website. Learning from the reporting and investigation of adverse incidents, serious incidents requiring investigation, complaints, claims, PALS enquiries and internal and external audit reviews is also a key part of the internal controls on mitigating risk. The Board Assurance Framework, that identifies principal risks to achieving strategic objectives, assurances and controls to mitigate these risks, along with the high level risk register are standing items on the Risk and Assurance Sub Committee agenda and are reported to the Board as per the Board business cycle. The Audit Committee received exception reports from the Risk and Assurance Sub Committee for the purpose of assuring the Board that risks are identified and managed appropriately. The Secretary of State’s Directions 2004 on work to counter fraud and corruption require NHS bodies to appoint a Local Counter Fraud Specialist (LCFS). The overarching body is the NHS Counter Fraud Service (CFS). The PCT employs an LCFS who reports directly to the Director of Finance and Productivity. Hertfordshire PCT is currently participating in the Audit Commission’s National Fraud Initiative validating identified payroll, visa and finance creditor matches, against the PCT’s databases. These checks are in progress. The work plan for 2010/2011 was agreed and completed. In the area of Primary Care Services, prescription penalty notices for falsely claimed exemptions continues to decline. The same penalty system introduced for ophthalmic claimed exemptions is producing some small returns. The LCFS service has also overseen the implementation of the new online expenses system taking into account previous pro-active work. 4. The risk and control framework The PCT’s Risk Management Policy provides details of the Risk Management systems and processes in place. The Risk Management Policy was supported by the Incidents Policy and Procedure, Serious Incidents Requiring Investigation Policy, Information Security Policy, and various other policies relating to Information Governance.

An overview of the PCT’s strategic objectives, associated risks and controls is provided by the “Board Assurance Framework”. A Board Assurance Framework was in place in April 2010. The Framework is a working document and is reviewed by the Risk and Assurance Sub Committee, the Audit Committee and the Board and updated as objectives, risks, controls or required actions change. A revised version was approved by the Executive Team in February 2011 and noted by the Board in March 2011. The version of the Board Assurance Framework in place as at 31st March 2011 identified 8 principal risks relating to the PCT’s 3 strategic objectives. The Board Assurance Framework along with regular performance reports provides a mechanism for the Board to monitor the controls in place and manage the gaps or weaknesses in controls where the PCT is failing to achieve its strategic objectives. The full Assurance Framework can be seen on the PCT’s website by following the link below: http://www.hertfordshire.nhs.uk/images/stories/publications/AssuranceFramework/B AF_2010_-_2011.pdf In addition, as part of the risk and control framework the PCT maintained operational risks registers, with risks rated as “high” being reported to the Risk and Assurance Sub Committee and being subject to review by the Board. The PCT’s Information Governance (IG) Strategy was based on the Department of Health’s guidance and the requirements of the Information Governance toolkit. Data security risks were managed in line with the Information Governance Strategy and the PCT’s risk management policy. The Director of Finance and Productivity was the Senior Information Risk Owner (SIRO) at Board level. The SIRO was also a member of the PCT’s Information Governance Sub Committee (IGSC) and was responsible for the monitoring and management of the Information Governance arrangements. The committee monitored trends in data security incidents with a view to improving security measures to protect personal identifiable data. This was achieved via a regular review of the identified gaps or risks in meeting the Information Governance agenda. Work on meeting the requirements of the IG toolkit has been ongoing throughout the year. The PCT has completed encryption of all PCT owned portable devices that connect to the network as well as port control. Information Governance training was part of the corporate induction. In addition Information Governance e-learning is available to all staff alongside specially tailored Information Governance workshops. In March 2011 the PCT’s assessment against the new version 8 toolkit showed compliance with national standards on 37 out of the 40 standards and all 22 of the key standards for 2010-11. The PCT’s overall rating was 64%.

In 2011 GPs submitted their third Information Governance toolkit submissions with pharmacies submitting their second. Control measures are in place to ensure that all the organisation’s obligations under equality, diversity and human rights legislation are complied with. This includes the implementation of the NHS Equality Delivery System (EDS). The PCT works in collaboration with public stakeholders including Hertfordshire County Council Scrutiny Committee, Hertfordshire Local Involvement Network (LINk), patient and carer forums and local community networks. The organisation, in partnership with other local NHS colleagues, is currently building a network and system for engaging local interests in the development of the Equality Delivery System. This collaborative work ensures that the public are involved with decision making and management of risk that impacts on service provision. As an employer with staff entitled to membership of the NHS Pension scheme, control measures are in place to ensure all employer obligations contained within the Scheme regulations are complied with. This includes ensuring that deductions from salary, employer’s contributions and payments in to the Scheme are in accordance with the Scheme rules, and that member Pension Scheme records are accurately updated in accordance with the timescales detailed in the Regulations. The PCT has undertaken a climate change risk assessment and developed an Adaptation Plan, to support its emergency preparedness and civil contingency requirements, as based on UK Climate Projections 2009 (UKCP09), to ensure that this organisation’s obligations under the Climate Change Act are met. Throughout 2010 -2011 Hertfordshire Primary Care Trust was registered with the Care Quality Committee to provide the following regulated activities: Treatment of Disease, Disorder or Injury, Diagnostic and Screening Procedures, Family Planning Services, Surgical Procedures and Nursing Care. Following the separation of the provider and commissioning arms of the Primary Care Trust and the subsequent establishment of Hertfordshire Community NHS Trust, Hertfordshire Primary Care Trust applied in November 2010 for the removal of the following regulated activities: Family Planning Services, Surgical Procedures and Nursing Care. The Care Quality Commission are currently processing this application. 5. Review of effectiveness As Accountable Officer, I have responsibility for reviewing the effectiveness of the system of internal control. My review is informed in a number of ways. The head of internal audit provides me with an opinion on the overall arrangements for gaining assurance through the Assurance Framework and on the controls reviewed as part of the internal audit work. Executive managers within the organisation who have responsibility for the development and maintenance of the system of internal control provide me with assurance. The Assurance Framework itself provides me with evidence that the effectiveness of controls that managed the risks to the organisation achieving its principal objectives have been reviewed. My review is also informed by 

Audit Commission Use of Resources review

 

A risk-based programme of internal audits Care Quality Commission’s monitoring visits

I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the following: 



 



The PCT Board - The Board placed reliance upon the Audit Committee, Finance and Performance Committee and the Risk and Assurance Sub Committee for assurances on the extent to which the system of internal control was sound. The Audit Committee – The Audit Committee’s primary role was to independently oversee the governance and assurance process on behalf of the PCT and to report to the Board on the soundness and effectiveness of the systems in place for risk management and internal control. In order to provide this assurance to the Board, both Internal and External Audit undertook systems based reviews providing an opinion to the committee on the processes and controls in place. The Finance and Performance Committee - The Board needs to ensure focus on key issues underpinning the performance of the organisation, especially ensuring delivery of key strategic initiatives which are linked to delivering financial balance. The Finance and Performance Committee is designed to provide this detailed input and has delegated responsibilities from the Board to include this function. The Risk and Assurance Sub Committee – The Risk and Assurance Sub Committee was responsible for overseeing the identification and management of risks facing the PCT, including the development and monitoring of the PCT’s Assurance Framework. Executive Directors – the Executive Directors met weekly. Risk-related items featured as agenda items for those meetings. All directors have signed and returned Stewardship Statements to me confirming that as far as they are aware, there was no relevant audit information of which the PCT’s auditors were unaware. They have taken all steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the PCT’s auditors were aware of that information. Programme Management Office – The PMO is a meeting that we use to monitor our performance on key areas, test out new ideas and agree next steps on major projects and areas of work. Internal Audit – Internal Audit reviewed the system of internal control and reported their findings to the Audit Committee. This includes specific reports on areas relevant to controls, risk and governance and also a Head of Internal Audit Opinion, which informs this Statement on Internal Control. External Audit – Use of Resources review

A plan to address weaknesses and ensure continuous improvement of the system is in place. 6. Significant Control Issues The Head of Internal Audit Opinion for the period 1st April 2010 – 31st March 2011, states that “Based on the work undertaken in 2010-11, significant assurance can be given that there is a sound system of internal control which is designed to meet the

organisation’s objectives, and that controls are being consistently applied in all the areas reviewed”. The Head of Internal Audit Opinion for 1st April 2010 – 31st March 2011 has not identified any significant issues which require disclosure within the Statement on Internal Control. In 2010-11 the PCT had overspends on Acute Services, including acute services commissioned through the Specialist Commissioning Group covering East of England. These overspends were offset by the freezing of reserves and underspends elsewhere in the PCT, mainly on primary care services and PCT running costs. This enables the PCT to achieve financial balance. There was one personal data related incident reported to the PCT classified as a serious incident. 7. Concluding Statement My review confirms that Hertfordshire Primary Care Trust has a generally sound system of internal control that supports the achievement of its policies, aims and objectives.

Signed: _____________________________ Jane Halpin, Chief Executive Hertfordshire Primary Care Trust (On behalf of the Board)

Date:

8 June 2011

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF DIRECTORS OF HERTFORDSHIRE PRIMARY CARE TRUST I have audited the financial statements of Hertfordshire Primary Care Trust (PCT) for the year ended 31 March 2011 under the Audit Commission Act 1998. 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. These financial statements have been prepared under the accounting policies set out in the Statement of Accounting Policies. I have also audited the information in the Remuneration Report that is subject to audit, being: ■ ■

the table of salaries and allowances of senior managers (Annual Report) the table of pension benefits of senior managers (Annual Report)

This report is made solely to the Board of Directors of Hertfordshire PCT in accordance with Part II of the Audit Commission Act 1998 and for no other purpose, as set out in paragraph 45 of the Statement of Responsibilities of Auditors and Audited Bodies published by the Audit Commission in March 2010. Respective responsibilities of Directors and auditor As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. My responsibility is to audit the accounting statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require me to comply with the Auditing Practice’s Board’s Ethical Standards for Auditors. Scope of the audit of the financial statements An 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 PCT’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the PCT; and the overall presentation of the financial statements. I read all the information in the annual report to identify material inconsistencies with the audited financial statements. If I become aware of any apparent material misstatements or inconsistencies I consider the implications for my report. In addition, I am required to obtain evidence sufficient to give reasonable assurance that the expenditure and income reported in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

Opinion on regularity In my opinion, in all material respects the expenditure and income have been applied to the purposes intended by parliament and the financial transactions conform to the authorities which govern them. Opinion on financial statements In my opinion the financial statements: ■ ■

give a true and fair view of the state of Hertfordshire PCT’s affairs as at 31 March 2011 and of its net operating costs for the year then ended; and have been properly prepared in accordance with the accounting policies directed by the Secretary of State with the consent of the Treasury as relevant to the National Health Service in England.

Opinion on other matters In my opinion: ■

■

the part of the Remuneration Report subject to audit has been properly prepared in accordance with the accounting policies directed by the Secretary of State with the consent of the Treasury as relevant to the National Health Service in England; and the information given in the annual report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which I report by exception I have nothing to report in respect of the Statement on Internal Control on which I report to you if, in my opinion the Statement on Internal Control does not reflect compliance with the Department of Health’s requirements. Conclusion on the PCT’s arrangements for securing economy, efficiency and effectiveness in the use of resources PCT’s responsibilities The PCT is responsible for putting in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources, to ensure proper stewardship and governance, and to review regularly the adequacy and effectiveness of these arrangements. Auditor’s responsibilities I am required under Section 5 of the Audit Commission Act 1998 to satisfy myself that the PCT has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the Audit Commission requires me to report to you my conclusion relating to proper arrangements, having regard to relevant criteria specified by the Audit Commission. I report if significant matters have come to my attention which prevent me from concluding that the PCT has put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources. I am not required to consider, nor have I considered, whether all aspects of the PCT’s arrangements for

securing economy, efficiency and effectiveness in its use of resources are operating effectively. Basis of conclusion I have undertaken my audit in accordance with the Code of Audit Practice, having regard to the guidance on the specified criteria, published by the Audit Commission in October 2010, as to whether the PCT has proper arrangements for: â&#x2013; â&#x2013;

securing financial resilience; and challenging how it secures economy, efficiency and effectiveness.

The Audit Commission has determined these two criteria as those necessary for me to consider under the Code of Audit Practice in satisfying myself whether the PCT put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2011. I planned my work in accordance with the Code of Audit Practice. Based on my risk assessment, I undertook such work as I considered necessary to form a view on whether, in all significant respects, the PCT had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources. Conclusion On the basis of my work, having regard to the guidance on the specified criteria published by the Audit Commission in October 2010, I am satisfied that, in all significant respects, Hertfordshire PCT put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2011. Certificate I certify that I have completed the audit of the accounts of Hertfordshire PCT in accordance with the requirements of the Audit Commission Act 1998 and the Code of Audit Practice issued by the Audit Commission.

Mark Hodgson Engagement Lead

Date: 9 June 2011

Audit Commission, 3rd Floor, Eastbrook, Shaftesbury Road, Cambridge, CB2 8BF

THE ACCOUNTS Statement of Comprehensive Net Expenditure for year ended 31 March 2011

NOTE

2010-11 ÂŁ000

2009-10 ÂŁ000

Commissioning Employee benefits Other costs Income

7.1 5.1 4

22,439 1,733,052 (41,873)

23,026 1,509,507 (24,964)

Provider Employee benefits Other costs Income

7.1 3.3 3.3

0 0 0

94,108 34,405 (17,556)

1,713,618

1,618,526

(3) 19 1,248 1,714,882

(1) (11) 1,259 1,619,773

(4,461) 0 0 0 0 0 55 0

(767) 0 0 0 0 2,471 54 (124)

4,956

1,710,476

1,626,363

PCT net operating costs before interest Investment income Other (Gains)/Losses Finance costs Net operating costs for the financial year

9 10 11

Other Comprehensive Net Expenditure Net (gain) on revaluation of property, plant and equipment Net (gain) on revaluation of intangibles Net (gain) on revaluation of available for sale financial assets Receipt of donated or government granted assets (Gain)/loss on other reserves Impairments and reversals Transfers from donated and government grant reserves Adjustment for nominal cost of capital charge Transfers (to)/from other bodies within the Resource Account Boundary Net actuarial (gain)/loss on pension1 Total comprehensive net expenditure for the year The notes on pages 62 to 117 form part of this account. 1

Disclosed separately for the first time in 2010-11

Statement of Financial Position as at 31 March 2011 31 March 2011 ÂŁ000

31 March 2010 ÂŁ000

12 13 30 17.1

101,236 960 439 1,612 104,247

93,343 487 439 1,707 95,976

16 17.1 30 31 32

561 25,231 0 0 0 25,792 0

591 12,440 0 0 0 13,031 0

25,792

13,031

130,039

109,007

NOTE Non-current assets: Property, plant and equipment Intangible assets Other financial assets Trade and other receivables Total non-current assets Current assets: Inventories Trade and other receivables Other financial assets Other current assets Cash and cash equivalents Non-current assets held for sale

Total current assets Total assets Current liabilities Trade and other payables

(116,038)

(99,481)

Other liabilities

Provisions

(556)

(940)

Borrowings

(929)

(944)

Other financial liabilities

(117,523)

(101,365)

12,516

7,642

0 (4,833) (7,614) 0 0

0 (4,810) (8,263) 0 0

(12,447) 69

(13,073) (5,431)

Total current liabilities Non-current assets plus/less net current assets/liabilities Non-current liabilities Trade and other payables Provisions Borrowings Other financial liabilities Other liabilities Total non-current liabilities Total Assets Employed:

18 21 19 24 20

FINANCED BY: TAXPAYERS' EQUITY NOTE General fund Revaluation reserve Donated asset reserve Government grant reserve Other reserves Total taxpayer equity

31 March 2011 ÂŁ000 (23,590) 21,961 1,698 0 0 69

31 March 2010 ÂŁ000 (24,684) 17,585 1,668 0 0 (5,431)

The notes on pages 62 to 117 form part of this account. The financial statements on pages 56 to 60 were approved by the Board on 8 June 2011 and signed on its behalf by

Dr Jane Halpin Chief Executive

Date: 8 June 2011

STATEMENT OF CHANGES IN TAXPAYERS' EQUITY For the year ended 31 March 2010

Balance at 1 April 2009 Changes in taxpayers’ equity for 2009-10 Net operating cost for the year Net gain on revaluation of property, plant, equipment Net gain on revaluation of intangible assets Net gain on revaluation of financial assets Receipt of donated or government granted assets Movements in other reserves Impairments and reversals Release of reserves to SoCNE Non-cash charges – cost of capital Transfers between reserves Transfers to/(from) other bodies within the Resource Account boundary Total recognised income and expense for 2009-10 Net Parliamentary funding Balance at 31 March 2010

General fund

Revaluation reserve

£000

(10,135)

Donated Govt. asset grant reserve reserve £000 £000

19,390

1,621

767 0 0

0 0

Other reserves

Total reserves

£000

£000 0

10,876

(1,619,773) 767 0 0 0 0 (2,471) (54) 124 0 (4,956)

(1,619,773)

124 0 (4,956) (1,624,605) 1,610,056 (24,684)

(2,572) 0

101 (54)

0 0

(1,805)

17,585

1,668

(1,626,363) 1,610,056 (5,431)

STATEMENT OF CHANGES IN TAXPAYERS' EQUITY For the year ended 31 March 2011 General fund Changes in taxpayers’ equity for 2010-11 Balance at 1 April 2010 Net operating cost for the year Net gain on revaluation of property, plant, equipment Net gain on revaluation of intangible assets Net gain on revaluation of financial assets Receipt of donated or government granted assets Movements in other reserves Impairments and reversals Release of reserves to SoCNE Non-cash charges – cost of capital Transfers between reserves Transfers to/(from) other bodies within the Resource Account Boundary Net actuarial gain/(loss) on pension Total recognised income and expense for 2010-11 Net Parliamentary funding Balance at 31 March 2011

Revaluation reserve

£000 (24,684) (1,714,882)

£000 17,585 4,376 0 0

0 0 0 0 (1,714,882) 1,715,976 (23,590)

Donated asset reserve £000 1,668

Govt. grant reserve £000

Other reserves £000 0

85 0

0 0

0 (55)

0 0

4,376

21,961

1,698

Total reserves

£000 (5,431) 0 (1,714,882) 4,461 0 0 0 0 0 0 (55) 0 0 0 0 0 0 0 (1,710,476) 1,715,976 0 69

Statement of Cash Flows for the Year ended 31 March 2011 NOTE Cashflow from operating activities Net operating cost before interest Other cash flow adjustments Movements in Working Capital Provisions utilised Interest paid Net cash outflow from operating activities Cash flows from investing activities Payments to purchase property, plant and equipment Payments to purchase intangible assets Proceeds of disposal of assets held for sale Purchase of financial investments (LIFT) Sale of financial investments (LIFT) Loans made in respect of LIFT Loans repaid in respect of LIFT Payments for other financial assets Proceeds from disposal of other financial assets Interest received Rental Revenue Net cash inflow/(outflow) from investing activities Net cash inflow/(outflow) before financing Cash flows from financing activities Net Parliamentary Funding Other capital receipts surrendered Capital grants received Capital element of payments in respect of finance leases, on-SoFP PFI and LIFT Cash transfers (to)/from other NHS bodies Net cash inflow/(outflow) from financing Net increase/(decrease) in cash and cash equivalents Cash (and) cash equivalents (and bank overdrafts) at the beginning of the financial year Effect of exchange rate changes on the balance of cash held in foreign currencies Cash (and) cash equivalents (and bank overdrafts) at the end of the financial year The notes on pages 62 to 117 form part of this account.

39 38 21

2009-10 ÂŁ000

2010-11 ÂŁ000

(1,713,618) (1,618,526) 6,473 4,008 14,275 5,077 (716) (514) (1,259) (1,264) (1,706,311) (1,599,753)

(8,771) (8,399) (487) (602) 0 0 0 0 0 0 (411) 0 0 0 0 0 0 0 0 0 0 0 (9,669) (9,001) (1,715,312) (1,609,422)

1,715,976 0 0

1,610,056 0 0

(664) 0 1,715,312

(634) 0 1,609,422

NOTES TO THE ACCOUNTS 1. Accounting policies The Secretary of State for Health has directed that the financial statements of PCTs shall meet the accounting requirements of the PCT Manual for Accounts, which shall be agreed with HM Treasury. Consequently, the following financial statements have been prepared in accordance with the 2010-11 PCTs Manual for Accounts issued by the Department of Health. The accounting policies contained in that manual follow International Financial Reporting Standards (IFRS) to the extent that they are meaningful and appropriate to the NHS, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the PCT 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 PCT for the purpose of giving a true and fair view has been selected. The particular policies adopted by the PCT are described below. They have been applied consistently in dealing with items considered material in relation to the accounts. The PCT is within the Government Resource Accounting Boundary and therefore has only consolidated interests in other entities where the other entity is also within the resource accounting boundary and the PCT exercises in-year budgetary control over the other entity. For 2009-10 and 2010-11, in accordance with the directed accounting policy from the Secretary of State, the PCT does not consolidate the NHS charitable funds for which it is the corporate trustee. 1.1 Accounting Conventions These 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 Acquisitions and Discontinued Operations Activities are considered to be 'acquired' only if they are acquired from outside the public sector. Activities are considered to be 'discontinued' only if they cease entirely. They are not considered to be 'discontinued' if they transfer from one NHS body to another. On the 1st April 2010 East & North Hertfordshire and West Hertfordshire Primary Care Trust merged to create NHS Hertfordshire Primary Care Trust. Although the Primary Care Trust had no discontinued activities, however from the 1st November 2010 it transferred its Provider Services Operations to the newly created Hertfordshire Community Trust Critical accounting judgements and key sources of estimation uncertainty In the application of the PCTâ&#x20AC;&#x2122;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. 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. Critical judgements in applying accounting policies The following are the critical judgements, apart from those involving estimations (see below) that management has made in the process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements. Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the Statement of Financial Position date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year Prescription Services Hertfordshire PCT receives financial information from NHS Prescription Services who process prescription items to reimburse and remunerate pharmacy contractors. In addition they supply the PCT with information relating to the cost of drugs prescribed by Independent GP’s, PCT run Practices and other PCT Services. Information is available 2 months in arrears and therefore the PCT must estimate February and March costs using the PPA estimated cumulative profile to provide the total expenditure in the year. The estimate for 2010-11 was £27,894,000 and was based on information provided by NHS Business Services Authority, and included in Trade and Other Payables. The Quality and Outcomes Framework (QOF) The Quality and Outcomes Framework (QOF) is a voluntary annual reward and incentive programme for all GP surgeries in England, detailing practice achievement results. There are two elements to the payment made to GP’s. The Aspiration element, this is an upfront payment, paid in equal instalments during the financial year, based on 70% of previous years total payment and is paid as an incentive for practices to adhere to QOF. The second element is Achievement.’ This payment is the difference between what the practices actually achieve and the payment already made through the Aspiration element. The qualifying period for QOF runs 1st April to 31st March. As a consequence of this time period final QOF information is not known until May/June of the following financial year. For the purposes of Annual Accounts the estimate for projected QOF outturn for 2010-11 was £7,874,000. The difference between the projected outturn and the payments made in year are included in Trade and Other Payables. Dental Services The PCT receives financial information from NHS Dental Services who process FP17s and remunerate dental contractors. Each dental contractor has a contract to perform a certain amount of activity (Units of Dental Activity (UDAs)) at an agreed price per UDA. The dental contractors are then paid 1/12 of the total contract value each month. As actual year end activity information will not be known until mid June, estimations of performance have been calculated. If dental practices under perform

against their activity target the practice will be asked to either make up the under performance in the following financial year or repay the PCT. The estimated value of underperformance treated as a prepayment (dentists make up the under performance in the following financial year) is £253,000. The estimated value of the underperformance to be repaid is £343,000 (cf 2090-10 £1,460,000). This reduction in the amount to be repaid arises because as a result of last year's performance a number of breach notices were served and contracts reduced (by agreement with contractors) to more realistic levels. This year's underperformance is therefore likely to be less significant and less prone to same level of uncertainty. These amounts are included in accruals and prepayments. In addition to prepayments, the PCT also has estimated the level of patient charge revenue that has not been credited to the PCT's cash limit by 31st March. This estimate of £1,380,000 is based on receipts for the year to date adjusted for the average time lag in the reporting of dental activity for the PCT. Secondary Healthcare Secondary care activity reports are received from providers monthly, but activity information for the final month of the year is not available in time for the accounts and estimates are made in agreement with providers. A full reconciliation is undertaken once actual activity is agreed which is at the end of the first quarter of the following year. Any increase or decrease in activity (if any) becomes a charge or credit in the next financial year. Historically, when these estimates have been compared to the subsequent actual data, they have not been materially different. Estimation techniques are used to ensure that the correct levels of income and expenditure due relating to current year are included through the inclusion of accruals established based on known commitments and local knowledge. Merger Accounting West Hertfordshire Primary Care Trust transferred their Provider Services operations to East & North Hertfordshire Primary Care Trust on 1st November 2009. On 1st April 2010 the two Primary Care Trusts merged to create Hertfordshire Primary Care Trust. Finally on the 1st November 2010 the Primary Care Trust transferred its Provider Services Operations to the newly created Hertfordshire Community NHS Trust. Transfer of Function Under the Treasury Financial Reporting Manual (FReM) “the combinations of two or more public sector bodies into one new body or the transfer of function from the responsibility of one part of the pubic sector to another will be accounted for using merger accounting …” This means that the receiving body (Hertfordshire Community NHS Trust) will account for the whole years activity, even though the actual date of transfer was 1st November 2010. For the purpose of these accounts the PCT has removed all transactions relating to the transfer of function. This spend is shown on one line note 5.1 “Goods and Services from Other NHS Bodies other than FTs”

Comparatives NHS Hertfordshire has given careful consideration to its responsibilities under IAS 1 to disclose comparative information for the transferring functions. However due to the late issue of guidance from the Department of Heath and the subsequent time scale constraints, the Primary Care Trust considers a restatement to be impractical in order to achieve reliable information for the reader of these accounts. Therefore, the Trust has restated comparators for the combining function and has restated its opening balance sheet in relation of the transferred function as at 31/3/2010. 1.2 Revenue and Funding The main source of funding for the Primary Care Trust is allocations (Parliamentary Funding) from the Department of Health within an approved cash limit, which is credited to the General Fund of the Primary Care Trust. Parliamentary funding is recognised in the financial period in which the cash is received. Miscellaneous revenue is income which relates directly to the operating activities of the Primary Care Trust. It principally comprises fees and charges for services provided on a full cost basis to external customers, as well as public repayment work. It includes both income appropriated-in-aid of the Vote and income to the Consolidated Fund which HM Treasury has agreed should be treated as operating income. Revenue 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 revenue has been received for a specific activity to be delivered in the following financial year, that income will be deferred. 1.3 Pooled budgets The PCT has entered into a pooled budget with Hertfordshire County Council. Under the arrangement funds are pooled under S75 of the NHS Act 2006 for Mental Health, Learning Disabilities and certain other services. The pool is hosted by Hertfordshire County Council. The PCT makes contributions to the pool for services to be provided as part of its commissioning role. In accordance with IAS31, the PCT's share of the assets and liabilities of the pool will be accounted for in the books of accounts as determined in the pooled budget agreement. 1.4 Taxation The PCT is not liable to pay corporation tax. Expenditure is shown net of recoverable VAT. Irrecoverable VAT is charged to the most appropriate expenditure heading or capitalised if it relates to an asset. 1.5 Capital Charges It should be noted that in a change from previous years the PCT is no longer required to reflect the cost of capital utilised by the PCT within its operating cost. As a consequence of this change, it has also been necessary to adjust the PCT Revenue Resource Limits, such that the outturn against the RRL remains unaffected and returns the same performance outturn for the year as would have been reported without the amendment.

1.6 Property, Plant and Equipment Recognition Property, plant and equipment is capitalised if:  it is held for use in delivering services or for administrative purposes;  it is probable that future economic benefits will flow to, or service potential will be supplied to, the PCT;  it is expected to be used for more than one financial year;  the cost of the item can be measured reliably; and  the item has cost of at least £5,000; or  Collectively, a number of items have a cost of at least £5,000 and individually have a cost of more than £250, where the assets are functionally interdependent, they had broadly simultaneous purchase dates, are anticipated to have simultaneous disposal dates and are under single managerial control; or  Items form part of the initial equipping and setting-up cost of a new building, ward or unit, irrespective of their individual or collective cost. Where a large asset, for example a building, includes a number of components with significantly different asset lives, the components are treated as separate assets and depreciated over their own useful economic lives. Valuation All property, plant and equipment are measured initially at cost, representing the cost directly attributable to acquiring or constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner intended by management. All assets are measured subsequently at fair value. Land and buildings used for the PCT's services or for administrative purposes are stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation less any subsequent accumulated depreciation and impairment losses. Revaluations are performed with sufficient regularity to ensure that carrying amounts are not materially different from those that would be determined at the end of the reporting period. Fair values are determined as follows:  

Land and non-specialised buildings – market value for existing use Specialised buildings – depreciated replacement cost

Until 31 March 2008, the depreciated replacement cost of specialised buildings has been estimated for an exact replacement of the asset in its present location. HM Treasury has adopted a standard approach to depreciated replacement cost valuations based on modern equivalent assets and, where it would meet the location requirements of the service being provided, an alternative site can be valued. In view of this change in approach, NHS Hertfordshire Primary Care Trust instructed Boshier & Company an independent firm of chartered surveyors (RICS), to provide advice in accordance with IAS 16 in respect of various freehold properties forming part of the PCT's estate as at 31 March 2010. From the 1st April 2010 the PCT used the services of Boshier & Company (Chartered Surveyors) to research land values locally (Hertfordshire) over the previous 12 months. A change in valuation of 5.0% totalling £1,790,000 was applied as at 31st 66

March 2011. For buildings, the advice of our Surveyors is to use BCIS (Building Cost Information Services) RICS indices. According to these indices building values increased by ÂŁ2,671,000 an 5.3% increase and was applied for the year ending 31st March 2011. This is a long and established indices which was used by the DOH for many years and are industry recognised Properties in the course of construction for service or administration purposes are carried at cost, less any impairment loss. Cost includes professional fees but not borrowing costs, which are recognised as expenses immediately, as allowed by IAS 23 for assets held at fair value. Assets are revalued and depreciation commences when they are brought into use. Until 31 March 2008, fixtures and equipment were carried at replacement cost, as assessed by indexation and depreciation of historic cost. From 1 April 2008 indexation has ceased. The carrying value of existing assets at that date will be written off over their remaining useful lives and new fixtures and equipment are carried at depreciated historic cost as this is not considered to be materially different from fair value. An increase arising on revaluation is taken to the revaluation reserve except when it reverses an impairment for the same asset previously recognised in expenditure, in which case it is credited to expenditure to the extent of the decrease previously charged there. A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Impairment losses that arise from a clear consumption of economic benefit should be taken to expenditure. This is a change in accounting policy from previous years where all impairments were taken to the revaluation reserve to the extent that a balance was held for that asset and thereafter to expenditure. Gains and losses recognised in the revaluation reserve are reported as other comprehensive net expenditure in the Statement of Comprehensive Net Expenditure Subsequent expenditure Where subsequent expenditure enhances an asset beyond its original specification, the directly attributable cost is capitalised. Where subsequent expenditure restores the asset to its original specification, the expenditure is capitalised and any existing carrying value of the item replaced is written-out and charged to operating expenses. 1.7 Intangible Assets Recognition Intangible assets are non-monetary assets without physical substance, which are capable of sale separately from the rest of the PCTâ&#x20AC;&#x2122;s business or which arise from contractual or other legal rights. They are recognised only when it is probable that future economic benefits will flow to, or service potential be provided to, the PCT; where the cost of the asset can be measured reliably, and where the cost is at least ÂŁ5,000.

Intangible assets acquired separately are initially recognised at fair value. Software that is integral to the operating of hardware, for example an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software that is not integral to the operation of hardware, for example application software, is capitalised as an intangible asset. Expenditure on research is not capitalised: it is recognised as an operating expense in the period in which it is incurred. Internallygenerated assets are recognised if, and only if, all of the following have been demonstrated:      

the technical feasibility of completing the intangible asset so that it will be available for use the intention to complete the intangible asset and use it the ability to sell or use the intangible asset how the intangible asset will generate probable future economic benefits or service potential the availability of adequate technical, financial and other resources to complete the intangible asset and sell or use it the ability to measure reliably the expenditure attributable to the intangible asset during its development.

Measurement The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the criteria above are initially met. Where no internally-generated intangible asset can be recognised, the expenditure is recognised in the period in which it is incurred. Following initial recognition, intangible assets are carried at fair value by reference to an active market, or, where no active market exists, at amortised replacement cost (modern equivalent assets basis), indexed for relevant price increases, as a proxy for fair value. Internally-developed software is held at amortized historic cost to reflect the opposing effects of increases in development costs and technological advances. 1.8 Depreciation, amortisation and impairments Freehold land, properties under construction and assets held for sale are not depreciated. Otherwise, depreciation and amortisation are charged to write off the costs or valuation of property, plant and equipment and intangible non-current assets, less any residual value, over their estimated useful lives, in a manner that reflects the consumption of economic benefits or service potential of the assets. The estimated useful life of an asset is the period over which the PCT expects to obtain economic benefits or service potential from the asset. This is specific to the PCT and may be shorter than the physical life of the asset itself. Estimated useful lives and residual values are reviewed each year end, with the effect of any changes recognised on a prospective basis. Assets held under finance leases are depreciated over their estimated useful lives At each reporting period end, the PCT checks whether there is any indication that any of its tangible or intangible non-current assets have suffered an impairment loss. If there is indication of an impairment loss, the recoverable amount of the asset is 68

estimated to determine whether there has been a loss and, if so, its amount. Intangible assets not yet available for use are tested for impairment annually. A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Impairment losses that arise from a clear consumption of economic benefit should be taken to expenditure. This is a change in accounting policy from previous years where all impairments were taken to the revaluation reserve to the extent that a balance was held for that asset and thereafter to expenditure. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of the recoverable amount but capped at the amount that would have been determined had there been no initial impairment loss. The reversal of the impairment loss is credited to expenditure to the extent of the decrease previously charged there and thereafter to the revaluation reserve. 1.9 Donated assets Donated non-current assets are capitalised at their fair value on receipt, with a matching credit to the donated asset reserve. They are valued, depreciated and impaired as described above for purchased assets. Gains and losses on revaluations and impairments are taken to the donated asset reserve and, each year, an amount equal to the depreciation charge on the asset is released from the donated asset reserve to offset the expenditure. On sale of donated assets, the net book value is transferred from the donated asset reserve to retained earnings. 1.10 Government grants Government grants are grants from government bodies other than revenue from NHS bodies for the provision of services. Revenue grants are treated as deferred income initially and credited to income to match the expenditure to which they relate. Capital grants are credited to the government grant reserve and released to operating revenue over the life of the asset in a manner consistent with the depreciation and impairment charges for that asset. Assets purchased from government grants are valued, depreciated and impaired as described above for purchased assets. Gains and losses on revaluations and impairments are taken to the government grant reserve and, each year, an amount equal to the depreciation charge on the asset is released from the government grant reserve to the offset the expenditure. 1.11 Non-current assets held for sale Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met when the sale is highly probable, the asset is available for immediate sale in its present condition and management is committed to the sale, which is expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Fair value is open market value including alternative uses. The profit or loss arising on disposal of an asset is the difference between the sale proceeds and the carrying amount and is recognised in the Statement of Comprehensive Net Expenditure. On disposal, the balance for the asset on the

revaluation reserve is transferred to retained earnings. For donated and governmentgranted assets, a transfer is made to or from the relevant reserve to the profit/loss on disposal account so that no profit or loss is recognised in income or expenses. The remaining surplus or deficit in the donated asset or government grant reserve is then transferred to the General Fund. Property, plant and equipment that is to be scrapped or demolished does not qualify for recognition as held for sale. Instead, it is retained as an operational asset and its economic life is adjusted. The asset is de-recognised when it is scrapped or demolished. 1.12 Inventories Inventories are valued at the lower of cost and net realisable value. 1.13 Cash and cash equivalents Cash 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 PCTâ&#x20AC;&#x2122;s cash management. 1.14 Losses and Special Payments Losses 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 each individual case is handled. Losses and special payments are charged to the relevant functional headings including losses which would have been made good through insurance cover had PCTs not been bearing their own risks (with insurance premiums then being included as normal revenue expenditure). 1.15 Clinical Negligence Costs From 1 April 2000, the NHS Litigation Authority (NHSLA) took over the full financial responsibility for all Existing Liabilities Scheme (ELS) cases unsettled at that date and from 1 April 2002 all Clinical Negligence Scheme for Trusts (CNST) cases. Provisions for these are included in the accounts of the NHSLA. Although the NHSLA is administratively responsible for all cases from 1 April 2000, the legal liability remains with the PCTs. The NHSLA operates a risk pooling scheme under which the PCT pays an annual contribution to the NHSLA which in return settles all clinical negligence claims. The contribution is charged to expenditure in the year that it is due. Although the NHSLA is administratively responsible for all clinical negligence cases the legal liability

remains with the PCT. The total value of clinical negligence provisions carried by the NHSLA on behalf of the PCT is disclosed at Note 21. 1.16 Employee benefits Short-term employee benefits Salaries, wages and employment-related payments are recognised in the period in which the service is received from employees. The cost of leave earned but not taken by employees at the end of the period is recognised in the financial statements to the extent that employees are permitted to carry forward leave into the following period. Retirement benefit costs Past 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 NHS body 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 PCT commits itself to the retirement, regardless of the method of payment. 1.17 Research and Development Research and development expenditure is charged against income in the year in which it is incurred, except insofar as development expenditure relates to a clearly defined project and the benefits of it can reasonably be regarded as assured. Expenditure so deferred is limited to the value of future benefits expected and is amortised through the Statement of Comprehensive Net Expenditure on a systematic basis over the period expected to benefit from the project. It should be revalued on the basis of current cost. The amortisation is calculated on the same basis as depreciation, on a quarterly basis. 1.18 Other expenses Other 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. 1.19 Grant making Under section 256 of the National Health Service Act 2006, the PCT has the power to make grants to local authorities, voluntary bodies and registered social landlords to finance capital or revenue schemes. A liability in respect of these grants is recognised when the PCT has a present legal or constructive obligation which occurs when all of the conditions attached to the payment have been met.

1.20 EU Emissions Trading Scheme EU Emission Trading Scheme allowances are accounted for as government grant funded intangible assets if they are not expected to be realised within twelve months, and otherwise as other current assets. They are valued at open market value. As the NHS body makes emissions, a provision is recognised with an offsetting transfer from the government grant reserve. The provision is settled on surrender of the allowances. The asset, provision and government grant reserve are valued at fair value at the end of the reporting period. 1.21 Contingencies A 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 PCT, 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 trust. 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. 1.22 Leases Leases 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. The PCT as lessee Property, 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 PCTâ&#x20AC;&#x2122;s net operating cost. 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. This is a change in accounting policy from previous years where leased land was always treated as an operating lease. The PCT as lessor Amounts due from lessees under finance leases are recorded as receivables at the amount of the PCTâ&#x20AC;&#x2122;s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the PCTâ&#x20AC;&#x2122;s net investment outstanding in respect of the leases. Rental income from operating leases is recognised on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. 1.23 Provisions Provisions are recognised when the PCT has a present legal or constructive obligation as a result of a past event, it is probable that the PCT 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 Treasuryâ&#x20AC;&#x2122;s discount rate of 2.2% in real terms. 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. Present obligations arising under onerous contracts are recognised and measured as a provision. An onerous contract is considered to exist where the PCT has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. A restructuring provision is recognised when the PCT has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with ongoing activities of the entity. 1.24 Financial Instruments Financial assets Financial assets are recognised when the PCT 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 initially recognised at fair value. 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. Financial assets at fair value through profit and loss Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial assets at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in the Statement of Comprehensive Net Expenditure. The net gain or loss incorporates any interest earned on the financial asset. Held to maturity investments Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity, and there is a positive intention and ability to hold to maturity. After initial recognition, they are held at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method. Available for sale financial assets Available for sale financial assets are non-derivative financial assets that are designated as available for sale or that do not fall within any of the other three financial asset classifications. They are measured at fair value with changes in value taken to the revaluation reserve, with the exception of impairment losses. Accumulated gains or losses are recycled to the Statement of Comprehensive Net Expenditure on de-recognition. Loans and receivables Loans 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 Statement of Financial Position date, the PCT 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 the Statement of Comprehensive Net Expenditure and the carrying amount of the asset is reduced directly, or 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 the Statement of Comprehensive Net 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. Financial liabilities Financial liabilities are recognised on the Statement of Financial Position when the PCT 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 derecognised when the liability has been discharged, that is, the liability has been paid or has expired. Financial liabilities are initially recognised at fair value. Financial liabilities are classified as either financial liabilities ‘at fair value through profit and loss’ or other financial liabilities. Financial liabilities at fair value through profit and loss Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial liabilities at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in the Statement of Comprehensive Net Expenditure. The net gain or loss incorporates any interest earned on the financial asset. Other financial liabilities After initial recognition, all other financial liabilities are measured at amortised cost using the effective interest method. 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. 1.25 Private Finance Initiative (PFI) and NHS LIFT transactions HM Treasury has determined that government bodies shall account for infrastructure PFI schemes (including NHS LIFT) where the government body controls the use of the infrastructure and the residual interest in the infrastructure at the end of the arrangement as service concession arrangements, following the principles of the requirements of IFRIC 12. The PCT therefore recognises the PFI asset as an item of property, plant and equipment together with a liability to pay for it. The services received under the contract are recorded as operating expenses.

The annual unitary payment is separated into the following component parts, using appropriate estimation techniques where necessary: a) Payment for the fair value of services received; b) Payment for the PFI asset, including finance costs; and c) Payment for the replacement of components of the asset during the contract ‘lifecycle replacement’. a) Services received The fair value of services received in the year is recorded under the relevant expenditure headings within ‘operating expenses’. b) PFI and LIFT assets, liabilities, and finance costs The PFI assets are recognised as property, plant and equipment, when they come into use. The assets are measured initially at fair value in accordance with the principles of IAS 17. Subsequently, the assets are measured at fair value, which is kept up to date in accordance with the PCT’s approach for each relevant class of asset in accordance with the principles of IAS 16. LIFT assets are recognised as property, plant and equipment, when they come into use. The assets are measured initially at fair value in accordance with the principles of IAS 17. Subsequently, the assets are measured at fair value, which is kept up to date in accordance with the PCT’s approach for each relevant class of asset in accordance with the principles of IAS 16." A PFI liability is recognised at the same time as the PFI assets are recognised. It is measured initially at the same amount as the fair value of the PFI assets and is subsequently measured as a finance lease liability in accordance with IAS 17. A LIFT liability is recognised at the same time as the PFI assets are recognised. It is measured initially at the same amount as the fair value of the PFI assets and is subsequently measured as a finance lease liability in accordance with IAS 17. An annual finance cost is calculated by applying the implicit interest rate in the lease to the opening lease liability for the period, and is charged to ‘Finance Costs’ within the Statement of Comprehensive Net Expenditure. The element of the annual unitary payment that is allocated as a finance lease rental is applied to meet the annual finance cost and to repay the lease liability over the contract term. An element of the annual unitary payment increase due to cumulative indexation is allocated to the finance lease. In accordance with IAS 17, this amount is not included in the minimum lease payments, but is instead treated as contingent rent and is expensed as incurred. In substance, this amount is a finance cost in respect of the liability and the expense is presented as a contingent finance cost in the Statement of Comprehensive Net Expenditure. c) Lifecycle replacement Components of the asset replaced by the operator during the contract (‘lifecycle replacement’) are capitalised where they meet the PCT’s criteria for capital

expenditure. They are capitalised at the time they are provided by the operator and are measured initially at their fair value. The element of the annual unitary payment allocated to lifecycle replacement is predetermined for each year of the contract from the operator’s planned programme of lifecycle replacement. Where the lifecycle component is provided earlier or later than expected, a short-term finance lease liability or prepayment is recognised respectively. Where the fair value of the lifecycle component is less than the amount determined in the contract, the difference is recognised as an expense when the replacement is provided. If the fair value is greater than the amount determined in the contract, the difference is treated as a ‘free’ asset and a deferred income balance is recognised. The deferred income is released to the operating income over the shorter of the remaining contract period or the useful economic life of the replacement component. Assets contributed by the PCT to the operator for use in the scheme Assets contributed for use in the scheme continue to be recognised as items of property, plant and equipment in the PCT’s Statement of Comprehensive Net Expenditure. Other assets contributed by the PCT to the operator Assets contributed (e.g. cash payments, surplus property) by the PCT to the operator before the asset is brought into use, which are intended to defray the operator’s capital costs, are recognised initially as prepayments during the construction phase of the contract. Subsequently, when the asset is made available to the PCT, the prepayment is treated as an initial payment towards the finance lease liability and is set against the carrying value of the liability. 1.26 Going Concern The PCT is funded by the Department of Health and therefore remains a going concern. 2. Operating Segments It has been widely considered that PCTs will have a minimum of two operational segments covering their core activities; Commissioning and Provider functions. However on the 1st November 2010 Hertfordshire Primary Care Trust transferred its Provider Services operations to the newly created Hertfordshire Community NHS Trust. Under the Treasury Financial Reporting Manual (FReM), “the transfer of function from the responsibility of one part of the pubic sector to another will be accounted for using merger accounting …”. This means that the receiving body (Hertfordshire Community Trust) will account for the whole year's activity, whatever the actual date of transfer. For the purpose of these accounts the PCT has removed all transactions relating to the transferred function and has accounted for the spend as the purchase of healthcare services.

3. Financial Performance Targets 3.1 Revenue Resource Limit The PCTs' performance for the year ended 31 March 2011 is as follows: Total Net Operating Cost for the Financial Year Non-Discretionary Expenditure1 Net Operating Cost less Non Discretionary Expenditure Revenue Resource Limit Under/(Over)spend Against Revenue Resource Limit (RRL) 1

2010-11

2009-10

£000

£000 1,619,773 10,724 1,609,049 1,610,660 1,611

1,714,882 1,714,882 1,715,520 638

In 2010-11, due to changes in the way PCTs are funded, there is no non-discretionary expenditure

3.2 Capital Resource Limit

2009-10 £000

2010-11 £000

The PCT is required to keep within its Capital Resource Limit. Total Gross Capital Expenditure Loss in Respect of Disposals of Donated Assets less: Net Book Value of Non-Current Assets Disposed of to NHS Bodies less: Net Book Value of Non-Current Assets Disposed of to non-NHS Bodies less: Net Book Value of Financial Instruments (Investments) Disposed Of to NHS bodies less: Net Book Value of Financial Instruments (Investments) Disposed Of to Non-NHS bodies less: Capital Grants Received less: Donations Charge Against the Capital Resource Limit (CRL) Capital Resource Limit (CRL) (Over)/Underspend Against CRL

3.3 Provider full cost recovery duty The PCT is required to recover full costs in relation to its provider functions. The performance for 2010-11 is as follows: Provider gross operating costs Provider Operating Revenue Net Provider Operating Costs Costs Met Within PCTs Own Allocation Under/(Over) Recovery of Costs

7,950 0 0 0 0

10,523 0 0 0 0

0 0 0 7,950 10,506 2,556

0 0 0 10,523 11,147 624 2009-10 £000

2010-11 £000

128,513 (17,556) 110,957 (109,107) 1,850

0 0 0 0 0

Provider Services transferred to the Hertfordshire Community NHS Trust with effect from 1st November 2010. Under merger accounting rules the Trust will be accounting for the full year Provider Services costs in 2010-11.

4. Miscellaneous Revenue Not Appropriated- AppropriatedIn-Aid In-Aid £000 £000

2010-11

2009-10

Total £000

Fees and Charges 0 28 0 Dental Charge income from Contractor-Led GDS & PDS 14,647 14,528 14,647 Dental Charge income from Trust-Led GDS & PDS 0 0 0 Prescription Charge income 8,095 192 8,095 Strategic Health Authorities 6,732 6,904 6,732 NHS Trusts 7,721 6,110 7,721 NHS Foundation Trusts 1,793 2,264 1,793 Primary Care Trusts Contributions to DATs 0 0 0 Primary Care Trusts - Other 10 2,995 10 Primary Care Trusts - Lead Commissioning 1,104 2,162 1,104 English RAB Special Health Authorities 0 0 0 Other English Special Health Authorities 0 5 0 Department of Health - SMPTB 0 0 0 Department of Health - Other 260 1,150 260 Local Authorities 362 3,949 362 Patient Transport Services 0 0 0 0 Education, Training and Research 0 0 356 0 Non-NHS: Private Patients 0 34 0 Non-NHS: Overseas Patients (NonReciprocal) 0 0 0 NHS Injury Costs Recovery 0 8 0 Other Non-NHS Patient Care Services 0 0 124 0 Charitable and Other Contributions to Expenditure 0 263 0 Transfers from the Donated Asset Reserve 55 54 55 Transfers from the Government Grant Reserve 0 0 0 Contingent Rental Income from Finance Leases 0 0 0 0 Rental Income from Operating Leases 980 0 432 980 Other income 114 0 962 114 Total miscellaneous income 24,198 17,675 41,873 42,520 The increase in Prescription Charge income is due to the devolvement of the GP Global Sum originally held by the Department of Health

5. Operating Costs 5.1 Analysis of operating costs:

2010-11 ÂŁ000

2009-10 ÂŁ000

Goods and Services from Other PCTs Healthcare Non-Healthcare Total

138,753 1,060 139,813

126,411 1,292 127,703

Goods and Services from Other NHS Bodies other than FTs Healthcare Non-Healthcare Total

800,147 981 801,128

656,951 933 657,884

Goods and Services from Foundation Trusts Purchase of Healthcare from Non-NHS bodies Social Care from Independent Providers Expenditure on Drugs Action Teams Non-GMS Services from GPs Contractor Led GDS & PDS (excluding employee benefits) Salaried Trust-Led PDS & PCT DS (excluding employee benefits) Chair, Non-executive Directors & PEC remuneration Consultancy Services Prescribing Costs G/PMS, APMS and PCTMS (excluding employee benefits) Pharmaceutical Services Local Pharmaceutical Services Pilots New Pharmacy Contract General Ophthalmic Services Supplies and Services - Clinical Supplies and Services - General Establishment Transport Premises Impairments and Reversals of Property, plant and equipment Impairments and Reversals of non-current assets held for sale Depreciation Amortisation Impairment and Reversals Intangible non-current assets Cost of Capital Charge Impairment and Reversals of Financial Assets Impairment of Receivables Inventory write offs Research and Development Expenditure Audit Fees Other Auditors Remuneration Clinical Negligence Costs

81,958 259,640 0 4,908 1,406 63,317 0 407 711 155,965 153,895 3,835 0 35,506 10,129 375 107 2,304 362 3,071 0 0 3,917 129 0 0 0 129 0 5 293 24 0

72,850 236,771 0 4,962 3,100 63,353 213 498 1,036 149,740 149,595 4,731 0 13,117 10,724 9,250 3,364 6,621 92 13,183 4,174 0 3,358 0 0 124 0 32 0 372 584 143 0

Total Operating costs charged to Statement of Comprehensive Net Expenditure Employee Benefits Employee Benefits associated with PCTMS Trust led PDS and PCT DS PCT Officer Board Members Other Employee Benefits Total Employee Benefits charged to OCS Total Operating Costs

2010-11 ÂŁ000

2009-10 ÂŁ000

1,733,052

1,543,912

368 0 423 21,648 22,439

0 612 116,522 117,134

1,755,491

1,661,046

5.2 Analysis of operating expenditure by expenditure classification

2010-11

2009-10

ÂŁ000

Purchase of Primary Health Care GMS / PMS/ APMS / PCTMS

154,263

146,745

Prescribing costs

155,850

149,740

63,317

63,353

1,823

10,129

10,724

3,950

4,731

35,506

13,117

1,406

3,100

197

424,618

393,388

66,754

62,896

141,627

137,295

58,224

57,369

780,462

730,326

43,966

43,060

122,045

109,496

74,692

71,165

1,287,770

1,211,607

Grants (revenue) to fund Capital Projects - GMS

1,773

2,850

Grants (revenue) to LAs to fund Capital Projects

833

2,803

Grants (revenue) to fund Capital Projects - Dental

Grants (revenue) to fund Capital Projects - other

1,715,018

1,610,728

85,672

Contractor led GDS & PDS Trust led GDS & PDS General Ophthalmic Services Department of Health Initiative Funding Pharmaceutical services Local Pharmaceutical Services Pilots New Pharmacy Contract Non-GMS Services from GPs Other Total Primary Healthcare purchased Purchase of Secondary Healthcare Learning Difficulties Mental Illness Maternity General and Acute Accident and emergency Community Health Services Other Contractual Total Secondary Healthcare Purchased Grant Funding

Grants (revenue) to private sector to fund Capital Projects

Total Healthcare Purchased by PCT PCT self-provided secondary healthcare included above

From 2011/12, the PCT’s allocation for social care for adults with a learning disability will transfer to the local authority under the Valuing People Now programme. Responsibility for the commissioning of social care for adults with a learning disability will transfer at the same time. In the 2090-10 accounts, pooled budget expenditure on Mental Illness and Learning Difficulties was largely apportioned on the basis of the sub-pools in operation within the pooled budget with the apportionment based on the PCT’s contributions to those sub-pools. In 2010-11, as part of the agreement between the PCT and the County Council on budgets to be transferred under Valuing People Now, and in order to bring all LD commissioning together to benefit from the expertise of the Council, an element of the PCT's continuing care expenditure transferred to the s75 agreement. The 2090-10 apportionment of Mental Health and Learning Disability has been restated to aid comparability. 6. Operating Leases The PCT has arrangements with contractors that under IFRS must be accounted for as leases. Hertfordshire PCT has entered into certain financial arrangements involving the use of GP premises. This under IFRIC 4 and IAS 17 has determined that those operating leases must be recognised, but, as there is no defined term in the arrangements entered into, it is not possible to analyse the arrangements over financial years. The financial value included in the Operating Cost Statement for 2010-11 is £10.3m (£9.4m in 2090-10).

6.1 PCT as lessee Payments recognised as an expense Minimum lease payments Contingent rents Sub-lease payments Total Payable: No later than one year Between one and five years After five years Total

Buildings Land Other £000 £000 £000

1,189

2,877 4,137 8,203

337 18 452

37 0 99

Total £000

2009-10 £000

1,861 0 0 1,861

1,712 0 0 1,712

1,348 3,251

1,673 3,179

4,155 8,754

3,945 8,797

Total future sublease payments expected to be received: £2,636,000

6.2 PCT as lessor The PCT has a number of premises that it obtains rental income from. Of these, the terms of the leases range from 1 to 20 years. 2010-11 ÂŁ000 Recognised as income Rents Contingent rents Total Receivable: No later than one year Between one and five years After five years Total

2009-10 ÂŁ000

980 0 980

432 0 432

459 1,520 2,823 4,802

501 1,239 1,188 2,928

7. Employee benefits and staff numbers 7.1 Employee benefits Total £000 Salaries and wages Social security costs Employer contributions to NHS Pensions scheme Other pension costs Other post-employment benefits Other employment benefits Termination benefits Total employee benefits Recognised as: Commissioning employee benefits Provider employee benefits Employee benefits capitalised as part of assets Total

2010-11 Permanently Employed £000

Other £000

Total £000

2009-10 Permanently Employed £000

Other £000

18,511 1,432

16,569 1,432

1,942 0

99,615 6,067

90,397 6,067

9,218 0

2,261 0 0 0 235 22,439

2,261 0 0 0 235 20,497

0 0 0 0 0 1,942

11,298 0 0 0 204 117,184

11,298 0 0 0 204 107,966

0 0 0 0 0 9,218

22,439 0

23,026 94,108

0 22,439

50 117,184

7.2 Staff Numbers Total Number Medical and dental Ambulance staff Administration and estates Healthcare assistants and other support staff Nursing, midwifery and health visiting staff Nursing, midwifery and health visiting learners Scientific, therapeutic and technical staff Social Care staff Other Total staff numbers

2010-11 Permanently Employed Number

2009-10 Other Number

Total Number

Permanently Employed Number

Other Number

11 0 426

9 0 394

1 0 32

59 0 889

55 0 873

4 0 16

604

534

1,023

953

0 29 0 4 494

0 27 0 4 453

0 2 0 1 40

0 519 0 19 3,113

0 513 0 19 2,947

0 6 0 0 166

Numbers of staff above (wte) whose costs have been capitalised: 13.3

7.3 Retirements due to ill-health In 2010-11, this information is being provided by NHS Pensions directly to the Department of Health. In 2009-10, two people retired on ill-health grounds and the total additional accrued pension liabilities was ÂŁ35,506.

7.4 Pension costs Past and present employees are covered by the provisions of the NHS Pensions 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 NHS Body 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: a) Full actuarial (funding) valuation The 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 2004 and covered the period from 1 April 1999 to that date. The conclusion from the 2004 valuation was that the scheme had accumulated a notional deficit of ÂŁ3.3 billion against the notional assets as at 31 March 2004. In order to defray the costs of benefits, employers pay contributions at 14% of pensionable pay and most employees had up to April 2008 paid 6%, with manual staff paying 5%. Following the full actuarial review by the Government Actuary undertaken as at 31 March 2004, and after consideration of changes to the NHS Pension Scheme taking effect from 1 April 2008, his Valuation report recommended that employer contributions could continue at the existing rate of 14% of pensionable pay, from 1 April 2008, following the introduction of employee contributions on a tiered scale from 5% up to 8.5% of their pensionable pay depending on total earnings. On advice from the scheme actuary, scheme contributions may be varied from time to time to reflect changes in the schemeâ&#x20AC;&#x2122;s liabilities. b) Accounting valuation A valuation of the scheme liability is carried out annually by the scheme actuary as at the end of the reporting period by updating the results of the full actuarial valuation. Between the full actuarial valuations at a two-year midpoint, a full and detailed member data-set is provided to the scheme actuary. At this point the assumptions regarding the composition of the scheme membership are updated to allow the scheme liability to be valued. The valuation of the scheme liability as at 31 March 2011 is based on detailed membership data as at 31 March 2008 (the latest midpoint) updated to 31 March 2011 with summary global member and accounting data.

The latest assessment of the liabilities of the scheme is contained in the scheme actuary report, which forms part of the annual NHS Pension Scheme (England and Wales) Resource Account, published annually. These accounts can be viewed on the NHS Pensions website. Copies can also be obtained from The Stationery Office. c) Scheme provisions The NHS Pension Scheme provided defined benefits, which are summarised below. This list is an illustrative guide only, and is not intended to detail all the benefits provided by the Scheme or the specific conditions that must be met before these benefits can be obtained: The Scheme is a “final salary” scheme. Annual pensions are normally based on 1/80th for the 1995 section and of the best of the last three years pensionable pay for each year of service, and 1/60th for the 2008 section of reckonable pay per year of membership. Members who are practitioners as defined by the Scheme Regulations have their annual pensions based upon total pensionable earnings over the relevant pensionable service. With effect from 1 April 2008 members can choose to give up some of their annual pension for an additional tax free lump sum, up to a maximum amount permitted under HMRC rules. This new provision is known as “pension commutation”. Annual increases are applied to pension payments at rates defined by the Pensions (Increase) Act 1971, and are based on changes in retail prices in the twelve months ending 30 September in the previous calendar year. Early payment of a pension, with enhancement, is available to members of the scheme who are permanently incapable of fulfilling their duties effectively through illness or infirmity. A death gratuity of twice final year’s pensionable pay for death in service, and five times their annual pension for death after retirement is payable 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 the statement of comprehensive income at the time the PCT commits itself to the retirement, regardless of the method of payment. Members can purchase additional service in the NHS Scheme and contribute to money purchase AVCs run by the Scheme’s approved providers or by other Free Standing Additional Voluntary Contributions (FSAVC) providers.

7.5 Exit Packages for staff leaving in 2010-11

2010-11 Number of Number of compulsory other redundancies departures agreed Number Number <£20,001 £20,001 - £40,000 £40,001 - £100,000 £100,001- £150,000 £150,001- £200,000 >£200,000 Total number of exit packages by type (total cost)

2009-10 Total cost of Number of Number of exit packages compulsory other by cost band redundancies departures (total cost) agreed £'000 Number Number

Total cost of exit packages by cost band (total cost) £'000

0 0 0 0 0 0

12 2 1 0 0 0

91 62 83 0 0 0

0 0 0 0 0 0

0 0 0 0 0 1

0 0 0 0 0 204

235

204

Redundancy and other departure costs have been paid in accordance with the provisions of the NHS Scheme. Exit costs in this note are accounted for in full in the year of departure. Where the PCT has agreed early retirements, the additional costs are met by the PCT and not by the NHS pensions scheme. Ill-health retirement costs are met by the NHS pensions scheme and are not included in the table. This disclosure reports the number and value of exit packages taken by staff leaving in the year. Note: The expense associated with these departures may have been recognised in part or in full in a previous period.

7.5.1 Management Costs

2010-11

2009-10

Management costs (£000s) Weighted population (number in units) Management Cost per weighted head of population (£ per head)

13,760 978,338 14.06

23,267 970,807 23.97

7.5.2 Commissioning Management Costs Management costs (£000s) Weighted population (number in units) Management Cost per weighted head of population (£ per head)

2010-11 13,760 978,338 14.06

2090-10 15,967 970,807 16.45

7.5.3 Provider Management Costs Management costs (£000s) Revenue Management cost as a percentage of turnover

2010-11

2090-10 7,299 126,663 5.76%

0 0

7.6 Running Costs 1 2010-11 Commissioning Public services health

Total

Running costs (£000s) 25,515

2,169

27,684

Weighted population (number in units) 978,338 978,338 978,338 Running costs per head of population (£ per head)

26.08

2.22

28.30

7.7 Total Public Health Expenditure 1 2010-11 £000 Total public health expenditure1 1

36,412

Running costs and public health expenditure separately identified for the first time in 2010-11.

8. Better Payment Practice Code 8.1 Measure of compliance Non-NHS Payables Total Non-NHS Trade Invoices Paid in the Year Total Non-NHS Trade Invoices Paid Within Target Percentage of Non-NHS Trade Invoices Paid Within Target NHS Payables Total NHS Trade Invoices Paid in the Year Total NHS Trade Invoices Paid Within Target Percentage of NHS Trade Invoices Paid Within Target

2010-11 Number

2010-11 £000

2009-10 Number

2009-10 £000

26,768

255,334

55,129

298,013

25,388

235,883

50,738

280,929

94.84%

92.38%

92.04%

94.27%

4,001 3,245

978,437 942,308

4,944 4,188

835,410 827,381

81.10%

96.31%

84.71%

99.04%

The Better Payment Practice Code requires the PCT to aim to pay all valid invoices by the due date or within 30 days of receipt of a valid invoice, whichever is later. 8.2 The Late Payment of Commercial Debts (Interest) Act 1998 No payments were made in respect of claims under this legislation in 2010-11 or 2009-10. 9. Investment Income Rental Income PFI finance lease income planned contingent Other finance lease revenue Interest Income LIFT: equity dividends receivable LIFT: loan interest receivable Bank interest Other loans and receivables Impaired financial assets Other financial assets Total investment income

2010-11 £000

2009-10 £000

0 0 0

0 3 0 0 0 0 3

0 1 0 0 0 0 1

10. Other Gains and Losses Gain/(loss) on disposal of property, plant and equipment Gain/(loss) on disposal of intangible assets Gain/(loss) on disposal of financial assets Gain/(loss) on foreign exchange Change in fair value of financial assets carried at fair value through the SoCNE Change in fair value of financial liabilities carried at fair value through the SoCNE

11. Finance Costs Interest Interest on obligations under finance leases Interest on obligations under PFI contracts: - main finance cost - contingent finance cost Interest on obligations under LIFT contracts: - main finance cost - contingent finance cost Provisions - unwinding of discount Interest on late payment of commercial debt Other interest expense Other finance costs Total

2010-11 £000 0 0 0 0

2009-10 £000 0 0 0 0

(19)

2010-11 £000

2009-10 £000

415 468

442 411

0 0 136 0 0 141 1,248

0 0 109 0 0 202 1,259

12 Property, plant and equipment 12.1 Property, plant and equipment 2010-11

Cost or valuation: At 1 April 2010 Additions Purchased Additions Donated Additions Government Granted Reclassifications Reclassifications as Held for Sale Disposals other than for sale Upward revaluation/positive indexation Impairments/negative indexation Reversal of Impairments Transfers (to)/from NHS Bodies At 31 March 2011 Depreciation At 1 April 2010 Reclassifications Reclassifications as Held for Sale Disposals other than for sale Upward revaluation/positive indexation Impairments Reversal of Impairments Charged During the Year

Land

Buildings excluding dwellings

Dwellings

£000

Assets under construction and payments on account £000

Plant and machinery

Transport equipment

Information technology

Furniture and fittings

Total

£000

38,577 0 0 0 0 0 0

58,433 2,585 0 0 0 0 0

0 0 0 0 0 0 0

0 821 0 0 0 0 0

917 353 0 0 0 0 0

20 0 0 0 0 0 0

12,631 2,934 0 0 0 0 0

3,280 655 0 0 0 0 0

113,858 7,348 0 0 0 0 0

1,790 0 0 1 40,368

3,172 0 0 0 64,190

0 0 0 0 0

44 0 0 0 865

0 0 0 0 1,270

0 0 0 0 20

0 0 0 0 15,565

0 0 0 0 3,935

5,006 0 0 1 126,213

2,777 0 0 0

9,819 0 0 0

0 0 0 0

292 0 0 0

20 0 0 0

7,237 0 0 0

370 0 0 0

20,515 0 0 0

0 0 0 0

545 0 0 1,906

0 0 0 0

0 0 0 87

0 0 0 0

0 0 0 1,507

0 0 0 417

545 0 0 3,917

Land

Buildings excluding dwellings

Dwellings

£000

Transfers to NHS Bodies At 31 March 2011 Net book value at 31 March 2011

£000 0 2,777 37,591

0 12,270 51,920

Purchased Donated Government Granted Total at 31 March 2011

37,591 0 0 37,591

12.2 Asset financing: Owned Held on finance lease On-SOFP PFI contracts PFI residual: interests Total

37,591 0 0 0 37,591

2010-11

Plant and machinery

Transport equipment

Information technology

£000

0 0 0

Assets under construction and payments on account £000 0 0 865

Furniture and fittings

Total

0 379 891

0 20 0

0 8,744 6,821

0 787 3,148

0 24,977 101,236

50,241 1,679 0 51,920

0 0 0 0

865 0 0 865

881 10 0 891

0 0 0 0

6,821 0 0 6,821

3,139 9 0 3,148

99,538 1,698 0 101,236

40,097 139 11,684 0 51,920

0 0 0 0 0

865 0 0 0 865

824 67 0 0 891

0 0 0 0 0

6,821 0 0 0 6,821

3,148 0 0 0 3,148

89,346 206 11,684 0 101,236

12.3 Revaluation Reserve Balance for Property, Plant and Equipment Land

At 1 April 2010 Movements (specify) At 31 March 2011

£000 8,159 1,790 9,949

Buildings £000 9,426 2,586 12,012

Dwellings

Plant and machinery

Transport equipment

£000

£000s

0 0 0

Information technology

Furniture and fittings

£000 0 0 0

0 0 0

Total £000 17,585 4,376 21,961

12.4 Economic Lives of Non-Current Assets

Minimum Life Years Intangible Assets Development Expenditure Property, Plant and Equipment Buildings excluding dwellings Dwellings Plant and Machinery Transport Equipment Information Technology Furniture and Fittings

5 5 0 4 0 5 4

12.1 Property, plant and equipment Land

Buildings excluding dwellings

Dwellings

£000

2009-10 Cost or valuation: At 1 April 2009 Additions - purchased Additions - donated Additions - government granted Reclassifications Reclassified as held for sale Disposals other than by sale

Revaluation & indexation gains Impairments Reversals of impairments In-year transfers to/from NHS bodies At 31 March 2010 Depreciation At 1 April 2009 Reclassifications Reclassifications as Held for Sale Disposals other than for sale Upward revaluation/positive indexation Impairments Reversal of Impairments Charged During the Year Transfers to NHS Bodies At 31 March 2010

38,317 1 0 0 0 0 0 683 (424) 0 0 38,577

56,660 3,830 0 0 (94) 0 0 84 (2,047) 0 0 58,433

0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 2,777 0 0 0 2,777

6,574 0 0 0 1,397 0 1,848 0 9,819

0 0 0 0 0 0 0 0 0

Assets under construction and payments on account £000

Plant & machinery

Transport equipment

Information technology

Furniture and fittings

Total

£000

124 0 0 0 (124) 0 0 0 0 0 0 0

2,199 837 0 0 0 0 (945) 0 0 0 (1,174) 917

20 0 0 0 0 0 0 0 0 0 0 20

10,681 3,334 0 0 0 0 (489) 0 0 0 (895) 12,631

1,477 2,325 0 0 218 0 (240) 0 0 0 (500) 3,280

109,478 10,327 0 0 0 0 (1,674) 767 (2,471) 0 (2,569) 113,858

1,245 0 0 (571) 0 0 0 (382) 0 292

20 0 0 0 0 0 0 0 0 20

6,828 0 0 (285) 0 0 0 694 0 7,237

620 2 0 (116) 0 0 0 (136) 0 370

8,713 6,576 0 (972) 0 4,174 0 2,024 0 20,515

0 0 0 0

Land

2009-10 Net book value

35,800

48,614

Assets under construction and payments on account 0

Purchased Donated Government Granted Total at 31 March 2010

35,800 0 0 35,800

46,966 1,648 0 48,614

0 0 0 0

614 11 0 625

0 0 0 0

5,394 0 0 5,394

2,901 9 0 2,910

91,675 1,668 0 93,343

35,800 0 0 0 35,800

37,246 156 11,212 0 48,614

0 0 0 0 0

540 85 0 0 625

0 0 0 0 0

5,394 0 0 0 5,394

2,910 0 0 0 2,910

81,890 241 11,212 0 93,343

12.2 Asset financing: Owned Held on finance lease On-SOFP PFI contracts PFI residual: interests

Buildings excluding dwellings

Dwellings

Plant & machinery

Transport equipment

Information technology

Furniture and fittings

625

5,394

2,910

93,343

Total

13.1 Intangible non-current assets Software purchased

Software internally generated

Licences & trademarks

Patents

Development expenditure

Total

£000

2010-11 Cost or valuation: At 1 April 2010 Additions - purchased Additions - internally generated Additions - donated Additions - government granted Reclassifications Reclassified as held for sale Disposals other than by sale

Revaluation & indexation gains Impairments Reversal of impairments In-year transfers to/from NHS bodies At 31 March 2011 Amortisation At 1 April 2010 Charged in-year Reclassifications Reclassified as held for sale Disposals other than by sale

Revaluation & indexation gains Impairments Reversal of Impairments In-year transfers to NHS bodies At 31 March 2011

78 0 0 0 0 0 0 0 0 0 0 0 78

0 0 0 0 0 0 0 0 0 0 0 0 0

487 602 0 0 0 0 0 0 0 0 0 0 1,089

565 602 0 0 0 0 0 0 0 0 0 0 1,167

78 0 0 0 0 0 0 0 0 78

0 0 0 0 0 0 0 0 0 0

0 129 0 0 0 0 0 0 0 129

78 129 0 0 0 0 0 0 0 207

2010-11 NBV at 31 March 2011 Net book value at 31 March 2011 comprises: Purchased Donated Government Granted Total at 31 March 2011

Software purchased

Software internally generated

Licences & trademarks

Patents

Development expenditure

Total

960

0 0 0 0

960 0 0 960

13.1 Intangible non-current assets 2009-10 Cost or valuation: At 1 April 2009 Additions - purchased Additions - internally generated Additions - donated Additions - government granted Reclassifications Reclassified as held for sale Disposals other than by sale Revaluation & indexation gains Impairments Reversal of impairments In-year transfers to/from NHS bodies At 31 March 2010 Amortisation At 1 April 2009 Charged During the Year Impairments Reversal of Impairments Reclassifications Revaluation/Indexation gains Reclassified as Held for Sale Disposals other than for sale In-year transfers to NHS bodies At 31 March 2010 Net book value at 31 March 2010 Net book value at 31 March 2010 comprises: Purchased Donated Government Granted Total at 31 March 2010

Software purchased £000

Development expenditure £000

Total

78 0 0 0 0 0 0 0 0 0 0 0 78

0 487 0 0 0 0 0 0 0 0 0 0 487

78 487 0 0 0 0 0 0 0 0 0 0 565

78 0 0 0 0 0 0 0 0 78 0

0 0 0 0 0 0 0 0 0 0 487

78 0 0 0 0 0 0 0 0 78 487

0 0 0 0

487 0 0 487

£000

13.2 Intangible non-current assets Hertfordshire PCT has a single, integrated Electronic Patient Record (EPR). The PCT has created and will continue to expand their single EPR for the population of Hertfordshire. The deployment programme currently covers Community and Child Health services, GP Led Health Centres, Urgent Care centres and approx 20% of GP Practices across the county. A total of 34 GP practices have already join the programme which represents 26% of the GP practices in Hertfordshire. The EPR is built on the nationally delivered TPP SystemOne application which provides the PCT with a completely integrated, shared, clinical record and a significant information asset from both a clinical and performance management perspective. 100

13.3 Revaluation reserve balance for intangible assets There is no revaluation reserve balance for intangible assets. 14. Impairments No assets have been impaired in the year ending 31st March 2011. 15. Non-current assets held for sale The PCT has no non-current assets held for sale. 16. Inventories

Drugs £000 Balance at 01/04/2010 Additions Inventories recognised as an expense in the period Write-down of inventories (including losses) Reversal of write-down previously taken to SoCNE Transfers (to)/from other bodies Balance at 31/03/11

Loan Consumables Equipment £000 £000

Other £000

Total £000

0 0

284 0

307 0

591 0

(30)

0 0 0

0 277 561

0 (277) 0

0 0 561

The detailed movements of inventories is disclosed for the first time in 2010-11. 17.1 Trade and other receivables

NHS receivables - revenue NHS receivables - Capital Non-NHS receivables - revenue Non-NHS receivables - capital Provision for the impairment of receivables VAT Prepayments & other accrued income Finance Lease Receivables Operating Lease Receivables Other Receivables Total

31 March 2011 £000 14,331 0 3,230 0 (160) 537 6,443 0 0 850 25,231

31 March 2010 £000 4,504 0 680 0 (120) 280 6,028 0 0 1,068 12,440

31 March 2011 £000 0 0 0 0 0 0 1,612 0 0 0 1,612

31 March 2010 £000 0 0 0 0 0 0 1,707 0 0 0 1,707

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17.2 Receivables past their due date but not impaired By up to three months By three to six months By more than six months Total

17.3 Provision for impairment of receivables Balance at 1 April Amount written off during the year Amount recovered during the year (Increase)/decrease in receivables impaired Balance at 31 March

31 March 31 March 2010 2011 £000 £000 224 1,717 762 118 415 247 1,401 2,082

2010-11 £000 (120) 89 7 (136) (160)

2009-10 £000 (88) 0 59 (91) (120)

In determining the level of provision for the impairment of receivables the PCT carried out an objective review of its receivables. Of the £160,000 provision above, approximately £98,000 relates to a single customer which has been referred to the PCT's solicitors.

18. Trade and other payables

Interest payable Payments received on account NHS payables - revenue NHS Payables - capital FHS Payables Non-NHS trade payables - revenue Non-NHS trade payables - capital Tax and Social Security Costs VAT Other Payables Accruals & Deferred Income Total

Current 31 March 31 March 2010 2011 £000 £000 0 0 0 0 27,456 35,537 0 59 51,793 51,378 14,750 25,910 2,076 966 167 461 6 0 3,096 1,532 137 195 99,481 116,038

Non current 31 March 31 March 2010 2011 £000 £000

0 0

Other payables include £1,511k in respect of outstanding pensions contributions at 31 March 2011 (31 March 2010: £2,950k. This comparator has been revised to include GMS and PMS superannuation payables in order to be consistent with the current year)

102

19 Borrowings Current 31 March 31 March 2010 2011 £000 £000 Bank overdraft - Office of HM Paymaster General / Government Banking Service Bank overdraft - Commercial banks Finance lease liabilities PFI liabilities: Main liability Lifecycle replacement received in advance LIFT liabilities: Main liability Lifecycle replacement received in advance Other (describe) Total

Non current 31 March 31 March 2010 2011 £000 £000

0 0 122

0 0 121

346

453

807

823

7,268

7,810

0 0 929

0 0 944

0 0 7,614

0 0 8,263

20. Other liabilities The PCT has no current or non current other liabilities in 2010-11 and 2009-10. 21. Provisions Current 31 March 31 March 2010 2011 £000 £000 Pensions relating to former directors Pensions relating to other staff Legal claims Restructurings Continuing Care Agenda for Change Equal Pay Other (specify) Redundancy Total

0 281 0 0 275 0 0 0 0 556

0 562 0 0 378 0 0 0 940

Non current 31 March 31 March 2010 2011 £000 £000 7 3,876 21 0 0 0 0 929 0 4,833

8 3,923 21 0 0 0 0 858 4,810

103

Pensions relating to former directors £000

Pensions relating to other staff

Legal claims

Restructurings

Other

Redundancy

£000

At 1 April 2010 Arising during the year Utilised during the year Reversed unused Unwinding of discount Transferred in-year At 31 March 2011

7 0 0 0 0 0 7

4,385 110 (451) (3) 116 0 4,157

21 0 0 0 0 0 21

0 0 0 0 0 0 0

1,337 13 (63) (103) 20 0 1,204

0 0 0 0 0 0 0

Expected timing of cash flows: Within one year Between one and five years After five years

0 7 0

281 1,255 2,621

0 21 0

0 0 0

252 331 621

0 0 0

Pensions relating to other staff is the estimated full amount of the PCT's liability for the additional cost to the NHS Pensions scheme of employees retiring early. The liability has been calculated following actuarial advice, but is by its nature only an estimate. The Other Provisions relate to injury benefit (£929,000) arising out of long standing back-to-back arrangement with local Trusts. £203,108 is included in the provisions of the NHS Litigation Authority at 31/3/2011 in respect of clinical negligence liabilities of the PCT (31/03/10 £268,978).

104

22. Contingencies 31 March 2011 £000

31 March 2010 £000

1,225

1,414

Contingent liabilities The contingent liability relates to claims for the reimbursement of continuing care expenditure, following the decision of the Health Service Ombudsman. Where a reasonable estimate of the PCT's liability can be made, based on experience to date, it has been included as a provision (Note 21). However, given the uncertainty regarding the final outcome of individual cases, a contingent liability has been included to reflect the potential cost of those claims to the PCT. 23. Capital Commitments Contracted capital commitments at 31 March not otherwise included in these financial statements:

Property, plant and equipment Intangible assets Total

31 March 2011 £000 0 0 0

31 March 2010 £000 590 0 590

24. Other financial liabilities The PCT has no other financial liabilities carried at fair value through profit and loss for 2010-11 and 2090-10, other than those already disclosed in other notes to the accounts. 25. Finance lease obligations The PCT has five finance leases; the four properties are at Crossbrook Street, Cheshunt and 1, 3 and 4 George Street, Hemel Hempstead. The remaining lease is for the Danwood contract and is for the supply of multifunctional photocopying devices exclusively for the use of the PCT. The property leases have an unexpired term of between 2 and 6 years and is a full repairing and insuring lease, whilst the Danwood lease has an unexpired term of 3 years.

105

Amounts payable under finance leases:

Within one year Between one and five years After five years Less future finance charges Present value of minimum lease payments

Minimum lease payments

31 March 2011 £000 59 212 21 (21)

31 March 2010 £000 59 224 62 (28)

271

317

Included in: Current borrowings Non-current borrowings

Amounts payable under finance leases (Land)

Minimum lease payments 31 March 2011 £000

Within one year Between one and five years After five years Less future finance charges Present value of minimum lease payments Included in: Current borrowings Non-current borrowings

31 March 2010 £000

Present value of minimum lease payments 31 March 31 March 2010 2011 £000 £000 55 55 206 197 56 19 271

317

55 216 271

55 262 317

Present value of minimum lease payments 31 March 31 March 2010 2011 £000 £000

0 0 0 0

0 0 0

0 0 0 -

0 0 0

106

Amounts payable under finance leases (Other)

Minimum lease payments

31 March 2011 £000 Within one year Between one and five years After five years Less future finance charges Present value of minimum lease payments

31 March 2010 £000

Present value of minimum lease payments 31 March 31 March 2010 2011 £000 £000

70 136 0 (9)

70 202 0 (15)

67 130 0

66 191 0 -

197

257

197

257

67 130 197

66 191 257

Included in: Current borrowings Non-current borrowings

26. Finance lease receivables (ie as lessor) The PCT does not have any Finance Lease receivables. 27. PFI and NHS LIFT Schemes On 4 May 2001, Royston, Buntingford & Bishop’s Stortford PCT, a predecessor organisation to East & North Hertfordshire PCT entered into an agreement under the Private Finance Initiative (PFI) with Ryhurst (Essex & Herts) Ltd. The PFI arrangement was for the construction of a new community hospital at the existing Herts & Essex Hospital site at Haymeads Lane, Bishops Stortford Hertfordshire. The capital value of the scheme was £13.2m. The construction of the hospital was completed on 28 March 2003. Full services started from 28 April 2003 and from that date, the PCT was committed to a unitary payment of £1.9m per annum (subject to annual RPI indexation movement based on the April RPI index each year) for a period of 30 years. Herts & Essex Hospital has a net book value of £16.7m (£11.7m building, £5m land) at the statement of financial position date. Arrangement: The contract is for the provision of services for maintenance, domestics and catering for the hospital. The ownership of the equipment between the parties is specified in the PFI Agreement. The arrangement works on the basis of reduction in the payments for failure to deliver to the agreed Service Levels. The provision of services is managed through service level agreements which have measurable targets and are subject to regular monitoring.

107

Terms of Arrangement: The unitary payment is comprised of two elements, a Financing fee and a Service fee which is subject to indexation based on the movement in the Retail Prices Index (RPI). At the end of the project term the Agreement will terminate with no compensation payable. 27.1 PFI and NHS LIFT schemes on-Statement of Financial Position The PCT is committed to the following charges and represents the future capital creditor payments plus interest charges by the periods in which they are paid. The interest element is then shown separately. The note therefore shows the present value of the minimum lease payments Total obligations for on-Statement of Financial Position PFI/NHS LIFT contracts due:

Not later than one year Later than one year, not later than five years Later than five years Sub total Less: interest element Total

31 March 2011 £000

31 March 2010 £000

965

996

3,425 5,266 9,656

3,486 5,963 10,445

(1,581) 8,075

(1,812) 8,633

27.2 Charges to expenditure The total charged in the year to expenditure in respect of off-statement of financial position PFI contracts and the service element of on-statement of financial position PFI was £768,000 (prior year £750,000).

The PCT is committed to the following charges PFI/LIFT scheme expiry date: Not later than one year Later than one year, not later than five years Later than five years Total

31 March 2011 £000

31 March 2010 £000

786 3,334 18,226 22,346

768 3,257 19,089 23,114

The comparator has been changed to show the period in which the payment was due. This change was a result of Treasury’s amendment to the 2010-11 Financial Reporting Manual.

108

28. Financial Instruments Financial risk management Financial 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. As the cash requirements of the PCT are met through Parliamentary Funding, financial instruments play a more limited role in creating risk that would apply to a non-public sector body of a similar size. The majority of financial instruments relate to contracts for non-financial items in line with the PCTâ&#x20AC;&#x2122;s expected purchase and usage requirements and the PCT is therefore exposed to little credit, liquidity or market risk. Currency risk The PCT is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and Sterling based. The PCT has no overseas operations. The PCT therefore has low exposure to currency rate fluctuations. Interest rate risk PCTs are not permitted to borrow. The PCT therefore has low exposure to interestrate fluctuations. Credit Risk Because the majority of the PCTâ&#x20AC;&#x2122;s income comes from funds voted by Parliament the PCT has low exposure to credit risk. Liquidity Risk The PCT is required to operate within limits set by the Secretary of State for the financial year and draws down funds from the Department of Health as the requirement arises. The PCT is not, therefore, exposed to significant liquidity risks.

109

28.1 Financial Assets

Embedded derivatives Receivables - NHS Receivables - non-NHS Cash at bank and in hand Other financial assets Total at 31 March 2011 Embedded derivatives Receivables - NHS Receivables - non-NHS Cash at bank and in hand Other financial assets Total at 31 March 2010

28.2 Financial Liabilities

Embedded derivatives NHS payables Non-NHS payables Other borrowings PFI & finance lease obligations Other financial liabilities Total at 31 March 2011 Embedded derivatives NHS payables Non-NHS payables Other borrowings PFI & finance lease obligations Other financial liabilities Total at 31 March 2010

At ‘fair Loans and value receivables through profit and loss’ £000 £000 0 14,331 3,070 0 0 1,387 0 18,788

Available for sale

Total

£000

0 0

0 14,331 3,070 0 1,387 18,788

0 0

0 14,018 1,944 1 1,669 17,632

0 0

At ‘fair value through profit and loss’ £000 0

0 0

14,018 1,944 1 1,669 17,632

Other

Total

£000 35,596 26,876 0 8,543 53,566 124,581

£000 0 35,596 26,876 0 8,543 53,566 124,581

37,598 17,995 0 9,207 55,062 119,862

0 37,598 17,995 0 9,207 55,062 119,862

0 0

110

29. NHS LIFT Investments

Loan £000

Share capital £000

Total £000

Balance at 31 March 2010 Additions Disposals Loan repayments Revaluations Loans repayable within 12 months Balance as at 31 March 2011

439 0 0 0 0 0 439

1 0 0 0 0 0 1

440 0 0 0 0 0 440

Balance as at 1 April 2009 Additions Disposals Loan repayments Revaluations Loans repayable within 12 months Balance as at 31 March 2010

28 411 0 0 0 0 439

1 0 0 0 0 0 1

29 411 0 0 0 0 440

On 1st July 2008, the PCT acquired loan notes and shares to the value of £27,570 and £400 respectively. This is in respect of the Assemble Community Partnership, the name of the newly formed partnership company between East & North Hertfordshire PCT, Bedfordshire PCT, Milton Keynes PCT, Guildhouse (a private developing company) and local public sector authorities covered by the three participant PCT areas. On the 24th March 2010 East and North Hertfordshire PCT Board agreed to provide additional debt financing of £411,000 to Assemble Community Partnership Limited. In return for reduced Partnering Services Fees, resulting in a return on capital of over 30% plus interest at 3% per annum. 30. Other financial assets Current 31 March 31 March 2010 2011 £000 £000 Embedded Derivatives at Fair Value through SoCNE Financial assets carried at fair value through SoCNE Held to maturity investments at amortised cost Available for sale financial assets carried at fair value Loans carried at amortised cost Total

Non current 31 March 31 March 2010 2011 £000 £000

0 0 0

0 439 439

111

31. Other current assets EU Emissions Trading Scheme Allowance Other Assets Total

32. Cash and Cash Equivalents

Balance at 1 April Net change in year Balance at 31 March Made up of Cash with Government Banking Service Commercial banks and cash in hand Current investments Cash and cash equivalents as in statement of financial position Bank overdraft - Office of HM Paymaster General/GBS Bank overdraft - Commercial banks Cash and cash equivalents as in statement of cash flows Patients' money held by the PCT, not included above

31 March 2010 £000

31 March 2011 £000 0 0 0

31 March 2011 £000

0 0 0

31 March 2010 £000

0 0 0

0 0

33. Related party transactions Hertfordshire PCT is a body corporate established by order of the Secretary of State for Health. During the year, other than that declared below, none of the Board Members or members of the key management staff or parties related to them has undertaken any material transactions with the PCT. The partner of the Director of Finance is a GP partner at Haverfield Surgery, which has a GMS contract with the PCT. In addition, she does additional work for the PCT, including but not limited to being a Quality & Outcomes Framework and IM&T assessor. The total paid to the surgery in 2010-11 was £331,000. Neither individual had direct control over how the PCT allocated these funds. During the year local GPs sat on the Board and Executive Committee of the PCT. Payments are made to all practices in the PCT under the GP contract for the

112

provision of GP services and re-imbursement expenses for staff and computing. The GP's on the Board and Professional Executive Committee had no direct control over how the PCT allocated these funds. Details of payments during the year to the Practices of GP's on the Board and Clinical Executive Committee were as follows Dr T Kostick Dr M Edwards Dr M Sandler Dr H Pathmanathan Dr R Walker Dr M Andrews Dr A Davies

Partner at Dr Baxani and Partners Partner at Fairbrook Medical Centre Partner at Davenport House Surgery Partner at Bridge Cottage Surgery Partner at Manor Street Surgery Partner at Dr Henderson and Partners Partner at Maltings Surgery

£000 1,538 1,822 1,877 2,681 1,181 1,151 2,089

Dr M Edwards is also a director of Herts Health Ltd to which the PCT paid £139,000 for patient diagnostic services. The Department of Health is regarded as a related party. During the year the PCT has had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent Department. The PCT has adopted a disclosure level of £10million in 2010-11. These entities are listed below; Payments Receipts to Related from Party Related Party Barnet & Chase Farm Hosp NHST Buckinghamshire Healthcare NHS Trust Cambridge University Hospitals NHS Foundation Trust East and North Herts NHS Trust East of England Ambulance Services NHS Trust Hertfordshire Community NHS Trust Hertfordshire County Council HM Revenue & Customs Imperial College Healthcare NHS Trust Luton & Dunstable NHS Foundation Trust NHS Pension Scheme Royal Free Hampstead NHS Trust Royal National Orthopaedic Hospital NHS Trust South East Essex PCT The Princess Alexandra Hospital NHS Trust University College London NHS Foundation Trust West Hertfordshire Hospitals NHS Trust

£000 67,088 15,407 26,081 238,735 31,523 113,952 123,062 5,738 14,125 18,717 3,489 19,529 10,940 136,028 49,213 20,594 215,269

£000

79 7,318 362

298

Amounts owed to Related Party

Amounts due from Related Party

£000 1,052 340

£000 35

2,117 463 879 13,670 123 461 977 24 289 738 777 4,375 298 543 3,951

2 102 15 12,300 2,599 537

113

172 32

In addition, the PCT has had a significant number of material transactions with other Government Departments and other central and local Government bodies. Where appropriate, these transactions have been reflected in the above table. The PCT has also received revenue and capital payments from a number of charitable funds, all of the Trustees for which are also members of the PCT Board. 33A. Related Party Transactions 2009-10 East and North Hertfordshire and West Hertfordshire PCTs are body corporates established by order of the Secretary of State for Health. During the year none of the Board Members or members of the key management staff or parties related to them has undertaken any material transactions with the PCT. During the year local GP's sat on the Board and Executive Committee of the PCT. Payments are made to all practices in the PCT under the GP contract for the provision of GP services and re-imbursement expenses for staff and computing. The GP's on the Board and Professional Executive Committee had no direct control over how these funds were allocated. Details of payments during the year to the Practices of GP's on the Board and Clinical Executive Committee were as follows: Dr M Andrews: Partner at Dr Henderson & Partners Dr T Kostick: Partner at Dr Baxani & Partners Dr M Hoffman: Partner at Dr Hoffman & Partners Dr P Shilliday: Partner at Garden City Practice Dr Michael Edwards - Partner at Fairbrook Medical Centre Dr Richard Walker - Partner at Manor Street Surgery Dr Roger Sage - Partner at Dr Sage & Partners, Parkbury House Dr Mark Sandler - Partner at Davenport House Surgery

ÂŁ000 1,137 1,401 2,045 1,140 1,720 1,203 2,173 1,680

The Department of Health is regarded as a related party. During the year the PCT has had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent Department. The PCT has adopted a disclosure level of ÂŁ5million in 2090-10. These entities are listed below;

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Barnet & Chase Farm Hosp NHST Buckinghamshire Hospital NHS Trust Cambridge University Hospitals NHS Foundation Trust East and North Herts NHS Trust East of England Strategic Health Authority East of England Ambulance Services NHS Trust Hertfordshire County Council HM Revenue & Customs Imperial College Healthcare NHS Trust Luton & Dunstable NHS Foundation Trust NHS Pension Scheme Royal Free Hampstead NHS Trust Royal National Orthopaedic Hospital NHS Trust South East Essex PCT The Princess Alexandra Hospital NHS Trust University College London NHS Foundation Trust West Hertfordshire Hospitals NHS Trust

Payments to Related Party £000

Receipts from Related Party £000

Amounts owed to Related Party £000

Amounts due from Related Party £000

62,109 15,330

360 0

608 1,207

627 0

23,078 233,404 25

5 4,094 3,980

1,214 9,103 0

1 888 46

32,171 203,107 10,907 10,184 14,073 7,744 16,430 6,754 127,960 46,209

25 3,949 15 0 8 0 43 0 1,137 675

1,045 1,734 488 274 492 0 613 497 2,211 1,465

0 0 5 0 0 0 18 0 1,793 263

19,971 210,175

0 619

536 4,226

0 43

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35. Intra-Government Balances Current receivables £000s Balances with other Central Government Bodies Balances with Local Authorities Balances with NHS Trusts and Foundation Trusts Balances with Public Corporations and Trading Funds Total Intra-Government balances Balances with bodies external to government At 31 March 2011 Balances with other Central Government Bodies Balances with Local Authorities Balances with NHS Trusts and Foundation Trusts Balances with Public Corporations and Trading Funds Total Intra-Government balances Balances with bodies external to government At 31 March 2010

NonCurrent Noncurrent payables current receivables payables £000s £000s £000s

1,736 2,599

0 0

5,750 123

0 0

13,132

30,596

0 17,467

0 0

0 36,469

0 0

7,764 25,231

1,612 1,612

79,569 116,038

0 0

11,716 0

0 0

13,196 1,734

0 0

2,900

26,017

0 14,616

0 0

0 40,947

0 0

10,100 24,716

1,707 1,707

69,845 110,792

0 0

36. Losses and Special Payments The total number of losses cases in 2010-11 was 1, involving a total loss of £90 (2009-10 - 11 cases and £956). There were no clinical negligence cases where the net payment exceeded £100,000 in 20010-11 or 2009-10. There were no fraud cases where the net payment exceeded £100,000 in 20010-11 or 2009-10. There were no personal injury cases where the net payment exceeded £100,000 in 2010-11 or 2009-10. There were no compensation under legal obligation cases where the net payment exceeded £100,000 in 2010-11 or 2009-10.

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There were no fruitless payment cases where the net payment exceeded £100,000 in 2010-11 or 2009-10. Note: The total costs included in this note are on an accruals basis. There were no special payments in 2010-11 or 2009-10. 37. Events after the reporting period The PCT will be recognising the Lister Surgery Centre on its SOFP as an asset with a corresponding liability shown as a finance lease, of approximately £53m on commencement of the services to be provided from the Centre by Clinicenta (Hertfordshire) Limited. These services are expected to commence during 2011-12.

38. Movements in working capital (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories Increase/(decrease) in trade and other payables (Increase)/decrease in other current assets Increase/(decrease) in other current liabilities Total

39. Other cashflow adjustments Depreciation Amortisation Impairments and reversals Cost of Capital Charge Transfer from donated asset reserve Transfer from government grant reserve Non-cash movements in provisions Release of PFI deferred credits Net foreign exchange gain/(losses) Total

2010-11 £000 (1,250) 30 6,297 0 0 5,077

2010-11 £000 3,917 129 0 0 (55) 0 17 0 0 4,008

2009-10 £000 406 (879) 14,716 (1) 33 14,275

2009-10 £000 3,358 0 4,174 124 (54) 0 (1,129) 0 0 6,473

40. Cash flow relating to exceptional items There was no cash flows relating to exceptional items.

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01707 390855 enquiries@hertfordshire.nhs.uk

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Annual Report and Financial Accounts produced by the Communications team 118