TRUST BOARD IN PUBLIC

Date: 24 September 2015 Agenda Item: 4.2

REPORT TITLE: Agency nursing ceiling plan to TDA/Monitor

EXECUTIVE SPONSOR: Fiona Allsop (Chief Nurse)

REPORT AUTHOR: Paul Simpson (Chief Financial Officer)

REPORT DISCUSSED PREVIOUSLY: (name of sub-committee/group & date) Executive Comittee

Action Required:

Approval Discussion Assurance

Summary of Key Issues • Monitor & TDA issued rules on managing agency nursing costs and required all

TDA trusts to submit a plan describing how they will reach the target “ceiling” spend. by 14 September. These plans have been signed off by the Trust’s CFO and Chief Nurse, endorsed by the Executive Team and require approval by the Board.

• Monitor, TDA and the Chief Nursing Officer for England emphasise the importance of trusts and commissioners fulfilling their responsibilities for safe staffing as described in the NICE and National Quality Board (NQB) guidance (including the 10 expectations published in November 2013).

• TDA rules have specifically quantified the nursing costs to be applied as a denominator (registered nurses, so excluding nursing assistants). Using that measure Trust spend on agency was 20% of registered nurse pay spend in M05. The Trust’s target in 2015/16 is 12%.

• This target can be achieved by the end of Q4 2015/16 (the second milestone), but cannot be achieved by the first milestone (Q3). Therefore a formal “application for adjustment to the ceiling trajectory” has been submitted.

• TDA will monitor delivery through their monthly Delivery meetings, and non-compliance sees escalation through a series of steps, including intensive support team input.

• The rules also require the Trust to only use agencies on frameworks notified by TDA: that notification will follow.

Action: The Board are asked to approve the plan.

Relationship to Trust Strategic Objectives & Assurance Framework:

SO2: Effective - Deliver effective and sustainable clinical services within the local health economy SO4: Responsive – Become the secondary care provider and employer of choice for the catchment populations of Surrey & Sussex SO5: Well - led Corporate Impact Assessment:

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Legal and regulatory implications

The main regulators, are as follows:

• External audit (the Grant Thornton for this Trust) gives an opinion on the Trust’s compliance with International Financial Reporting Standards and with NHS accounting conventions – this is not purely financial and deals with procurement, fraud, transparency and legal duties. It also gives a Value for Money Conclusion on the Trust’s ability to put in place arrangements to deliver economy, efficiency and effectiveness in its use of resources.

• The Care Quality Commission registers the Trust according to its compliance with regulations concerning the safety and quality of services

Financial implications The plan enclosed sees a reduction in spend on agency nursing in line with targets set by TDA..

Patient Experience/Engagement No adverse impact is expected

Risk & Performance Management A performance management process is in place in the Trust, including to ensure no adverse impact on quality or safety.

NHS Constitution/Equality & Diversity/Communication No material issues

Attachments: Report paper with appendices

TRUST BOARD REPORT – 24th September 2015 AGENCY NURSING CEILING PLAN FOR SUBMISSION TO THE TRUST DEVELOPMENT AUTHORITY Summary

• Monitor & TDA issued rules on managing agency nursing costs and required all TDA trusts to submit a plan describing how they will reach the target “ceiling” spend. by 14 September. These plans have been signed off by the Trust’s CFO and Chief Nurse, endorsed by the Executive Team and require approval by the Board.

• Monitor, TDA and the Chief Nursing Officer for England emphasise the importance of trusts and commissioners fulfilling their responsibilities for safe staffing as described in the NICE and National Quality Board (NQB) guidance (including the 10 expectations published in November 2013).

• TDA rules have specifically quantified the nursing costs to be applied as a denominator (registered nurses only). Using that measure the Trust spend on agency was 20% of registered nurse pay spend in M05. The Trust’s target in 2015/16 is 12%.

• This target can be achieved by the end of Q4 2015/16 (the second milestone), but cannot be achieved by the first milestone (Q3). Therefore a formal “application for adjustment to the ceiling trajectory” has been submitted (this is attached at Appendix 3).

• Achievement of the plan has been calculated based on measures already being introduced:

o international recruitment;

o the pilot scheme for new bank rates for theatre staff (with agreed agency reduction);

o an assumption on the new agency price cap (5%);

o agreed changes to Godstone/Chaldon templates;

o the impact of the recovery plan ED nursing business case;

o the non-payment of breaks (notified to agencies in August).

• The plan is challenging but realistic, and includes a contingency.

• The Finance & Workforce Committee is receiving reports on agency management, and the Trust has a hierarchy of performance meetings that will monitor delivery. Formal reporting will be through month end financial reports.

• TDA will monitor delivery through their monthly Delivery meetings, and non-compliance sees escalation through a series of steps, including intensive support team input. These escalations are described at Appendix 1.

• The rules also require the Trust to only use agencies on frameworks notified by TDA: that notification will follow.

Action: The Board are asked to approve the plan.

Fiona Allsop Chief Nurse September 2015

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The Plan

The workings behind the Plan are below:

Plan

Nursing Employee BenefitsMonth ending

30-Apr-15

Month ending

31-May-15

Month ending

30-Jun-15

Month ending

31-Jul-15

Month ending

31-Aug-15

Month ending

30-Sep-15

£'000 £'000 £'000 £'000 £'000 £'000

Nursing - Total Agency costs (excluding outsourced bank)

915 883 987 1,174 972 961

Nursing - Total Gross Employee Benefits (including agency)

4,829 4,835 4,764 5,013 4,795 4,933

Nursing agency costs as % of total nursing costs

18.95% 18.26% 20.72% 23.42% 20.27% 19.48%

Monthly actual values

Nursing Employee BenefitsMonth Ending

31-Oct-15

Month Ending

30-Nov-15

Month Ending

31-Dec-15

Month Ending

31-Jan-16

Month Ending

29-Feb-16

Month Ending

31-Mar-16

£'000 £'000 £'000 £'000 £'000 £'000

Nursing - Total Agency costs (excluding outsourced bank)

868 795 754 612 591 606

Nursing - Total Gross Employee Benefits (including agency)

4,966 4,943 4,940 4,825 4,926 5,048

Nursing agency costs as % of total nursing costs

17.48% 16.08% 15.26% 12.68% 12.00% 12.00%

Monthly revised plan values

Nursing Employee Benefits

Month ending31-Aug-

15

Month ending30-Sep-

15

Month Ending 31-Oct-

15

Month Ending 30-Nov-

15

Month Ending 31-Dec-

15

Month Ending 31-Jan-

16

Month Ending 29-Feb-

16

Month Ending 31-Mar-

16£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000

Nursing - Total Agency costs (excluding outsourced bank) 972 961 868 795 754 612 592 604Nursing - Total Gross Employee Benefits (including agency) 4,795 4,933 4,966 4,943 4,940 4,825 4,926 5,048

Nursing agency costs as % of total nursing costs 20.3% 19.5% 17.5% 16.1% 15.3% 12.7% 12.0% 12.0%

ngs:£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000

gency Costs Baseline (MTh 1 - 5 above) 972 986 986 986 986 986 986 986Less:

Philippines Recruitment -10 -49 -63 European Recruitment -49 -185 -219 -219 Theatre Bank - 30% Conversion -53 -53 -53 -53 -53 -53 New Rates - new Contract - assumed 5% -43 -40 -38 -31 -30 ED - Nursing - 50% -33 -33 -33 -33 -33 Godstone -14 -14 -14 -14 -14 -14 -14 Chaldon -11 -11 -11 -11 -11 -11 -11 Improved Rosta ControlNon Payment of Breaks (0.5 hours per shift) -40 -36 -33 -31 -25 -25 Contingency against pressures 40 65

972 961 868 795 754 612 592 604

Reduction in Agency Cost compared to average (MTh 1- 5) -25 -118 -191 -233 -374 -394 -382

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Attached appendices:

Appendix 1 : TDA response to non compliance

Appendix 2: general expectations of trusts and their Boards

Appendix 3: application to adjust ceiling trajectory

Appendix 4: letter to CEO dated 1 September

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Appendix 1 Response to non compliance (Table 4 in Section 6.4)

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Response to non compliance (continued - Section 6.5)

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Appendix 2

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Appendix 3 Application for adjustment to ceiling trajectory

[AS SUBMITTED TO TDA] To be completed by NHS Trusts and NHS Foundation Trusts, signed off by a Finance Director or Board member. Applications will be approved in exceptional circumstances Please respond to agencyrules@monitor.gov.uk by 14 September 2015

Name of Trust Surrey and Sussex Healthcare NHS Trust

Completed by Fiona Allsop

Job title Chief Nurse

Telephone number 01737 7687511 ext 1825

Email address Fiona.Allsop@sash.nhs.uk

Date completed 14th September 2015

Name of Board member and position

Fiona Allsop - Chief Nurse

1) Why are you applying for this adjustment? (Maximum 500 words)

As at the end of August 2015 the Trust’s YTD spend on qualified agency averaged 20% of total spend on qualified nurses. The Trust is fully signed up to the absolute necessity of reducing agency expenditure, and has a robust plan for doing so. The Trust’s plan brings the percentage of agency expenditure down to 12% by Jan 2016 and then down to 10% from 1st April 2016. The Trust has thoroughly reviewed whether this plan could be accelerated even further, but has come to the conclusion that to do so would have significant patient safety implications due to high vacancy rates particularly at Band 5 level nursing and the difficulties in attracting suitably qualified staff locally and nationally with the inherent delays being experienced. .

2) For what period of time are you applying for an adjustment?

The Trust only requires an adjustment for Quarter 3 2015/16. Within Q3 the Trust’s expenditure is planned to reduce from 20% to 16%. In Q4 it then reduces to an average of 12%

3) What is your proposed annual trajectory of nursing agency spend?

Total 2015/16 planned spend = £10,118K Q1 = £2,785K Q2 = £3,107K Q3 = £2,417K Q4 = £1,809K

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Please reflect this proposal in your monthly plan for Q3 and Q4 2015/16, submitted to Monitor/TDA. If this adjustment is not approved, you will need to submit a revised monthly plan to Monitor/TDA.

4) What are your existing measures for controlling agency spend (e.g. rostering)?

• Leaving vacant shifts unfilled where safe to do so • Re-deploying existing nursing staff from alternate areas where safe

to do so • Overseas recruitment - Philippines circa 145 (spread between Nov

2015 and April 2016) • European recruitment - Span and Romania, circa 50 (spread

between Sep 2015 and Nov 2016). • Theatres staff bank rate enhancement • Non-payment of concessionary breaks to agency staff • E-rostering upgrade to facilitate direct booking and improved fill rates

- anticipated launch in December 2015 • National reduction of agency rates • Analysis of rostered patterns of ward managers • Proposal to enhance bank rates for substantive staff in the rest of the

organisation. 5) Please confirm that this application has been discussed with, and approved by,

the Nurse Director. Application completed by Fiona Allsop - Chief Nurse

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Appendix 4

Letter issued to CEO

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[END]