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Annual report and accounts2013/14

Better health for Sunderland

NHS Sunderland CCG Annual Report 2013-14

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NHS Sunderland Clinical Commissioning Group (CCG)

Annual Report 2013-14

Contents

Chair and Chief Officer’s

foreword…………………………….……...………………………………………………. 4

Member Practices’ introduction .............................................................................. 6

Strategic report ......................................................................................................... 9

About us .................................................................................................................... 9

Better Health for Sunderland ................................................................................. 10

Urgent care and long term conditions .................................................................. 10

Mental health .......................................................................................................... 12

Planned care ........................................................................................................... 14

Prescribing .............................................................................................................. 14

Screening and early identification ........................................................................ 15

Practice standards ................................................................................................. 15

Health and Wellbeing Strategy .............................................................................. 15

Improving performance ......................................................................................... 16

CCG assurance framework .................................................................................... 16

NHS Sunderland CCG Balanced Scorecard ......................................................... 16

Engaging with our patients and the public .......................................................... 23

Promoting good health .......................................................................................... 25

Sustainability and the environment ...................................................................... 26

Equality and diversity ............................................................................................ 27

Members report ...................................................................................................... 31

Details of members of the membership body and governing body ................... 31

Pension liabilities ................................................................................................... 35

Sickness absence data .............................................................................................. 36

External audit.......................................................................................................... 36

Disclosure of serious untoward incidents ........................................................... 36

Cost allocation and setting of charges for information ...................................... 36

Principles for Remedy ............................................................................................ 36

Employee consultation .......................................................................................... 37

Disabled employees ............................................................................................... 37

Emergency preparedness, resilience and response ........................................... 37

Statement as disclosure to auditors ..................................................................... 37

Remuneration Report ............................................................................................. 38

Membership body and Governing body profiles ................................................. 44

Statements by the Accountable Officer ................................................................ 51


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Governance statement ........................................................................................... 52

Report by the Auditors to the members of the CCG ........................................... 94

Appendix 1 - Annual Accounts.............................................................................. 98


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Chair and Chief Officer’s Foreword

We are delighted to introduce this first annual report for NHS Sunderland CCG. It

marks a significant milestone in our organisation’s development after its first year as

a statutory NHS body and reflects the vast amount of time, effort and hard work from

member practices, staff and partners to fully establish the CCG and begin to make

progress towards Better Health for Sunderland.

Over the last year we have built networks and developed collaborative working

across the region. It is important for us to work closely with our partners in

healthcare, the council, Health and Wellbeing Board and with local voluntary and

community groups, as well as developing relationships with our patients.

We have organised regular discussions with fellow CCGs across the North East and

with Northumberland Tyne and Wear NHS Foundation Trust (NTW) and NHS

England’s Cumbria, Northumberland, Tyne & Wear Area along with the NHS

England Area team and the North of England Commissioning Support Unit, attending

forums to promote collaborative working across the CCGs.

As a member of the Sunderland Partnership Board, we collaborate with partners

from City Hospitals Sunderland NHS Foundation Trust, Sunderland Council, the

university, city college, and Northumbria Police. Through this, and as members of

the Sunderland Health and Wellbeing Board, we are able to work together to plan

strategically plan for the benefit of the whole of the city of Sunderland.

We value community input in local healthcare matters and we encourage patient

participation and feedback at all levels. Our Local Engagement Boards and Locality

Patient Groups provide a forum where we can communicate with patients, carers,

and the public. So far feedback from the local community has informed

developments in mental health in Sunderland, the future procurement of out of hours

and minor injuries services and medicines optimisation as well as how to build

integrated community teams to help ensure our local residents receive a more joined

up service from both health and social care teams.

We have also been working on the NHS Call to Action, discussing the challenges

facing the NHS over the next few years. In Sunderland we are using this as part of

our planning process to review progress against our plans, revisit our priorities and

revalidate plans with stakeholders.

Over the last year there have been many successes for our CCG. We were delighted

to have received praise for our support of the transition process and as part of the

Winterbourne View review programme. Two of our staff were finalists in the North


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East Leadership Recognition Awards and we achieved an excellent 100% response

rate in the national staff satisfaction survey.

In 2013/14, we made real and significant progress as we completed authorisation,

became a statutory body and have begun to stand on our own feet. Most importantly,

because of this, we are starting to make a difference for our local communities.

We share a passion for improving the health and health services for the people of

Sunderland and in introducing this annual report we would like to thank everyone

who has contributed to our first year, no matter what that contribution has been. We

look forward to your continued support into our second year to meet the many and

varied challenges that lie ahead.

David Gallagher Dr Ian Pattison

Clinical Chair Chief Officer


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Member Practices’ introduction

After our first full year of operation, we are pleased to present our first annual report

and accounts. It has been an exciting year, which has been full of both opportunities

and challenges.

As NHS Sunderland Clinical Commissioning Group (CCG) we are responsible for

commissioning the majority of health services for our population of 281,500 people

and this is expected to increase by at least 8,100 over the next 20 years.

Large increases in the elderly population, and particularly the very elderly, have

significant implications for healthcare over the next five, ten and twenty years.

Sunderland’s community is also affected by lifestyle factors such as obesity, smoking

and alcohol abuse which pose a major risk to health and wellbeing.

The major health challenges are consistent across our groups of practices

(localities). They include: a growing aging population with escalating health needs;

poor health compared to the rest of the UK; excess deaths, particularly from heart

disease, cancer and respiratory problems; an over-reliance on hospital care;

separated healthcare and health inequalities across the city.

Our vision is ‘Better Health for Sunderland’ and to achieve this, we work with

partners to provide joined-up health and social care, underpinned by effective clinical

decision-making, and reducing the inequalities in health across the city.

Linked to our vision, we have set a number of strategic objectives in our shadow

year and carried them through into our first full year of operation as a statutory CCG.

These include:

● Playing an active role in the delivery of the health and wellbeing strategy

● Every practice to optimise screening and early identification opportunities

● An integrated tiered approach to mental health across the whole healthcare

system

● An integrated urgent care response, easily accessible at the appropriate level

● Improving quality of care for long-term conditions across the whole system

● Providing more planned care closer to home

● Facilitating every practice to systematically improve the quality of prescribing

adhering to evidence based guidelines

● Encouraging every practice to operate to agreed standards and pathways –

working collaboratively with partners

We work closely with Sunderland City Council and our main health service providers

including City Hospitals Sunderland NHS Foundation Trust, Northumberland, Tyne


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and Wear NHS Foundation Trust, South Tyneside NHS Foundation Trust and North

East Ambulance NHS Foundation Trust.

We have recently reviewed our vision and set new strategic objectives for the next

five years which outlines our long term vision and our focus on the people living in

Sunderland, however, this annual report focuses on the past year.

This last year has seen many changes to the health and care landscape in

Sunderland, including the national changes to the commissioning of health service.

The move from practice-based commissioning consortia into clinical commissioning

groups has for example brought with it a few challenges, but with the support of our

practices, we believe our clinical commissioning group is starting to show real

successes for the local population.

We have taken the time to engage with our members and staff, and we were

delighted to have a 100% response rate from our staff to the national staff survey.

We have been working with partners to develop new ways of working that focus on

the integration of care, provide better support at home and earlier treatment in the

community to prevent the need for emergency care or care home admission.

We will improve services further as we continue to integrate health and social care

around the use of the Better Care Fund, which helps us to pool monies across health

and social care and provides patients with better support where and when they need

it irrespective of which agency is responsible for the funding.

Some of our locality innovation includes our Washington locality improving health

input into local schools in order to help young people to understand their rights to

access healthcare and which services are available.

We have also offered, the flu vaccination to all primary school aged children in some

areas.

Working closely with City Hospitals Sunderland NHS Foundation Trust where we

have commissioned a ‘hot’ neurology clinic which will allow rapid access for those

with certain neurological conditions, as well as a fracture liaison service that will

provide secondary prevention assessment and fracture management.

We have spent time interacting with our community by running a series of public

engagement events and listening exercises including the NHS Call to Action, where

local people have their say about their experiences of their healthcare provision and

offer their thoughts on our proposed plans for the future. We have also supported a

number of high profile health campaigns, developed to increase awareness of

symptoms, improve wellbeing and promote local healthcare services.


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Over the last year we have started to strengthen our relationship with local people by

establishing a number of ways in which patients, carers and the public can influence

our decision-making. Examples include patient participation groups, locality patient

groups, local engagement boards, engagement events, through social media and by

joining our public membership group ‘MY NHS’ where they receive updates on our

services, invites to consultations and events and opportunities to get involved with

their local NHS services.

We are determined to involve the people of Sunderland as much as possible as well

as strengthening our partnerships to ensure a whole city response to local needs

and achieving better health and wellbeing for the people living in Sunderland.

The annual report reflects on our progress and performance throughout the year and

gives details of the impact our members have had in key areas. The report also

includes information about how the Governing Body have evaluated their

performance and this information can be found in the governance statement.


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Strategic report

Welcome to NHS Sunderland Clinical Commissioning Group’s (CCG) first

Annual Report covering our inaugural year 2013/2014

About us

We are NHS Sunderland Clinical Commissioning Group (CCG) which is the statutory

health body responsible for the planning and buying of NHS services to meet the

needs of the local community. We are a membership organisation and our members

are 53 GP practices. To enable more effective engagement in the work of the CCG,

the practices are organised into five localities: Coalfield, Sunderland North,

Sunderland East, Sunderland West and Washington, and together we cover a

population of around 281,500.

As NHS Sunderland CCG, we became a statutory body on 1 April 2013 following the

changes described in the Health and Social Care Act 2012. We formed to take over

the commissioning of the majority of health services including planned and

emergency hospital care, rehabilitation, community and mental health and learning

disability services. We also commission emergency and urgent care services

throughout the city and services for any patients not registered with a general

practice who live locally.

Our vision is to achieve ‘Better Health for Sunderland’. We aim to improve the health

and wellbeing of local people, so they live longer, with a better quality of life. We will

do this by reducing the differences in health between people and communities, join

up services better across health and social care - all underpinned by effective clinical

decision making.

To respond to our health challenges, a joint assessment of local needs with

Sunderland City Council identified the following priorities for partners to address in

order to achieve the city vision of Excellent Health and Wellbeing:

1. Tackling unemployment

2. Improving educational attainment

3. Reducing overall smoking prevalence (all ages) and numbers of young people

starting to smoke

4. Reducing levels of obesity

5. Reducing overall alcohol consumption and increase treatment services for those

with problem drinking

6. Commissioning excellent services for cardiovascular disease including diabetes

7. Commissioning excellent services for cancer

8. Commissioning excellent services for chronic obstructive pulmonary disease

9. Commissioning excellent services for mental health problems


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10. Raising the expectation of being healthy for all individuals, families and

communities and promoting health-seeking behaviours

In order to keep our priorities current, we refresh these each year.

To address these priorities we have been and will continue to work closely with the

local community and we currently engage with a wide range of local partners

including the City Council, the business community, community and voluntary sector

and clinicians to ensure the very best health and social care for our patients.

We have worked closely with Sunderland City Council, and sit with other partners on

the Sunderland Health and Wellbeing Board. We have developed relationships with

Healthwatch Sunderland, a new local independent body, who ensure that the views

of people who use health and social care services are heard. We regularly engage

with the community and voluntary sector as they provide an important voice for

patients, and invaluable insight into the health challenges faced by local people.

We will use all of our clinical and managerial expertise, knowledge of our patients,

our relationships with other NHS organisations, our local authority, local hospitals

and other partners to follow best practice and use evidence-based medicine to

commission health services that will ensure “better health for Sunderland”.

Better Health for Sunderland

Our strategy to deliver our vision has focused initially on seven areas:

● Urgent care and long term conditions

● Mental health

● Planned care

● Prescribing

● Screening and early identification

● Practice standards

● Health and Wellbeing Strategy

During our shadow year, when our strategy was developed and then over our first

full year of operations we have delivered key milestones on the way to achieving our

strategic objectives as outlined below.

Urgent care and long term conditions

A strategy for urgent care was agreed that will lead to the reshaping of local services

to ensure people are seen in the right place, at the right time and by the right staff.

Delivery of the strategy to date includes a completed public consultation to discuss a

new minor injury unit (MIU) and integrated A&E model.


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A key procurement process has taken place and a contract will be awarded this

summer with mobilisation of the Urgent Care Centre services in Bunny Hill,

Washington and Houghton from September 2014 and the next steps of this work will

be to further develop the enhanced service at City Hospitals Sunderland supporting

the relocation of the existing Grindon Lane Minor Illness and Injury Unit to the Royal

Hospital.

We held a successful ‘A&E big front door’ workshop designed with partners to help

them develop the new A&E service. This work will be continued in the coming year.

Also closely linked to this is the procurement of GP out of hours services which is

underway and will mobilise from March 2015.

Other key developments relating to urgent care over the past year include:

● Establishing strong links between the reform of the urgent care system and

the reform of chronic obstructive pulmonary disease (COPD) pathway to

reduce emergency admissions, readmissions and the length of hospital stay

through the development of a greater integrated preventative approach.

● Introducing a standard emergency assessment pro forma for GPs to use

before sending a patient to secondary care for assessment or admission. This

includes an Early Warning Score (EWS) to increase GP awareness of any

alternative services which could be used to manage the patient in the

community so that the patient receives the right care, in the right place at the

right time.

● Implementing a community-based cellulitis pathway to allow suitable patients

who require intravenous (IV) antibiotics to be treated in the community instead

of triggering a hospital admission.

● Implementing a community-based anticoagulation initiation and monitoring

service and rolled out software to ensure patients are identified and treatment

commenced for those at risk of stroke.

● Creating and improving the intermediate care hub, a single point of access for

intermediate care

● Piloting schemes to reduce emergency readmissions including seven day

services

● Rolling out the GP in A&E pilot into the new integrated A&E.

● Reviewing same day access to Primary care.

● Working with City Hospitals Sunderland NHS Foundation Trust (CHSFT) to

implement an ambulatory care (ACP) pathway model to prevent people being

admitted to hospital where more appropriate alternative responses could be

organised to meet particular needs.

Community multi-disciplinary teams in each Locality

We have begun to look at how to work with members of professional health and

social care teams, including community nursing teams, mental health, social work


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and allied healthcare professionals, together as a community team in a locality and

to plan how they will successfully collaborate in order to support complex patients

and carers in the city. This is in response the common feedback from patients,

carers and staff about the lack of co-ordination of care and the fragmented/confusing

array of services. We are gathering feedback from our local community, patients

and GP practices and this will be inform the final model which is aimed at improving

the co-ordination of care for complex patients and ensuring it is person-centred.

Enhanced care in care homes

The Coalfields locality has been piloting an approach to improve the health care that

patients receive in care homes and extra care schemes.

We are currently working to involve all community services in a multi-disciplinary

team approach and to link-in with the community teams, to enable the pilot to be

rolled out across the whole city by 2015. The pilot focuses on more proactive and

preventative care following full assessment of the needs of the residents and

supporting the staff in the home to enable residents to be cared for in the home

rather than be admitted to hospital where this is inappropriate. Specialist nurses are

being appointed for a year and they will co-ordinate the different professionals

involved, based around the needs of their patients. Early signs are encouraging.

Readmissions avoidance collaborative (RAC) We have also started a new way of coordinating the discharge of patients from City

Hospitals Sunderland NHS Foundation Trust with support tailored for the care they

need. This is known as the Readmissions Avoidance Collaborative (RAC) and it is

preventing delays for patients being discharged, also ensuring the discharge is

timely as care and support is put in place for patients.

Patients are identified that would benefit from early supported discharge and in

particular those who are at high risk of readmission.

The RAC has helped to reduced readmissions from 35 per week during 2012/13 to 5

during 201314.

Mental health

Working closely with Northumberland, Tyne and Wear NHS Foundation Trust our

main provider of specialist mental health services, we have made some big changes

this year as part of a programme to significantly improve services for people with

mental health problems in Sunderland. These include:

● The launch of mental health liaison in Sunderland Royal Hospital - specialist

mental health support for hospital staff to manage their response to people

with a mental health need, both in A&E and on the acute wards.

● Supporting the building of the new psychiatric facilities – Hopewood Park


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Hospital in Ryhope and the Centre for Dementia Care at Monkwearmouth.

● Establishing and embedded a memory protection service and better

identification of people with dementia.

● Establishing a psychological therapy and counselling service (IAPT) in

primary care.

● Extending further access to primary care mental health services for people

with long-term conditions.

● Establishing an Initial Response Team for urgent mental health needs to

make it as easy as possible for patients and professionals to access specialist

help in the community.

● Improving children and adolescent mental health services.

● Ensuring more people with learning disabilities and severe mental health

needs have physical health checks

● Improving community mental health pathways to support better care out of

hospital.

● Developing a suicide prevention strategy and directory of wellbeing support

extending Health Champions training to include mental health needs.

● Reviewing and agreeing care packages for patients with learning disabilities

who are out of area in response to the Winterbourne review.

We are also working on increasing mental health wellbeing through community non-

clinical links.

Mental health support for people with long term conditions Depression and anxiety are two to three times more common in those with a chronic

physical health problem. People with long term conditions may benefit from

psychological therapies, with improved outcomes for their physical condition as well

as their mental health.

Treating depression and/or anxiety can improve a patient’s quality of life and their

management of their long term health condition. There are also clear links between

investing in treating co-morbid mental health and physical health problems, helping

make the best use of NHS resources.

We are ensuring the provision of psychological therapies and life adjustment

interventions for people with a range of long term conditions including for example,

chronic obstructive pulmonary disease (COPD), diabetes, and arthritis. These

interventions are offered through group and or one to one sessions, depending on

the presenting condition and level of need.

Learning Disabilities

The Transforming Care Report issued by Central Government in response to the ill

treatment of people with learning disabilities in Winterbourne View (a private

specialist hospital in Bristol), required significant actions across the NHS and Local


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Government. In Sunderland, we responded to the necessary local actions by

involving people with learning disabilities and families and working collaboratively

with the Council and providers. Those well established relationships ensure that

there is a positive response to the needs of people with learning disabilities in

specialist hospitals who will require to be discharged at some stage. The

Sunderland process was commended as good practice by the Director of the

National Joint Improvement Programme.

Planned care

One of our key objectives is to provide more planned care closer to home, offering

joined-up health and social care provision, so that patients see the right person with

the right skills, at the right time, in the right place, and allowing patients to be seen at

the best time for them whilst aiming to avoid overuse of hospital resources.

In the last year we have:

● Procured services for people with acquired brain injury.

● Reviewed and improved existing cardiac pathways including the arrhythmia

service.

● Reviewed and improved a range of outpatient pathways including early

arthritis, cardiology, urology and the musculoskeletal service.

● Delivered primary care in accordance with NICE (National institute for Care

and Excellence) COPD (chronic obstructive pulmonary disease) standards.

Prescribing

We want to ensure that medicines prescribed to people in Sunderland are as

clinically effective, safe and cost effective as possible. We are encouraging our

member practices to follow evidence-based guidelines and over this last year we

have:

● Appointed a GP prescribing lead to support the implementation of a

Prescribing Incentive Scheme to support practices in achieving quality

improvements and deliver quality improvement as well as financial savings.

● Procured a new medicines management provider to ensure optimum use of

medicines.

● Developed the medicines management work plan for this new provider

● Increased repeat dispensing.

● Rolled out prescribing guidelines.

● Become more involved in the development of new pathways and patient

safety agenda, e.g. healthcare associated infections (HCAI).

Our medicines optimisation team has been working closely with our prescribing

leads, to discuss practice prescribing data, with a view to identifying ways each

locality can support delivery of the prescribing objectives and we are want to ensure


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that prescribing data will be discussed on a regular basis in the future.

Screening and early identification

Our objective is that every practice will optimise screening and early identification

opportunities in order to prevent people becoming ill or in the case that the patient is

already ill then we aim to begin treatment as quickly as possible.

Some of our initiatives including the use of Health Checks to as part of the early

screening, develop best practice in relation to dementia and falls to support people to

live independently, and implement new approaches to people living in care homes

and extra care facilities.

Practice standards

We encourage each of our 53 practices to operate to agree standards and pathways

and we actively promote working collaboratively with partners. Over each of the last

two years we have supported practices to undertake peer reviews of their work and

as a result shared information with them on current pathways and used their

feedback on how these pathways can be improved e.g. Cellulitis pathway, COPD

pathway. We also support major teaching events every two months which bring

together all practices and focus on various clinical education areas which support

standard pathways. Recent events have included a focus on dermatology,

neurology and dementia.

We also have approximately 20 GPs and nurses who have been willing to act as

clinical leads on behalf of all practices and have engaged with partners, using their

generalist clinical knowledge and experience, to improve a range of pathways

including dementia services, musculoskeletal issues, mental health, diabetes and

cancer.

Work over the last year on supporting health checks for people with learning

disabilities has led to a 50% increase in the number of practices undertaking the

checks.

Health and Wellbeing Strategy

One of our strategic objectives was to contribute to the delivery of the Sunderland

Health and Wellbeing Strategy and much of this annual report covers examples of

our contribution. We also lead on one of the six strategic objectives in relation to

improving the quality of life for people with long term conditions. Examples of

achievements in this area have already been outlined above. Our GP chair, chief

officer and another executive GP are active members of the Health and Wellbeing

Board in the city, working with partners to oversee the development of excellent

health and wellbeing for local people.


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Improving performance

As described above, we have worked hard over this last year to ensure improvement

in services we offer for patients and meet local and national performance targets.

The following pages set out a few of our highlights.

CCG assurance framework

All CCGs are assessed by NHS England to ensure they are able to commission

safely, use their budgets responsibly and exercise their functions to improve quality,

reduce inequality and deliver improved outcomes within their available resources.

The process for this consisted of quarterly checkpoints and an annual assessment to

focus on the broader measures of organisational health. The outcomes from our first

six months assurance review are set out below.

The final assurance published by NHS England focused on the six domains of

effective clinical commissioning. Following a review in quarter three, NHS England

were assured we were meeting our responsibilities under each of the six domains.

Quarter four review will take place in June 2014.

NHS Sunderland CCG Balanced Scorecard

The balanced scorecard outlines, at a high level, our progress against five of the

domains. The diagram below shows the end of year position for the CCG.


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NHS Sunderland Clinical Commissioning Group

Balanced Scorecard

Domain 1: Are local people getting good

quality care?

AMBER/GREEN

Rated as Amber/Green due to MRSA and CDIFF at all three

Providers and CHS were flagged as an outlier for Mortality in

October and November. Serious Incidents remain outside of the

quarterly assessments. 1 Never Event for Spire Healthcare which

is being investigated.

Domain 2: Are patient rights under the NHS

Constitution being promoted?

AMBER/GREEN

This is currently rated as Amber/Green as per the Interim CCG

Assurance Framework guidance. Although the Cancer 62

U p g r a d e indicator is rated as Amber, this has no national

operational standard. Ambulance Handovers are also rated as

red and are not included within the quarterly assessments. A&E 4

Hour Waits at CHS finished 2013/14 under target and remains a

risk going into 2014/15.

Domain 3: Are health outcomes improving for

local people?

AMBER/RED

Rated as Amber/Red due to a number of indicators being off track

although data for a number of indicators are out of date due to none

availability of current data. The CCG had no cases of MRSA but

finished above trajectory for C Diff, despite significant improvements

from November. Plea e note that local data and intelligence rather

than published data and are only a guide to performance.

Domain 4: Are CCGs commissioning services

within their financial allocations?

GREEN

Domain 5: Are conditions of CCG

authorisation being addressed and removed

(where relevant)

GREEN

This Balanced Scorecard is based on data currently available. Please note that some indicators are local indicators and are

not taken into account when it comes to overall Domain ratings. These are highlighted in the commentary.

The key headlines for performance are:

Accident and Emergency: the CCG achieved 96.2% against the 95%

standard for over 4 hour waits overall. Pressures around staffing and

capacity have been present throughout the year at City Hospitals

Sunderland NHS Foundation Trust (CHS). The CCG has supported CHS

in a number of initiatives to increase staffing and capacity, including

funding a number of re-admission avoidance schemes and over the winter

period. However, A&E at CHS remains a key risk for 2014/15.

Ambulance Handovers: although the CCG has seen significant

improvement in reducing the number of handover delays during 2013/14,

the levels of delays were still higher than expected. The CCG funded a

joint incentive scheme between CHS and the North East Ambulance

Service NHS Trust to improve the handover process and will continue to

work closely with both organisations' to further reduce the number of

handover delays.


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Healthcare Acquired Infections (HCAI): 2013/14 was a challenging year

for the CCG and CHS for HCAI. The latter half of the year saw a

significant improvement in the number of C.Difficile infections in both the

community and CHS. Although both the CCG and CHS finished above

trajectory, both were significantly lower than 2012/13.

Emergency Admissions: the CCG had a number of emergency care

related outcome based targets such as:

non-elective admissions

unplanned hospitalisation for chronic conditions that should

usually be treated outside of hospital

unplanned hospitalisation for asthma, diabetes and epilepsy in

under 19s

emergency admissions for acute conditions that should not

usually require hospital admission

emergency admissions for children with Lower Respiratory

Tract Infections

emergency readmissions

The provisional data available at the time of publishing this report shows a

reduction in the number of emergency admissions into secondary care on

the previous year and achievement of a number of nationally set targets.

Local Quality Premium Indicators: the CCG chose three local quality

improvement indicators for 2013/14. These were:

People with Chronic Obstructive Pulmonary Disease (COPD)

and Medical Research Council (MRC) Dyspnoea Scale ≥3

referred to a pulmonary rehabilitation programme

Emergency readmissions to hospital within 30 days

Repeat dispensing as a percentage of all items prescribed

The COPD pulmonary rehabilitation and repeat dispensing indicators have

achieved the locally set quality target. Emergency Readmissions is on

track to achieve the target but this will not be confirmed until later in the

year due to the availability of nationally published data.

NHS Sunderland CCG Annual Report 2013/14

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NHS Constitution

A&E 4 Hour Waits for the Sunderland Health Community

Ambulance Handovers

Cancer Waiting Times – 2 Week Waits

NHS Constitution Measures Latest Data Actual To Date 2013/14

Target To Date

A&E waits % patients spending 4 hours or less in A&E or minor injury unit - City Hospitals Sunderland Mar-14 - YTD 94.4% 95.0%

% patients spending 4 hours or less in A&E or minor injury unit - South Tyneside NHS FT Mar-14 - YTD 98.6% 95.0%

% patients spending 4 hours or less in A&E or minor injury unit - CCG Composite Mar-14 - YTD 96.2% 95.0%

No waits from decision to admit to admission (trolley waits) over 12 hours Mar-14 - YTD 0 0


Target To Date

Ambulance Targets Ambulance: Cat A calls responded to <8 mins (Red 1 - Critical) Mar-14 - YTD 82.2% 75.0%

Ambulance: Cat A calls responded to <8 mins (Red 2 - Serious) Mar-14 - YTD 82.1% 75.0%

Ambulance: Cat A calls resulting in an ambulance arriving at the scene within 19 minutes Mar-14 - YTD 98.4% 95.0%

All handovers between ambulance and A & E must take place within 15 minutes and crews should be ready to accept new

calls within a further 15 minutes Mar-14 - YTD 1,263 0


Target To Date

Cancer waits - 2 week % patients seen within 2 weeks of urgent referral for suspected cancer Mar-14 - YTD 94.8% 93.0%

% patients seen within 2 weeks of urgent referral for breast symptoms Mar-14 - YTD 94.6% 93.0%

Trend

Trend

Trend


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Cancer Waiting Times – 31 Day Waits

Cancer Waiting Times – 62 Day Waits

Referral to Treatment – 18 Weeks


Target To Date

Referral to treatment waiting times for non-urgent consultant-led treatment

18 Week Referral to Treatment Waiting Times - Admitted (adjusted) pathways Mar-14 - YTD 92.2% 90.0%

18 Week Referral to Treatment Waiting Times - Non-admitted pathways Mar-14 - YTD 98.4% 95.0%

18 Week Referral to Treatment Waiting Times - Incomplete Pathways Mar-14 - YTD 95.0% 92.0%

52 Week Referral to Treatment Waiting Times Mar-14 - YTD 2 0

52 Week Referral to Treatment Waiting Times - Non-admitted Mar-14 - YTD 1 0

52 Week Referral to Treatment Waiting Times - incomplete pathway Mar-14 - YTD 0 0


Target To Date

Cancer waits - 31 days

% patients treated within 31 days of cancer diagnosis Mar-14 - YTD 98.4% 96.0%

Cancer diagnosis to treatment waiting times (31 day subsequent treatment surgery) Mar-14 - YTD 99.4% 94.0%

Cancer diagnosis to treatment waiting times (31 day subsequent treatment drugs) Mar-14 - YTD 100.0% 98.0%

Cancer diagnosis to treatment waiting times (31 day subsequent treatment radiotherapy) Mar-14 - YTD 98.5% 94.0%

Trend


Target To Date

Cancer waits - 62 Days

% patients treated within 62 days of urgent referral for suspected cancer Mar-14 - YTD 85.0% 85.0%

% patients treated within 62 days of urgent referral from NHS Cancer Screening Programmes Mar-14 - YTD 97.9% 90.0%

62 day wait for first treatment for cancer following a consultants decision to upgrade the patient priority Mar-14 - YTD 75.0% 85.0%

Trend


21

Outcomes Framework

Sunderland CCG Local Quality Indicators

Please note: emergency readmissions information is not published for 2013/14 until late 2014/15.

Local Quality Premium Indicators Repeat dispensing as % of all items prescribed Mar-14 - YTD 29.3% 27.5% People with COPD and Medical Research Council (MRC) Dyspnoea Scale ≥3 referred to a pulmonary rehab programme Mar-14 - YTD 29.3% 22.3%

Emergency readmissions to hospital within 30 days May-13 - YTD 10.8% 13.0%

Healthcare Acquired Infections

Healthcare Acquired Infections Number of MRSA infections for local CCG residents Mar-14 - YTD 0 0 Number of Clostridium Difficie infections for local CCG residents Mar-14 - YTD 88 79


22

Urgent Care

Mental Health

Estimated diagnosis rate for people with dementia Mar-14 - YTD 61.8% 60.5% Proportion of people with depression and/or anxiety disorders with access to psychological therapies Mar-14 - YTD 12.4% 12.0% The number of people accessing IAPT who are moving to recovery Mar-14 - YTD 47.4% 50.0%

Urgent Care Outcome Indicators

Mental Health Indicators


23

Engaging with our patients and the public

Seeking views and listening to patients, their carers and the public is at the core of how

we want to develop and improve health and healthcare services in Sunderland.

We are always looking for ways to widen our community engagement and participation.

Through a wide range of activities including surveys, meeting groups, formal

consultations and events we make sure our communities are aware of and consulted in

any decision-making, allowing us to act on healthcare priorities from a local perspective.

Over the year we have developed a variety of ways that patients, carers and the public

can get involved with our work:

Patient participation groups (PPG)

These groups have been set up to give local people a say on how their local GP surgery

services can be improved. Involvement can take different forms, from attending

meetings to being part of a ‘virtual group’.

Locality patient groups

The five localities have each established locality patient groups, where patients and

carers from each area can meet together to discuss their health and social care

experiences and priorities, allowing us to gain a perspective from the local community

and tailor our healthcare provision to meet patient needs.

Local engagement boards

We continue the city-wide Local Engagement Boards (LEB) throughout our five

localities. The LEBs provide a forum where we communicate with patients, carers, and

the public and give our local communities the opportunity to share their opinions and

influence decision-makers from the CCG, allowing them to contribute directly to

decisions affecting healthcare provision. Topics have included improving healthcare for

people in residential and nursing care homes, an intermediate care strategy in

Sunderland and exploring options for engaging the public and we will use feedback from

the LEBs when developing our plans for this area.

My NHS

Towards the end of the year we started to roll out My NHS, which is a “membership” for

local patients. By signing up to ‘My NHS’ local people can influence decisions about

their healthcare, receive updates about local service, be invited to events held by the

CCG and have an opportunity to give their views about any specific areas of healthcare

that interest them.


24

Public events

NHS Sunderland CCG organised a series of events over the year which were open to

the public. We used these public engagement events to ask local people to express

their views on our commissioning priorities for the next few years and as a forum to

discuss the NHS Call to Action and also as a way of consulting with local people about

proposed changes to their healthcare services.

NHS Call to Action

Sunderland CCG is working with NHS England to involve patients, the public and staff in

a discussion about the future challenges facing the NHS and how local services might

change in order to deal with increasing demand and rising costs. So far we have held

two events to discuss the call to action with around 80 members of the public attending

one event and providing us with useful feedback.

On-going engagement

We are currently working with members of public to understand why some patients go

to A&E when there are other more appropriate NHS services available. Each year the

A&E department in Sunderland sees approximately 92,000 patients, an average of

more than 250 patients each day. It is believed a large proportion of these patients

could have been treated safely and effectively by other services or self-treated with

basic first aid and advice. This engagement will give us insight into how best to raise

awareness of the other services that are available.

We also recently undertook a formal procurement process following the outcome of a

consultation we carried out in 2012, beginning the procurement process for the Bunny

Hill, Washington and Houghton GP-led Walk in Centres, and for the out of hours

service.

We are in the process of engaging with people who have complex needs and their

carers about how best to co-ordinate their care across professions and agencies to

ensure it is person-centred, less fragmented and more effective. The outputs will inform

the final model of community based multidisciplinary teams in each locality focusing on

a much better response to complex patients and a better value for money.

Governing body meetings

Our governing body meetings are open to the public so that they can observe the

governing body at work and we offer a ‘question time’ when members of the public can

ask questions and make comments on items on the agenda.


25

Social media

We have begun in 2013/14 to explore new and varied ways of communicating with local

people and decided to make use of social media as a communication tool, e.g. twitter,

providing the local community with a platform to voice their opinions on our health and

social care services. Towards the end of the year we launched our new website which

will help us use social media more effectively.

Promoting good health

We have supported a number of high profile health campaigns over the year, developed

to increase awareness of symptoms, improve wellbeing and promote local healthcare

services.

The Keep Calm campaign, which reached a projected 1.38m people, addressed the

increasing demand for NHS services during the winter months and advised local people

to treat a range of common winter ailments by keeping a well-stocked medicine cabinet

at home, calling 111 or by speaking to their local pharmacist - with no need to see a

doctor or nurse.

We have been particularly keen to ensure good public understanding of the keep calm

messages as in Sunderland of the 75,522 people who visited A&E, 15,226 left without

having required any treatment and 11,436 received only minor treatment that could

have been carried out at home, by calling 111 or by self-care.

We have been actively encouraging patients to use the 111 service rather than visiting

A&E to lessen the strain on this overused service. Feedback from patients who have

used NHS 111 has been extremely positive. Our most recent survey showed that 98%

of people who had used NHS 111 in the North East were happy with the service they

had received.

The My Medicines, My Health campaign was targeted at people over 60 years old with

long-term medical conditions, encouraging them to better understand and take control

over their medication. ‘My Medicines, My Health’ urged people to value the medicine

they have been prescribed for their health condition by keeping them safe together in

one place and in one bag - ‘a green bag’ and to take them with them for key medical

appointments such as visits to hospital. Being in control of their medication and

managing their own health condition has been shown to have a beneficial effect on

patients.

The campaign was shown on regional TV adverts, radio, social media, and in shopping

centres.


26

We also supported Be Clear on Cancer, a national campaign to raise public awareness

of symptoms of cancer and encourage people with symptoms to see their GP earlier

focusing on people with possible symptoms of lung cancer.

We also support the flu vaccination campaign every year, to remind those who are at

risk of seasonal flu to attend their clinics for their flu jabs.

We have also been working with Sunderland City Council in order to help lower levels of

obesity in our communities. This is a key priority for us and we have been encouraging

people who may be overweight to visit their GP to get advice and support on eating

healthier foods and starting an exercise programme.

We encouraged local people not only to get fit but to give up smoking with the

Stoptober challenge. This national campaign challenges smokers to give up for just 28

days. Findings showed that those that gave up for 28 days were five times more likely to

stop for good and after last year’s challenge over 160,000 people in the UK managed to

give up smoking.

Speak out safely campaign

We are also dedicated to the wellbeing of our staff; therefore support the principles of

the Nursing Times Speak Out Safely campaign. This means we believe that every

member of our staff, our member practices and the staff employed by those health and

care organisations that we commission services from should feel able to raise concerns

about wrongdoing or poor practice when they see it and be confident that their concerns

will be addressed in a constructive way.

Sustainability and the environment

Our developing Sustainable Development Strategy will set out our commitment to work

in ways which maximise the health, social and economic benefits our activities bring to

the community while minimising our impact on the environment. Earlier in 2013/14 we

had planned to move to new premises and delayed progressing the detail of this work

until the move had taken place. We have subsequently agreed to maintain what was our

temporary accommodation and refurbish it. Having done this at the end of 2013/14 we

are now in a position to accelerate this work.

Sustainable development requires us to be mindful of the need to safeguard the future

in all of our choices, decisions, and actions. Wherever possible the CCG and individuals

take opportunities to contribute positively to the local economy and community, reduce

waste and utilities consumption, and minimise any negative impact on the environment


27

both now and for future generations.

Working in a sustainable way means rethinking a lot of what we do. It affects not only

the major strategic decisions we take but also how we go about our daily business.

Getting these decisions right will not only help us save money but it will help to eliminate

unnecessary waste in the system and reduce our carbon footprint. By doing this, it

demonstrates our commitment to enhancing individuals’ well-being through our work as

commissioners and enhancing the wellbeing of the local and global community.

Travel

The CCG encourages sustainable travel wherever possible. We have the use of an

electric car for business use. We offer shower facilities and parking for cyclists. We also

promote care closer to home, telehealth (remote consultations such as on the

telephone) and home working opportunities.

Energy use

The CCG’s landlord and facilities provider, NHS Property Services monitor our energy

usage and use renewable resources where feasible.

Waste

We work hard to minimise the creation of waste. We are reinvigorating our approach

now that we are settled in our refurbished headquarters. Paper, cardboard, glass,

metal, ink cartridges, batteries, waste electrical goods and confidential waste are all

recycled.

All of our staff are encouraged to work sustainably. We promote environmental

awareness, encourage low carbon travel and facilitate flexible working where possible.

Equality and diversity

The CCG complies with the Equality Act 2010 and the Public Sector Equality Duty and

we have demonstrated our commitment to taking Equality and Human Rights into

account in everything we do, whether that is commissioning services, employing people,

developing policies, communicating, consulting or involving people in our work as shown

below:

The Equality Delivery System (EDS)

The EDS is a tool that has been designed by the NHS for the NHS to enable

organisations to analyse their equality performance with the assistance of local


28

stakeholders, prepare equality objectives and embed equality into mainstream

commissioning activities.

We adopted the Equality Delivery System (EDS) framework and have been using it to

support the mainstreaming of equalities into all our core business functions and also

used it as an opportunity to raise equality in service commissioning and performance for

the community, patients, carers and staff.

Equality analysis

In 2013 we undertook a self-assessment in relation to the equality analysis (EA) toolkit

and guidance which covers all equality groups offered protection under the Equality Act

2010 (race, disability, gender, age, sexual orientation, religion/belief, marriage and civil

partnership and gender re-assignment) in addition to human rights and carers. From

this we identified our equality objectives and have developed an action plan to monitor

progress of delivery of these. The plan will be monitored by the Executive Committee.

Our EA process ensures we can identify the impact or effect, either positive or negative,

of our policies, procedures and functions on various sections of the population we

serve.

Staff training

Equality and Diversity training is a mandatory requirement for our staff. Those involved

in recruitment are also required to undertake recruitment and selection training which

includes awareness of equality and diversity legislation.

We also took part in the national staff survey and we were very pleased with 100%

response rate. Key feedback included that people felt a collective sense of purpose to

their work. As ever, there are some areas for improvement and we have begun to work

through these with staff to develop an action plan that will be shared with the Governing

Body when it is complete.

Diversity matters newsletter

During the year, the North of England Commissioning Support Service (from whom we

buy equality and diversity support) produced a quarterly newsletter to provide up-to-date

information on relevant equality, diversity and human rights legislation and

developments. This was circulated to all staff within the CCG.

Governance of equality and diversity

The equality and diversity function is governed by the Executive Committee, where we


29

have a lead executive GP for this important area. The Committee ensures we are:

compliant with legislative, mandatory and regulatory requirements regarding

equality and diversity;

develops and delivers national and regional diversity-related initiatives within the

CCG;

provides a forum for sharing issues and opportunities;

functions as a two-way conduit for information dissemination and escalation,

monitors progress against the Equality Strategy; and

supports us in the achievement of key equality and diversity objectives.

Engagement and partnership working

We work in partnership with local NHS Trusts and NHS England land their area teams.

We are members of Sunderland Health and Wellbeing Board and are also part of the

Sunderland Partnership. We work with the local voluntary sector organisations and

community groups to identify the needs of the diverse local community we serve to

improve health and healthcare in Sunderland.

We have continued to work closely with other local NHS organisations to support

regional equality, diversity and human rights work.

Accessibility and communications

We ensure that our headquarter building and the public buildings of service providers

are accessible for people with a disability by ensuring all buildings have had disability

access audits.

We have also earned the two tick ‘positive about disabled people’ symbol awarded by

Jobcentre Plus which demonstrates our commitment to employ, retain and develop the

abilities of disabled staff.

We use everyday language solutions when an interpreter is required. Information for

patients and the general public is available in other languages or formats such as large

print or Braille and audio, upon request.

Compliments and complaints

We welcome feedback, positive or negative, about people’s experience of local NHS

services as this helps us to improve services for patients.

The CCG received one formal complaint during 2013/2014 which was not related to an

equality or diversity issue. The complaint related to the CCG’s decision not to approve

an individual funding request. The patient required an explanation in relation to the


30

outcome of the funding request application and for this decision to be

reconsidered. The complaint was coordinated by the North of England Commissioning

Support Service, who manage complaints on our behalf, within the agreed timescales.

Equal opportunities for staff

We can demonstrate fair and equitable recruitment, workforce engagement and

employment terms and conditions to ensure levels of pay and related terms and

conditions are fairly determined for all posts.

The table below shows the breakdown of employees by sex within the CCG:

Male Female

Governing Body Members 7 5

Directors 3 2

CCG employees 23 56

The CCG participated in the national annual staff survey. The survey, which reported out in December 2013 included the following “scores” for SCCG:

94% of staff at the time having health and safety training and development

90% equality and diversity training

89% training on handling confidential information

80% often or always having enthusiasm for their job

84% felt able to comment on issues

76% received clear feedback form their managers

77% felt senior managers involved them in decision making

80% thought communications between senior managers and staff was effective, and

74% though senior staff acted on feedback given.

David Gallagher

Chief Officer (Accountable Officer)

3 June 2014


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Members’ report

Details of members of the membership body and governing body

NHS Sunderland CCG’s Constitution sets out the terms by which the CCG, through its

appointed members, elected GP executives and Governing Body, implements all

statutory obligations including the commissioning of secondary health care and other

services in Sunderland. The Constitution was agreed and signed by all Member

practices in August 2012 as part of the CCG authorisation process and updated in

November 2013. The Constitution contains the main governance rules of the CCG and

Governing Body.

Each member practice sits within one of five locality regeneration groups as follows:

Coalfields

Sunderland East

Sunderland North

Sunderland West

Washington

Each of the localities has a lead GP elected by the GPs of Sunderland (who is also a

member of the Executive Committee) as well as an assigned practice manager and

practice nurse. The locality teams also work in close partnership with the local authority

and local patients.

The geographical area covered by NHS Sunderland CCG is shown below:


32

The member practices within each locality are as follows:


33

Coalfields Locality Practices Sunderland North Locality Practices

Grangewood Surgery Roker Family Practice

Herrington Medical Centre Castletown Medical Centre

Pepper HM Fulwell Medical Centre

Houghton Medical Group The Wearside Practice

Kepier Medical Practice Dr AJM Crummie

Westbourne Medical Group Redhouse Medical Centre

Drs Cloak, Choi and Milligan

Dr R Obonna

Sunderland East Locality Practices Dr Weatherhead & Associates

Eden Terrace Surgery Ford RN

Ashburn Medical Centre

Deerness Park Sunderland West Locality Practices

Maritime Surgery* Hylton Medical Group

Park Lane Practice Millfield Medical Group

Dr SM Bhate & Dr H El-Shakankery Dr Lefley & Associates

Nathan Jr Dr Shetty & Partners

Conishead Medical Group Chester Surgery

Southlands Medical Group Church View Medical Centre

The New City Medical Group Colliery Medical Group

Dr Brigham & Partner Dr KNJ Weaver

(*This practice closed in September 2013) Pennywell Medical Centre

Joshi NA

South Hylton Surgery

Washington Locality Practices Springwell House

Barmston Medical Centre Springwell Medical Group

Concord Medical Practice The Broadway Medical Practice

Encompass Health Care The Old Forge Surgery

Harraton Surgery

Rickleton Medical Centre

Encompass GP Practice 2

Dr Vakharia & Hedge

Dr Dixit’s Practice

Dr Thomas

Victoria Medical Practice

Dr NJ Bhatt & Dr HM Benn

Dr Stephenson & Partners


34

Chair and Accountable Officer

The Chair of the CCG during 2013/4 was Dr Ian Pattison who is a practising GP within

Sunderland. Dr Pattison has recently been re-elected to serve as an executive GP and

Chair for a further 4 year term.

David Gallagher is the Chief Officer of the CCG a position which includes the role of

Accountable Officer.

The Committee Structure of the CCG

The diagram below shows the committee structure of the CCG:

Quality, Safety & Risk

Committee

Member Practices

Governing Body

Remuneration

Committee

Executive

Committee

Audit

Committee


35

The Governing Body is made up of the following members:

Executive GP Chair

Executive GP Vice Chair

Executive GP x4

Chief Officer

Chief Finance Officer

Director of Nursing, Quality and Safety

Lay Member, Audit and Non-Clinical Vice Chair

Lay Member, Patient and Public Involvement

Secondary Care Clinician

In addition to the above members, the following are regular non-voting attendees and participants to the Governing Body meeting:

Director of Public Health, Sunderland City Council

Executive Director of People, Sunderland City Council

Medical Director

Director of Commissioning, Planning and Reform

Executive Practice Manager

There is also the provision within the CCG’s Constitution for a patient representative to attend the Governing body and discussions are underway about how to fill this.

The Audit Committee was established in accordance with the CCG’s Constitution. The terms of reference set out the membership, remit, responsibilities and reporting arrangements of the committee.

Membership of the committee consists of:

Lay Member, Audit and lead role for governance (Chair)

Lay Member, Patient and Public involvement

Independent member with expertise in audit and finance

Please refer to the Chief Officer’s Governance Statement section for details of members of other CCG committees.

Please refer to the Governing Body profiles section of the Remuneration Report for details of conflicts of interest.

Pension liabilities

Pension liabilities are treated in the accounts in line with the accounting policies in note

4 of the Annual Accounts.


36

Sickness absence data

Sickness Absence (rolling year)

Annual Sickness Absence Rate 1.85%

Q1 Q2 Q3 Q4

Headcount 69 72 75 78

WFE 58 61 62 65

Starters 70 7 3 3

Leavers 1 4 0 0

Turnover 1.45% 5.56% 0.00% 0.00%

Fixed Term Staff 1 0 0 0

Staff on Maternity Leave 0 1 1 0

Staff on Paternity Leave 0 0 0 0

External audit

The Audit Commission appointed Mazars LLP as the CCG’s external auditor for the

years 2013/14 to 2016/17. The 2013/14 audit fee was £99,000 plus VAT. The 2013/14

fee was subject to an exceptional increase of 10% for 2013/14 only, to cover expected

additional first-year audit costs. The Audit Commission has funded this 10 per cent

increase, and the CCG received a rebate in March 2014.

The auditors did not perform any non-audit work for the CCG during the 12 month

period beginning April 2013.

Disclosure of serious untoward incidents

The CCG has not had any serious incidents or serious information breaches during the

year.

Cost allocation and setting of charges for information

We certify that the clinical commissioning group has complied with HM Treasury’s guidance on cost allocation and the setting of charges for information.

Principles for Remedy

The CCG complaints policy and procedure has been developed in line with current legislation and statutory requirements and best practice. This includes adopting the principles as outlined in the Parliamentary and Health Service Ombudsman’s Principles of Good Complaints Handling, Principles of good Administration and Principles of Remedy.


37

Employee consultation

The CCG has taken steps throughout the year to embed an open and transparent

culture with all of its employees. Monthly staff briefings are held, led by the Chief

Officer, to share key information and updates on the work of the Governing Body and its

committees as well as provide a forum for staff to raise any issues or concerns.

In addition to this, quarterly staff events are held to enable staff to review key topics in

more detail and to seek their views and input into key planning and developments.

Regular updates on the CCG’s performance are also included in the briefings and staff

events, as well as feedback and actions identified as a result of the staff survey.

The CCG is a member of the North East and Cumbria Staff Partnership Forum. The

Forum is coordinated by the human resources team within the North of England

Commissioning Support Service (who provide HR advice and support) and includes

representation from all CCGs across in the North East and Cumbria, human resources

advisors and the recognised unions.

Disabled employees

Please refer to the equality and diversity section of the Strategic Report. Emergency preparedness, resilience and response

The CCG has procedures in place which are fully compliant with the NHS England

Emergency Preparedness Framework 2013. We have developed our business

continuity plan and are working towards strengthening this through business impact

analysis of key commissioning functions. As a category 2 responder, the CCG is not

required to have a major incident plan.

Statement of disclosure to auditors

Each individual who is, or was, a member of the Governing Body in the year covered by

this report confirmed that, as far as they are aware, there is no relevant audit

information of which the clinical commissioning group’s external auditors is unaware.

Each member confirmed they have taken all the steps that they ought to have taken as

a member in order to make themselves aware of any relevant audit information and to

establish that the clinical commissioning group’s auditor is aware of that information.

David Gallagher


3 June 2014


38

Remuneration Report

Remuneration Committee

The Remuneration Committee is accountable to the CCG’s Governing Body and makes

recommendations to the Governing Body on the appropriate remuneration and terms

and conditions for staff, including the chief officer and other senior managers paid

through the Very Senior Managers Pay Framework including:

All aspects of salary

Provisions for other benefits, including pensions and cars

Arrangements for termination of employment and other contractual terms

The committee also:

provides advice and recommendations to the governing body on the

appropriate remuneration and terms of employment for the roles of clinical

chair, clinical vice chair and other clinical members of the governing body as

well as any lay members.

ensures there is proper calculation and scrutiny of termination payments,

taking account national guidance as appropriate, and seeking HM Treasury

approval as appropriate in accordance with the guidance ‘Managing Public

Money’.

determines the remuneration, fees and other allowances for employees and

for people who provide services to the CCG and would determine allowances

under any pension scheme should the CCG establish an alternative to the

NHS pension scheme.

The committee was formally established as from 1 April 2013 and membership

comprises of the lay member for audit and lay member for patient and public

involvement. In addition an HR Advisor attends the committee to provide specialist

advice and other individuals may be invited to attend for all or part of a meeting as

deemed appropriate. The chair of the committee is the lay member for audit.

The committee has met three times during the year and made recommendations to the

Governing body on the remuneration and terms and condition of service for the

following:

Executive GPs, including the CCG Chair

Executive practice manager and practice nurse


39

Lay members

Secondary care clinician (on the Governing Body)

Chief officer and chief finance officer

Other directors (x3)

Other CCG employees

Independent audit support

Cost of living increases for CCG employed staff on VSM salaries

Policy on remuneration of senior managers

The policy for remuneration of Very Senior Managers within the CCG is in line with the

Very Senior Managers Pay Framework, taking into account Sunderland is a medium

sized CCG at a level two.

All other senior managers are remunerated in line with agenda for change

requirements.

Policy on senior managers’ contracts

All senior manager contracts, specifying terms and conditions of service, are in line with

the Very Senior Managers Pay Framework or Agenda for Change as appropriate.


40

Salaries and allowances (has been subject to audit)

NHS Sunderland Clinical Commissioning Group Senior Officers Salaries & Allowances 2013/14

Name Title 2013/14

Salary & Fees Taxable Benefits Annual Long-term All Pension Total

Performance Performance Related Benefits Related Bonuses Related Bonuses

(Bands of (Rounded to (Bands of (Bands of (Bands of (Bands of

£5,000) the nearest £00) £5,000) £5,000) £2,500) £5,000)

£000

£00

£000

£000

£000

£000

Dr Ian Pattison Note 1 Clinical Chair 60 - 65 - - - 175 - 177.5 235 - 240

David Gallagher Chief Officer 115 - 120 59 - - 110 - 112.5 230 - 235

Dr Geoff Stephenson Note 1 Medical Director 50 - 55 37 - - - 55 - 60

Debbie Burnicle Director Of Commissioning, Planning And Reform 85 - 90 77 - - 45 - 47.5 135 - 140

Chris Macklin - Note 1 Chief Finance Officer 65 - 70 44 - - - 70 - 75

Ann Fox Note 2

(Commenced 1st May 2013) Director Of Nursing, Quality And Safety

50 - 55

62

-

-

132.5 - 135

230 - 235

Dr Iain Gilmour Note 1 Executive GP & Clinical Vice Chair 45 - 50 - - - 290 - 292.5 335 - 340

Dr Gerry McBride Note 1 Executive GP & Governance Lead 30 - 35 - - - 197.5 - 200 225 - 230

Dr Henry Choi Note 1 Executive GP & Clinical Effectiveness Lead 30 - 35 - - - 237.5 - 240 270 - 275

Dr Jackie Gillespie Note 1 Executive GP & Prescribing Lead 30 - 35 - - - 177.5 - 180 210 - 215

Dr Valerie Taylor Note 1 Executive GP & Executive Lead For Clinical Leads 35 - 40 - - - 10 - 12.5 45 - 50

Gloria Middleton Note 1 Executive Practice Manager Lead 20 - 25 - - - 115 - 117.5 135 - 140

Florence Gunn Note 1 (Commenced 16th July 2013)/

Note 5 Executive Practice Nurse

10 - 15

-

-

-

-

10 - 15

Aileen Sullivan Note 1 Lay Member, Public Patient Involvement (PPI) 10 - 15 5 - - - 10 - 15

Pat Taylor Note 1

(Commenced 1st June 2013) Lay Member, Vice Chair And Chair Of The Audit Committee

10 - 15

17

-

-

-

10 - 15

Prof. Mike Bramble Note 1 Secondary Care Clinician 30 - 35 8 - - - 30 - 35

Scott Watson Note 3 Head Of Contracting, Performance and Business Intelligence 75 - 80 32 - - - 80 - 85

Ian Holliday Head Of Service Reform And Joint Commissioning 65 - 70 5 - - 32.5 - 35 100 - 105

David Chandler (Commenced 20th May 2013) Head Of Finance 60 - 65 34 - - 40 - 42.5 105 - 110

Deanna Lagun Note 4 Head Of Safeguarding 0 - 5 2 - - 55-57.5 110-115

Note s

Note 1 Part Time Senior Officers

Note 2 A Fox 40% of WTE is spent working for South Tyneside CCG. Full salary is in the 90-95 band.

Note 3 S Watson withdrew from the NHS pension scheme in year

Note 4 D Lagun included within this report as formed part of the Governing Body for the month of April 13.

Note 5 Independent Contractor

For information C Macklin, G Stephenson, F Gunn, A Sullivan, P Taylor are not in the Pension Scheme

Taxable Benefits Taxable benefits include lease car allowances and mileage claims


41

Pension benefits (has been subject to audit)

NHS Sunderland Clinical Commissioning Group Senior Officers Pension Benefits 2013/14

Name and Title Real Real Total Lump Sum Cash Cash Real Employers

Increase in increase in accrued at aged 60 Equivalent Equivalent increase in contribution

pension at Pension pension at related to Transfer Transfer cash to

age 60 Lump Sum age 60 at 31 accrued Value at 31 Value at 31 equivalent stakeholder

(bands of at aged 60 March 2014 pension at March 2013 March 2014 transfer pension

£2500) (bands of (bands of 31 March value £2500) £5000) 2014 (bands of £5000)

£000 £000 £000 £000 £000 £000 £000 £00

Dr Ian Pattison Note 1 Clinical Chair 7.5 - 10 22.5 - 25 5 - 10 25 - 30 34 131 96 90

David Gallagher Chief Officer 2.5 - 5 12.5 - 15 40 - 45 120 - 125 623 743 106 161

Dr Geoff Stephenson Note 1 Medical Director 0 0 0 0 0 0 0 0

Debbie Burnicle

Director Of Commissioning,

Planning And Reform

0 - 2.5

5 - 7.5

25 - 30

85 - 90

472

533

51

120

Chris Macklin Chief Finance Officer 0 0 0 0 0 0 0 0

Ann Fox

Director Of Nursing, Quality And

Safety

5 - 7.5

15 - 17.5

30 - 35

100 - 105

453

575

103

124

Dr Iain Gilmour Note 1 & Note 2

Executive GP & Clinical Vice

Chair

12.5 - 15

37.5 - 40

10 - 15

40 - 45

48

285

236

67

Dr Gerry McBride Note 1 & Note

2

Executive GP & Governance

Lead

7.5 - 10

25 - 27.5

15 - 20

55 - 60

207

401

190

45

Dr Henry Choi Note 1 & Note 2

Executive GP & Clinical

Effectiveness Lead

10 - 12.5

30 - 32.5

10 - 15

30 - 35

44

243

198

45

Dr Jackie Gillespie Note 1

Executive GP & Prescribing Lead

7.5 - 10

22.5 - 25

5 - 10

25 - 30

22

146

124

45

Dr Valerie Taylor Note 1

Executive GP & Executive Lead

For Clinical Leads

0 - 2.5

0 - 2.5

0 - 5

0 - 5

0

10

10

52

Gloria Middleton


Lead

5 - 7.5

15 - 17.5

10 - 15

40 - 45

185

294

105

32

Florence Gunn Executive Practice Nurse 0 0 0 0 0 0 0 0

Aileen Sullivan

Lay Member, Public Patient

Involvement (PPI)

0

0

0

0

0

0

0

0

Pat Taylor

Lay Member, Vice Chair And

Chair Of The Audit Committee

0

0

0

0

0

0

0

0

Prof. Mike Bramble Secondary Care Clinician 0 0 0 0 0 0 0 0

Scott Watson

Head Of Contracting,

Performance and Business

Intelligence

0

0

0

0

0

0

0

36

Ian Holliday

Head Of Service Reform And

Joint Commissioning

0 - 2.5

2.5 - 5

25 - 30

85 - 90

535

592

45

98

David Chandler Head Of Finance 0 - 2.5 2.5 - 5 15 - 20 55 - 60 236 275 29 86

Deanna Lagun Head Of Safeguarding 0 - 2.5 5 - 7.5 20-25 60-65 294 352 52 81

Note s

Note 1 Pensions information provided excludes general practitioner pension contributions.

Note 2 Pension contributions from previous officer posts held by individuals were significantly minor in comparison to their current role held within the CCG.

This has led to a significant increase in the reported figures for the real increase of the CETV for these individuals.


42

Pay multiples (has been subject to audit)

Reporting bodies are required to disclose the relationship between the

remuneration of the highest-paid director in their organisation and the

median remuneration of the organisation's workforce.

The banded remuneration of the highest paid member of the Governing

Body in NHS Sunderland CCG in the financial year 2013/14 was £120,000 -

£125,000 (2012/13, £N/A). This was 3.12 times (2012/13: N/A times) the

median remuneration of the workforce, which was £39,239 (2012/13: £N/A).

In 2013/14, 0 (2012/13: N/A) employees received remuneration in excess of the highest-paid member of the Governing Body. Remuneration for employees ranged from £7,118 to £124,622 (2012/13: £N/A to £N/A).

Total remuneration includes salary, non-consolidated performance-related

pay, benefits-in-kind, but not severance payments. It does not include

employer pension contributions and the cash equivalent transfer value of

pensions.

2013/14

Band of Highest Paid Director's Total Remuneration (£'000) 120-125

Median Total Remuneration (£) 39,239

Ratio 3.12

2013/14 highest paid director: Chief Officer 120 - 125


43

Off Payroll Engagements Disclosure

Off-payroll engagements as of 31 March 2014, for more than £220 per day and that last

longer than six months are as follows:

Number

The number that have existed : For less than one year at the time of reporting 4

For between one and two years at the time of reporting 0

For between two and three years at the time of reporting 0

For between three and four years at the time of reporting 0

For four or more years at the time of reporting 0

Total number of existing engagements as of 31 March 2014 2

All existing off-payroll engagements, outlined above, have at some point been subject

to a risk based assessment as to whether assurance is required that the individual is

paying the right amount of tax and, where necessary, that assurance has been sought.

New off-payroll engagements between 1 April 2013 and 31 March 2014, for more than

£220 per day and that last longer than six months are as follows:

Number

Number of new engagements, or those that reached six months in duration, between 1 April 2013 and 31 March 2014

4

Number of the above which include contractual clauses giving the CCG the right to request assurance in relation to Income Tax and National Insurance obligations

0

Number for whom assurance has been requested 4

Of which, the number For whom assurance has been received 2

For whom assurance has not been received 2

That have been terminated as a result of assurance not being received

0

Number Number of off-payroll engagements of Membership Body and/or Governing Body members, and/or, senior officials with significant responsibility, during the financial year

0

Number of individuals that have been deemed “Membership Body and/or Governing body members, and/or, senior officials with significant financial responsibility during the financial year

0


44

Membership body and Governing body profiles

Member Practices The CCG has five localities as described in the Members’ Report. Each member

practice is part of a locality and has a lead GP as well as a lead practice manager and


and local patients.

Governing body and senior management profiles

Dr Ian Pattinson, Chair

Passionate about ensuring patients receive the best care available, Ian has been a GP

at the Southland Medical Centre in Ryhope since 2001. With previous commissioning

experience gained at Wearside Commissioning Group, Ian was elected to Sunderland

CCG as Chair in 2011. He is a member of the governing body, Executive Committee

and Sunderland Health and Wellbeing Board.

David Gallagher, Chief Officer

With previous experience of working with CCGs in Newcastle, Gateshead, County

Durham and Darlington, David has been involved with the NHS in both clinical and

strategic roles. He has lived locally all his life and has extensive management

experience including in hospitals and commissioning. He started his career in 1982 at

Sunderland Royal Infirmary and joined Sunderland CCG as Chief Officer in 2012.

Chris Macklin, Chief Finance Officer

Chris has worked in the NHS since 1975, becoming Director of Finance for NHS South

of Tyne in 2006. He is a Governor of Gateshead College and Chairs their Audit

Committee and in 2009 he was awarded a fellowship by Healthcare Financial

Management Association (HFMA) in recognition of his contribution to HFMA and the

development of NHS Accounting Standards.

Dr Geoff Stephenson, Medical Director

Originally from London, Geoff Stephenson qualified from Newcastle Medical School in

1974 and decided to develop his career in the North East. He is Senior Partner in a

large GP Teaching Practice in Washington where he has practiced since 1978. He has

held many senior posts within the NHS and was appointed medical director for

Sunderland CCG in April 2013.

Debbie Burnicle, Director of Planning, Commissioning and Reform

Debbie has spent most of her career working in Sunderland, working across both health

and social services. She has worked in Sunderland City Council in planning and


45

commissioning social care services for the children and adults before becoming deputy

director of commissioning within NHS South of Tyne and Wear. Debbie later took on

responsibility for preparing Sunderland CCG to become a statutory clinical

commissioning body before taking up her current role.

Ann Fox, Director of Nursing, Quality and Safety

As a registered nurse and with a career in the NHS spanning 29 years, Ann has always

been an advocate for improving the quality of patient care, their safety and overall

experience. She has been instrumental in developing new services and clinical

pathways in areas such as haematology and palliative care, and in her role as Nurse

Director for the North of England Cancer Network. Prior to her current role, Ann was

Director of Clinical Care and Patient Safety at the North East Ambulance Service NHS

Foundation Trust.

Prof. Mike Bramble, Secondary Care Clinician

Professor Mike Bramble is a part-time consultant gastroenterologist at the James Cook

University Hospital in Middleborough. His career spans 31 years and he has a range of

experience and has advised the government on areas relating to endoscopy. He retired

in June 2010 and returned to part-time clinical and academic work. He became one of

several HQIP clinical champions in 2011 and was appointed to the Governing Body of

Sunderland CCG in 2013.

Dr Jackie Gillespie, Coalfield Locality GP Lead

Jackie has been a GP in Sunderland for 17 years and has been the lead GP for

prescribing within the CCG since March 2011. Jackie was previously a member of the

prescribing team for a Sunderland practice-based commissioning group during which

time she built strong links with NHS South of Tyne and Wear Medicines Management

Team and Sunderland Primary Care Prescribing Group.

Dr Gerry McBride, Sunderland East Locality GP Lead

Gerry has been a GP in Monkwearmouth for 27 years, having helped the practice to

develop and increase the range of services they offer to their practice population. Gerry

has previous experience in commissioning as a member and later Chair of the

Wearside Commissioning Group. He has an interest in medical education and

continuing professional development for doctors.

Dr Valerie Taylor, Sunderland North Locality GP Lead

Valerie was elected to the post of executive GP in 2013, and is lead GP for Sunderland

North. She is also involved in leading work on enhancing the quality of life of patients

with long term conditions. Since 2012 she has been working as the lead for


46

musculoskeletal problems for the CCG. Valerie is also on the Local Medical Committee,

currently as Vice Chair. She was the representative for the Royal College of GPs for the

North East on National Council from 2005 to 2008.

Dr Iain Gilmour, Sunderland West Locality GP Lead and Vice Chair

With previous experience as a Clinical Executive member of NHS South of Tyne and

Wear and joint chair of a Sunderland practice-based commissioning group, Iain has

worked at Deerness Park Medical Centre and Bunny Hill Primary Care Centre in

Sunderland since 1988. He has also been an active member of the North of England

Cardiovascular Network and is committed to improving services for local patients with

heart disease. He stood down from the Governing Body in April 2014 when his term of

office came to an end.

Dr Henry Choi, Washington Locality GP Lead

Henry has been a partner at Southwick Health Centre since 1990 and the Sunderland

diabetes and cancer lead for the last 10 years. Henry was elected to the Sunderland

CCG in 2011. His current role as clinical effectiveness lead is to support practices and

the CCG to deliver safe, effective, patient-focused care and services.

Aileen Sullivan, Lay member (public and patient involvement)

After beginning her career as a nurse and midwife Aileen moved into the education of

health professionals. She became a principal lecturer at Northumbria University in 1995

and then the Director of Practice Placements. Aileen was actively involved in research

projects looking at the care older people received in nursing homes. After leaving

Northumbria she became a non-executive director for Sunderland Teaching Primary

Care Trust.

Pat Taylor, Lay member (audit and vice chair)

Pat has worked in the NHS for over 30 years, and for the last 20 years was a Director of

Finance, holding posts across all types of NHS organisation. Latterly she was the

Director of Finance of both County Durham and Darlington PCTs. Pat has previously

worked in North of Tyne, Yorkshire, Cambridgeshire, Durham and Darlington and has

covered a wide portfolio of roles including child health, estates, diagnostic services, risk

and corporate governance, IM&T and investment planning. Pat has a long-term interest

in staff development and was previously the North East Chair of the Building Leadership

Capacity Board.

Neil Revely, Executive director of people

Neil has many years of local government experience, especially in social care and

housing. Much of his early career was spent in County Durham and he subsequently


47

became director in Sunderland in 2007. He is particularly known for his work on

strategic commissioning, supported housing and creating innovative community

solutions for independent living. Neil is now executive director in the People Directorate

Sunderland City Council.

Gloria Middleton Practice manager representative

Gloria has held various regional and national positions including Local Medical

Committee (LMC) Practice Manager Representative, National Chair of the Primary Care

Sector Institute of Healthcare Management and Chair of Sunderland Practice Managers’

Group. She has been a non-clinical partner at Westbourne Medical Group since 1992.

Her role within the CCG includes learning disabilities, patient and public involvement

and communications.

Florence Gunn, Strategic Practice Nurse Florence has worked in the NHS for over 27 years and has held various positions

across the health sector. She has worked in both secondary and general practice,

working autonomously with patients with long term conditions. She is currently an

advanced nurse practitioner, as well as the clinical lead for end of life care, and works

as part of a team to provide a holistic service to patients. In her role as strategic

practice nurse, Florence is actively involved in workforce management and is the link to

the Governing Body for the locality nurses.


48

Declared Interests and Conflicts

Company/Organisation

Brief Details of Interest

Accenture

Taylor Associates

Business Development Manager(Consultancy work) Partner

Portland School

Treasurer of the Friends of PortlandSchool.

Deerness Park Medical Centre and BunnyHill Primary Care Centre Deerness Park Medical GroupFarnborough Court Intermediate CareCentre

Servier Laboratories Ltd

Partner Accredited provider of anticoagulationService (AQP Programme). Service Line Agreement for medicalcover (commissioned by competitivetender). Medical research on patients withstable ischaemic heart disease

Wearside Practice (managed by SouthTyneside NHS Foundation Trust)

Practice Manager

Position held on CCG

Governing Body

Members

Surname Forename Self/Status

Southlands Medical Group

Clinical Chair Ian


Lay Vice Chair Taylor Pat

Lay member

Clinical Vice Chair

Iain


49

GP Executive McBride Gerry

Self

St Bede’s Medical Centre Dr G McBride & Co Ltd (Companies House number: 02563750)

GP Partner Company director and shareholder

Wife Newcastle Hospitals NHS Foundation Trust Specialist Midwife

GP Executive Taylor Valerie Self Rheumatology Department, City Hospitals Sunderland Kepier Medical Practice

Clinician (one session per week) Salaried GP

GP Executive Gillespie Jacqueline

Self Millfield Medical Centre Partner

Husband Dr PM Peverly Old Forge Surgery Partner

GP Executive Choi Henry Self

Southwick Health Centre Macmillan Sunderland Diabetes Support Group

Partner Adopted GP President

Secondary care clinician

Bramble Mike Self South Tees Hospitals NHS Trust Durham University

Part time medical consultant Visiting Professor

Chief Officer Gallagher David Self Nothing to declare


Macklin Christopher Self

Lifespan Gateshead College Zero Carbon Futures (owned by Gateshead College) Charge Your Car (owned by Gateshead College)

Provision of financial advice Governor and Chair of Audit Committee Chairman and Director Chairman and Director


50


Fox

Ann

Self

My New Hair Communication Equation RCN Northern Regional Board South Tyneside Clinical Commissioning Group

Chair of Trustees Company Director Board Member Director of Nursing, Quality and Safety

In attendance Executive Practice Manager

Middleton

Gloria

Self

Westbourne Medical Group

Partner

Medical Director

Stephenson

Geoff

Self

Victoria Road Health Centre

Managing Partner

Director of Public Health

Crawford

Nonnie

Self

Sunderland City Council

Director/ Employee of Sunderland City Council


Burnicle

Debbie

Self

Nothing to declare

Sunderland City Council Representative

Revely

Neil

Self


Executive Director of Health, Housing and Adult Services/ Employee of Sunderland City Council.

Head of Corporate Affairs

Cornell

Deborah

Self

Nothing to declare

David Gallagher


3 June 2014


51

Statements by the Accountable Officer

Statement of Accountable Officer’s Responsibilities

The National Health Service Act 2006 (as amended) states that each Clinical

Commissioning Group shall have an Accountable Officer and that Officer shall be

appointed by the NHS Commissioning Board (NHS England). NHS England has

appointed the Chief Officer to be the Accountable Officer of NHS Sunderland Clinical

Commissioning Group.

The responsibilities of an Accountable Officer, including responsibilities for the propriety

and regularity of the public finances for which the Accountable Officer is answerable, for

keeping proper accounting records (which disclose with reasonable accuracy at any

time the financial position of the Clinical Commissioning Group and enable them to

ensure that the accounts comply with the requirements of the Accounts Direction) and

for safeguarding the Clinical Commissioning Group’s assets (and hence for taking

reasonable steps for the prevention and detection of fraud and other irregularities), are

set out in the Clinical Commissioning Group Accountable Officer Appointment Letter.

Under the National Health Service Act 2006 (as amended), NHS England has directed

each Clinical Commissioning Group to prepare for each financial year financial

statements in the form and on the basis set out in the Accounts Direction. The financial

statements are prepared on an accruals basis and must give a true and fair view of the

state of affairs of the clinical commissioning group and of its net expenditure, changes in

taxpayers’ equity and cash flows for the financial year.

In preparing the financial statements, the Accountable Officer is required to comply with

the requirements of the Manual for Accounts issued by the Department of Health and in

particular to:

Observe the Accounts Direction issued by NHS England, including the relevant

accounting and disclosure requirements, and apply suitable accounting policies

on a consistent basis;

Make judgements and estimates on a reasonable basis;

State whether applicable accounting standards as set out in the Manual for

Accounts issued by the Department of Health have been followed, and disclose

and explain any material departures in the financial statements; and,

Prepare the financial statements on a going concern basis.


52

To the best of my knowledge and belief, I have properly discharged the responsibilities

set out in my Clinical Commissioning Group Accountable Officer Appointment Letter.

David Gallagher


3 June 2014

Governance statement

Governance Statement by the Chief Officer as the Accountable Officer of NHS

Sunderland Clinical Commissioning Group.

I am delighted to provide this, the first annual governance statement for NHS

Sunderland Clinical Commissioning Group after our first full year as a statutory body.

Introduction

NHS Sunderland Clinical Commissioning Group was licenced from 1 April 2013 under

provisions enacted in the Health & Social Care Act 2012, which amended the NHS Act

2006.

The clinical commissioning group (the CCG) operated in shadow form prior to 1 April

2013, to allow for the completion of the licencing process and the establishment of

function, systems and processes prior to the CCG taking on its full powers.

As at 1 April 2013, the CCG was licensed with the following condition:

• the appointment of a lead nurse and secondary care clinician to the

Governing Body of the CCG.

The secondary care clinician was appointed and in post with effect from 1st February

2013.

An interim arrangement was put in place to address the lead nurse vacancy for the

period of 1st April to 30th April 2013 until the person appointed substantively could take

up post. The Head of Safeguarding, who is a registered nurse, was appointed to act up

into the role of Governing Body lead nurse until then. The condition was fully met on


53

the 1st May 2013 when the successful appointee took up her post formally. This post is

the Director of Nursing, Quality and Safety as the lead nurse to the Governing Body.

The CCG is the statutory body responsible for planning, purchasing and monitoring the

delivery and quality of most of the local NHS healthcare and health services for the

people of Sunderland. We are made up of doctors, nurses and other health

professionals with management support.

The CCG is a membership organisation and all 53 GP practices in Sunderland are

members of the CCG. We are a clinically led organisation and the membership elected

six GPs, one of which is the CCG Chair, to lead the CCG on their behalf and work as

part of the Governing Body. We also have a number of other clinical professionals

working with us on key areas of improvement and development.

The Governing Body and its formal committees are responsible for setting the strategy

for health improvement for Sunderland and ensured the CCG delivered the

improvements we set out in our commissioning plans. By doing this, we worked very

closely with other partners as members of Sunderland’s Health and Wellbeing Board to

improve the overall wellbeing of our local people.

Scope of responsibility

As Accountable Officer, I have responsibility for maintaining a sound system of internal

control that supports the achievement of the clinical commissioning group’s policies,

aims and objectives, whilst safeguarding the public funds and departmental assets for

which I am personally responsible, in accordance with the responsibilities assigned to

me in Managing Public Money. I also acknowledge my responsibilities as set out in my

Clinical Commissioning Group Accountable Officer Appointment Letter.

I am responsible for ensuring that the clinical commissioning group is administered

prudently and economically and that resources are applied efficiently and effectively,

safeguarding financial propriety and regularity.

Regard to the Corporate Governance Code

Whilst the detailed provisions of the UK Corporate Governance Code are not mandatory

for public sector bodies, compliance is considered to be good practice. This

Governance Statement is intended to demonstrate the clinical commissioning group had

due regard to the principles set out in the Code.


54

For the financial year ended 31 March 2014, and up to the date of signing this

statement, we had regard to the provisions set out in the Code and applied the

principles of the Code.

The governance framework of NHS Sunderland CCG

The National Health Service Act 2006 (as amended), at paragraph 14L(2)(b) states:

‘The main function of the governing body is to ensure that the group has made

appropriate arrangements for ensuring that it complies with such generally accepted

principles of good governance as are relevant to it.’

NHS Sunderland CCG’s Constitution sets out the terms by which the CCG, through its

appointed members, elected GP executives and Governing Body, implements all

statutory obligations including the commissioning of secondary health and other

services in Sunderland. The Constitution was agreed and signed by all member

practices in August 2012 as part of the CCG authorisation process and updated in

November 2013. The Constitution contains the main governance rules of the CCG and

Governing Body.

Each member practice is in one of five localities as follows:

Coalfields

Sunderland East

Sunderland North

Sunderland West

Washington

Each of the localities has a lead GP nominated by the Governing Body (who is also a

member of the Executive Committee) as well as an assigned practice manager and


and local patients.

The CCG has met regularly with all of its member practices as part of the ‘Time In Time

Out’ clinical educational sessions which are held bi-monthly. This provided us with an

opportunity to communicate with all our members on key updates and developments

around the work of the CCG and also to obtain views and feedback from members of

key issues, improvements and future developments. Whilst the CCG was not required

to hold an annual general meeting last year, a session was held in September with

members to review, amongst other things, how the CCG had developed during and

after authorisation.


55

We see governance as the systems, controls, accountabilities and decision-making at

the highest level of the organisation. It is the way the organisation leads and manages

through our values (in the public sector of accountability, probity and openness) and our

systems (such as governance structures and risk management systems). The CCG

governance framework comprises the systems and processes, and the culture and

values, by which the organisation is directed and controlled. It enables the organisation

to monitor the achievement of its strategic objectives and to consider whether those

objectives have led to the delivery of appropriate, cost-effective services for the

residents of Sunderland in delivering our aim of Better Health for Sunderland.

The system of internal control is a significant part of that framework and is designed to

manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve

policies, aims and objectives and 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 policies, aims and

objectives;

evaluate the likelihood of those risks being realised and the impact should

they be realised, and to manage them efficiently, effectively and

economically.

The governance framework has been in place in the CCG for the year ended 31st March

2014 and up to the date of the approval of the statement of accounts.

Following the establishment of the CCG, effective governance arrangements have been

put in place in accordance with national guidance and best practice. The CCG

Governing Body and its sub-committees have been established to ensure it discharges

its functions appropriately and allows for such functions to be managed effectively.

In 2013/14, the Governing Body has met on 11 occasions, 5 of which have been in

public, and included 6 development sessions focusing on the effectiveness of the

Governing Body, both as individual members and as a board.

The Governing Body is made up of the following members:

Executive GP Chair

Executive GP Vice Chair

Executive GP x 4


56

Chief Officer



Lay Member, Audit and Non-Clinical Vice Chair

Lay Member, Patient and Public Involvement


In addition, the following are regular non-voting attendees and participants to the

Governing Body meeting:

Medical Director




Executive Director of People, Sunderland City Council

There is also the provision within the CCG’s Constitution for a patient representative to

attend the Governing body but this has not yet been filled.

The CCG Governing Body has operated with a committee structure which reflects

guidance and best practice, including an Executive Committee, Audit Committee,

Quality Safety and Risk Committee and a Remuneration Committee. Terms of

reference have been agreed for these committees which reflect their responsibilities and

accountabilities to the Governing Body. Agendas are structured to deal with strategic,

performance, quality, assurance, risk and governance issues. These arrangements

meet the requirements of best practice guidance in respect of risk management and

ensure that a robust assurance framework has been established. They also reflect the

public service values of accountability, probity and openness and specify as Chief

Officer, my responsibility for ensuring these values are met within the CCG.

The chart below shows the governance structure of the CCG and the membership of

each committee:


57

Committees of the CCG Governing Body

Executive Committee

The Executive Committee is a management committee to support the CCG, its

Governing Body and myself, as Chief Officer, in the discharge of the CCG’s functions.

Audit Committee

Lay Member, Audit

(Chair)

Lay Member, PPI

Independent Audit

Support

Quality, Safety & Risk Committee

Lay Member, PPI (Chair)

Director of Nursing, Quality & Safety

Chief Officer

Medical Director


GP Medicines Optimisation Lead

GP Clinical Effectiveness Lead

Member Practices

Committee

Lay Member, Audit

(Chair)

Lay Member, PPI

GP Chair

Governing Body

GP Chair

Executive General Practitioners (x5)

Director of Nursing, Quality & Safety


Lay member, Audit

Lay member, PPI

Chief Officer


Executive Committee

Chief Officer (Chair)

GP Chair

GPs (x5)



Executive Practice Nurse

Director of Nursing, Quality &

Safety


58

The committee assists the Governing Body in its duties to promote a comprehensive

health service, reduce inequalities and promote innovation. The remit of the committee

includes contributing to the development and implementation of strategy, monitoring

and delivery of statutory duties, operational, financial, contractual and clinical

performance as well as ensuring the coordination and monitoring of risks and internal

controls. It has authority to make decisions as set out within its terms of reference and

the CCG’s scheme of reservation and delegation.

Membership of the committee includes:

CCG Chief Officer (Chair)


GP Chair

5 elected GPs (locality lead roles)

Executive Practice Manager (localities)

Executive Practice Nurse (localities)


The following attend the committee on a regular basis but do not have a voting right, reflecting their independence:

Medical Director

Director of Commissioning and Reform


Highlights from the committee

The committee has met on a monthly basis throughout 2013/14 to discuss progress and

development of the CCG’s commissioning agenda and make decisions relevant to this

as appropriate and required. The committee has considered a number of project ideas,

business cases, procurement proposals, pathway developments and reforms, including

considering the impact on improving outcomes for patients and any financial

implications. The committee has also received regular reports on finance and

performance issues, healthcare acquired infections, key issues and risks, public health

developments, complaints, freedom of information requests and serious incidents, as

well as monitoring progress against NHS England’s assurance framework for CCGs on

behalf of the Governing Body.

The committee also played a key role during the transition from PCT to CCG. A plan

was developed and monitored closely by the committee to ensure those relevant

functions transferring from the former PCT in Sunderland to the CCG were being addressed

and implemented appropriately.


59

Some of the key items considered by the committee include:

Localities innovation funding

Acquired Brain injury business case

Procurement of anticoagulation monitoring

Quality and Outcomes Framework process for 2013/14

Local Incentive Scheme for 2013/14

Rapid Assessment, Interface and Discharge and IRT business cases

Readmission schemes updates

DVT pathway reform proposal

Prime Ministers’ Challenge Fund proposals

Development of the Better Care Fund in partnership with the Local Authority

The development of the Gateway tool for providers to use to put forward

development ideas and opportunities

The CCG planning process for 2014-15

Prescribing Budget setting and incentive scheme

Research and development activities and developments

Winter preparedness/surge management

The committee has also approved a number of policies and strategies for submission to

the Governing Body including:

Commissioning Plans (operational 2 year and strategic 5 year plans)

Clinical Leads Strategy

Business Continuity Plan

Communications and Engagement Strategy

In addition to the monthly meetings, a number of development sessions were held

during the year to enable the committee to focus on areas of development and key

issues to provide additional assurance that these areas were being reviewed in more

detail. The sessions were well attended by the members and included:

Planning and priority setting

Developing clinical leads

Resource allocation within the CCG

There were a number of key challenges faced by the committee including:

Continuing Healthcare retrospective claims

Out of hours procurement


60

A&E attendances

Performance of providers in relation to healthcare acquired infections

Audit Committee

The Audit Committee was established in accordance with the CCG’s Constitution. The

terms of reference set out the membership, remit, responsibilities and reporting

arrangements of the committee.

The Committee provided the Governing Body with assurance and an independent and

objective view on their finance and governance systems and process, financial

information and compliance with laws, guidance, and regulations governing the NHS in

so far as they relate to finance and governance. The Committee is a non-executive

committee of the Governing Body. It has no executive powers, other than those

specifically delegated to it and as set out in the Terms of Reference.

In establishing the Committee and preparing the Terms of Reference, specific regard

has been made to the guidance contained within the NHS Audit Committee Handbook,

NHS Codes of Conduct and Accountability and the Higgs Report.

Membership of the committee consists of:

Lay Member, audit and lead role for governance (Chair)

Lay Member, patient and public involvement

Independent member with expertise in audit and finance

Regular attendees to the committee include:


Director, Mazars (external audit)

Senior Manager, Mazars (external audit)

Head of Internal Audit

Internal Audit Manager

Head of Finance


Counter Fraud Specialist

The main work areas of the committee are:

Assurance framework, governance, risk management and control


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Internal Audit

External Audit

Counter Fraud

Other assurance functions

Management processes

Financial performance and reporting (including QIPP)

Highlights from the Committee

The committee has met three times during the first year of the CCG. Its main role has

been to review the internal systems and processes and to provide assurance to the

Governing Body that these are fit for purpose. The committee is helped in this by the

internal and external audit teams, together with the Counter Fraud team.

During the year the committee has:

received regular updates from both internal and external audit on their work

to date, the issues identified and agreed action plans to address them.

agreed the strategic work programmes for both internal and external audit

and counter fraud for the financial year 2013/14

reviewed its terms of reference, the assurance framework, the risk

management framework and the risk register

received regular updates on the financial position of the CCG, together with

achievement of the Quality, Innovation, Production and Prevention (QIPP)

Programme

responded to NHS England’s consultation on the constitutional requirements

for Audit Committees following the proposed abolition of the Audit

Commission

reviewed policies with specific impact on matters of governance, namely the

Speaking up on issues of Concern policy and the Anti-fraud, bribery and

corruption policy.

agreed a forward work plan which is reviewed at each meeting.

The key challenges faced by the Audit Committee in 2013/14 have been:

Committee membership – the CCG has only two lay members who make up

the Audit Committee. Following a review of the terms of reference a

proposal was made to the Governing Body to seek a third independent

member of the committee (as allowed for in the Constitution) to strengthen

the committee. An individual with NHS finance experience was appointed

for a period of twelve months and this will be reviewed in the autumn to

determine if this should be a permanent change.


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Assurances from North of England Commissioning Support (NECS) – as a

key provider of support services to the CCG, the CCG expected to receive

assurance, through a Service Auditor Report, on the whole financial year. It

became clear during the year that this would not be the position and the

report would only cover the second six months of the year. The Audit

Committee worked with the senior finance team at the CCG, the senior

team at NECS, and the internal and external auditors to understand the

implications of this, to agree a work plan that ensured this gap in assurance

was covered by their own work.

Legacy balances – on the demise of PCTs a number of legacy balance

issues emerged. The Audit Committee was briefed on these as they

changed throughout the year, and specifically discussed the impact of CHC

restitution provisions.

Quality, Safety and Risk Committee

The Quality, Safety and Risk Committee (QSRC) is responsible for ensuring the

appropriate governance systems and processes are in place to commission, monitor

and ensure the delivery of high quality, safe patient care in commissioned services and

to facilitate, monitor and ensure quality improvement in general medical practice by

working with NHS England.

To achieve this, the committee seeks to promote a culture of continuous improvement

and innovation with respect to safety of services, clinical effectiveness and patient

experience. It also aims to secure public involvement, to promote research and the use

of research and to provide assurance to the Governing Body about the quality, safety

and risks of the services being commissioned and the overall risks to the organisation’s

strategic and operational plans.

The Committee also provides oversight and scrutiny of arrangements for supporting

NHS England in relation to securing continuous improvement in the quality of primary

medical services through the planning process and future primary care commissioning

arrangements.

Membership of the Committee consists of:

Executive voting members:

Lay Member, Patient and Public Involvement (Chair)

Director of Nursing, Quality and Safety (vice chair)

Chief Officer

Medical Director


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CCG GP Medicines Optimisation Lead

CCG Clinical Effectiveness Lead

Associate members:

Head of Quality and Patient Safety

Head of Medicines Optimisation

Head of Safeguarding

Head of Joint Commissioning


Deputy Head of Contracting, Performance and Business Intelligence

Clinical Quality Officer

Patient Experience Officer

Highlights from the committee

The committee established regular reporting mechanisms for its key roles and

responsibilities and received regular assurance reports on the following:

Safeguarding

Quality- secondary, community and mental health services

CQUIN performance

Infection control

Care homes

Continuing Healthcare

Complaints

Serious incidents

Risk registers

Performance/contractual issues

Medicines Optimisation

The reports covered the key issues in each of the areas to highlight any quality or

patient safety issues, as well as any key risks that required further action and/or

required escalating to the CCG risk register. A lead was identified for any actions the

committee felt were required and a log of each action was kept up to date with the

minutes from each meeting. These minutes are submitted to the Governing Body to

provide assurance on the work of the Committee.

There have also been some particular areas that have required a more detailed focus


64

by the committee to ensure work was undertaken to implement specific requirements

and also address areas of concern relating to quality and patient safety issues. These

areas have included:

The Winterbourne View report

Mid Staffordshire NHS Foundation Trust Public Inquiry report (Francis Report)

NHS 111

Berwick and Keogh reports

Risk summit

The committee has also held a number of educational sessions over the year to provide

an opportunity to undertake an in-depth review of specific topics and provide additional

assurance on work undertaken to mitigate the risks associated with this. These topics

have included:

Risk management within the CCG

Quality in the new health system

Safeguarding children and adults

Healthcare associated infections

Mid Staffordshire report

Medicines optimisation

Remuneration Committee

The Remuneration Committee is accountable to the CCG’s Governing Body and makes

recommendations to the Governing Body on the appropriate remuneration and terms of

service for the CCG including:

All aspects of salary (including any performance-related elements/bonuses)

Provisions for other benefits, including pensions and cars

Arrangements for termination of employment and other contractual terms

It determines the remuneration, fees and other allowances for employees and for

people who provide services to the CCG and would determine allowances under any

pension scheme should the CCG establish an alternative to the NHS pension scheme.

Membership of the committee is made up of the lay members and others determined by

the Governing Body, who are independent of the management of the CCG. The

committee is chaired by the lay member for audit.

The committee has met three times during the year and made recommendations to the


65

Governing body on the remuneration and terms and condition of service for the

following:

Executive GPs, including the CCG Chair

Executive practice manager and practice nurse

Lay members

Secondary care clinician (on the Governing Body)

Chief officer and chief finance officer

Other directors (x3)

Other CCG employees

Independent audit support

Cost of living increases for CCG employed staff on VSM Salaries

Joint Committee Arrangements

The CCG also has joint and collaborative arrangements in place to make

commissioning decisions through delegation arrangements. These are as follows:

Collaborative arrangements with the other North East and Cumbria CCGs

with regard to commissioning arrangements for contracts with NHS

healthcare providers across the North East and Cumbria

Joint arrangements with the North and South of Tyne CCGs to determine

commissioning for health gain policies and to review and approve individual

funding requests, including conducting an appeals process

Joint arrangements with the North East CCGs to advise upon and make

recommendations to CCGs on high cost cancer drugs and high cost

treatments

Joint arrangements with the North East CCGs to provide a Partnership

Forum to work together with Trade Union and Professional Organisation

representatives to discuss issues relating to employment matters affecting

their employees

Sunderland City Council (section 75 and section 256) for Joint

Commissioning Arrangements

Sunderland City Council (section 75) for Community Equipment Services

Sunderland City Council (section 75) for Mental Capacity Act/Deprivation of

Liberty Safeguard

Sunderland City Council Health and Wellbeing Board (on which the CCG has

three voting seats)

Each of these groups either has an agreed governance structure in place with specific

roles, responsibilities and accountabilities or they are covered by individual CCGs'


66

governance arrangements where appropriate and agreed. Any investments and

decisions made by these groups are formally documented and reviewed regularly as

part of the CCG contracting and performance arrangements.

In addition, close working relationships have been established with partner

organisations in the local health community. Organisational arrangements are in place

for these partnership arrangements including provider trusts, local authorities and other

stakeholder and partner organisations. Close links have also been maintained with NHS

England, with quarterly assurance meetings being held to consider performance issues

and priorities across all the CCG activities.

During the year, the CCG has undertaken a self-assessment on its governance

processes as part of the assurance framework put in place by Cumbria,

Northumberland and Tyne and Wear Area Team (Area Team) of NHS England. The

Area team was assured the CCG governance framework was robust and did not raise

any issues for consideration.

Assessment of the Governing Body effectiveness and regard to the UK Corporate Governance Code. The CCG governance structure was subject to an in depth review by NHS England as

part of the authorisation process during January 2013. This was again further reviewed

following an application made by the CCG to amend its Constitution in November 2013.

On both occasions, NHS England was assured the CCG governance framework was

robust, enabling the CCG to discharge its functions effectively. This has been

reinforced by my self-certification that the clinical commissioning group has complied

with the statutory duties laid down in the NHS Act 2006 (as amended by the Health &

Social Care Act 2012).

Committee Atten dance Record 2013/14

Member Governing

Body

Executive

Committee

Audit

Committee

Quality, Safety

and Risk

Committee

Remuneration

Committee

Lay Members

Mrs Pat Taylor 7/8 3/3

(Chair)

3/3

Mrs Aileen

Sullivan

8/8 3/3 15/15

(Chair)

3/3

Mr Neil Weddle

(from

November

2/2


67

2013) Executive GPs

Dr Ian Pattison 8/8

(Chair)

6/10

Dr Ian Gilmour

(until March

2013)

7/8 9/10

Dr Jackie

Gillespie

5/8 9/10 13/15

Dr Henry Choi 7/8 9/10 12/15

Dr Gerry

McBride

5/8 9/10

Dr Valerie

Taylor

4/8 8/10

Executive Directors

Mr David

Gallagher*

8/8 9/10

(Chair)

As required 9/15

Mr Chris

Macklin*

7/8 9/10 3/3

(in

attendance)

Mrs Ann Fox*

(from May

2013)

7/8 8/10 7/11

Mrs Debbie

Burnicle

7/8

(in attendance)

9/10

(in attendance)

Dr Geoff

Stephenson

6/8

(in attendance)

8/10

(in attendance)

8/15

Ms Deanna

Lagun

(1st-30th

April

2013)

1/1

1/1

1/1

Executive Practice manager

Mrs Gloria

Middleton

3/8

(in attendance)

5/10

Executive Practice Nurse

Ms Florence

Gunn

(form August

2013)

4/7

Local Authority Representatives

Mr Neil Revely 3/8

(in attendance)

Ms Nonnie

Crawford

7/8

(in attendance)

6/10

(in attendance)



68

Prof Mike

Bramble

(from April

2013)

8/8 8/12

* Denotes Executive Director with voting right on the Governing Body.

In reviewing and assessing Governing Body effectiveness, the guidance provided on

effective corporate governance contained in the Financial Reporting Council’s UK

Corporate Governance Code, 2012 and the Guidance on Board Effectiveness 2011,

have been taken into account. The effectiveness of the Governing Body has been

assessed by its members using a self- assessment questionnaire based on the

principles outlined in the guidance highlighted. This has enabled the Governing Body to

undertake a detailed review of their effectiveness.

The questionnaire focused on leadership, effectiveness, accountability, remuneration

and relationships with stakeholders. Each section contained a number of questions

designed to enable governing body members to undertake a detailed self-assessment

of their effectiveness as both individuals and members of the governing body. Some

themes were highlighted, such as non-executive members having clearer objectives

and mechanisms in place for appraisals, the need to review the Constitution to ensure

its suitability now the CCG has been established for a year and members having

sufficient time to discharge their responsibilities effectively. The outcome of the self-

assessment will be used at a future development session to focus on these areas in the

coming year.

Having reviewed the effectiveness of the Governing Body’s governance framework and

arrangements in relation to the UK Corporate Governance Code and associated

guidance, I consider that the organisation has paid due regard to the principles and

standards of best practice.

NHS Sunderland’s Risk Management Framework Risk management is embedded in the activity of the CCG through:

The Risk Management Framework and its supporting policies and

procedures

The committee structure described earlier in this statement

The management processes (e.g. used a risk-based approach to help

prioritise planning and work programmes)

The Governing Body Assurance Framework


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Risk management skills training, including risk assessments of various types

and the mandatory and statutory training programme for all staff

Raising awareness of a counter fraud culture

The CCG risk management framework takes into account current guidance on risk

management best practice. The framework was prepared as part of the authorisation

process and reviewed and updated by the Audit Committee at its first meeting in July

2013.

The framework sets out the CCG’s approach to risk and the management of risk in the

fulfillment of its overall objective to commission high quality and safe services. In

addition, the adoption and embedding of an effective risk management framework and

processes helps to ensure that the reputation of the CCG is maintained and enhanced,

and its resources are used effectively to reform services through innovation, large-scale

prevention, improved quality and greater productivity.

The framework provides guidance for the systematic and effective management of risk.

Key elements of the framework include:

clear statements on the responsibilities of the Governing Body and its sub

committees as well as individual accountability for delivery of the framework

clear principles, aims and objectives of the risk management process

clear processes for the management of risk in commissioned services,

partnership working and the delivery of the Quality, Innovation, Productivity

and Prevention programme

a clearly defined process for assessing and managing risks, including

implementation and dissemination of the framework to all staff

details of the approach to be undertaken to assess and report risks, including

incident reporting, serious incidents and safeguarding

confirmation of the arrangements for reporting of and managing risks through

the risk register process

arrangements for monitoring and review of the framework.

The overall risk management approach ensures that the framework is coordinated

across the whole organisation and progress is reported effectively to the Governing

Body, Quality, Safety and Risk Committee and Audit Committee.

The CCG has adopted a standard matrix methodology in the application of the risk


70

rating criteria to ensure a consistent approach to the prioritisation of risks and the

effective targeting of resources. Risks are identified by assessing the consequence and

likelihood of that risk occurring, giving an overall rating of extreme, high, moderate or

low. This rating is recorded against the identified risk on the relevant risk register and

managed via a serious of identified controls and actions and progress is monitored via

the CCG’s governance processes. Each directorate within the CCG has its own risk

register to identify existing or prospective risks to the organisation. These registers are

supported by a corporate register, which focuses on the high and extreme risks that

have been identified to the delivery of the CCG’s strategic objectives. In addition, risks

are identified through our strategic planning process and monitored via our performance

management system that rates all objectives for risk to delivery.

During 2013/14, the registers have been reviewed on a bi-monthly basis by the Quality,

Safety and Risk Committee and on a quarterly basis by the Governing Body. A robust

system is in place to enable the directorates to manage their risks regularly, with

specialist support, advice and training available from the Head of Corporate Affairs and

North of England Commissioning Support Service (NECS).

The Governing Body agreed strategic objective risks to its corporate objectives, forming

the Assurance Framework. The objectives were developed following a Governing Body

development session held in July 2013. The principle risks and risk ratings were

identified using the CCG risk register to ensure alignment of any existing risks to the

corporate objectives. Supporting action plans have been developed as appropriate to

mitigate these risks and the Governing Body monitors progress to ensure delivery of the

objectives.

As Chief Officer, I maintain overall responsibility for delivering the assurance framework.

The Assurance Framework 2013/14 covered risks to the following objectives:

Ensure the CCG meets its public accountability duties

Maintain financial control and achieve performance targets

Maintain and improve the quality and safety of CCG commissioned services

Ensure the CCG involves patients and the public in commissioning and

reforming services

Identify and deliver the CCG’s key strategic priorities

Develop the CCG localities

Specific risks relating to the 2013/14 Assurance Framework included:

Establishing the risk management support from NECS


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Creating and implementing a robust Commissioning Plan and ensuring

patients’ rights were being adhered to as part of this

Ensuring robust performance management with providers, with a particular

focus on infection control rates and increased hospital activity

Working with providers to ensure all relevant contracts were in place and

being managed appropriately to ensure high quality safe services for the

residents of Sunderland and achieving value for money by reducing the risk

of a commissioning overspend

Ensuring the delivery of the recommendations for CCGs as a commissioner

from the Mid Staffordshire review

Demonstrating that the CCG has actively engaged with patients and the

public and have acted upon any feedback received in relation to patient

experience

Learning about and understanding the health needs of Sunderland residents

by working closely with Public Health

Establishing robust links with partner organisations to support the CCG to

deliver its strategic priorities

Ensuring true and meaningful engagement with all member practices to

ensure they are active participants within the CCG

A number of gaps in assurance and controls were identified in reviewing and agreeing

the Assurance Framework. These have been monitored as appropriate within the

committee structure.

Appropriate mitigations were also identified and implemented by management, with the

Governing Body and committee agendas being structured to ensure key risks and

issues were addressed over the year.

In addition, a number of audits have been conducted throughout the year focusing on

areas such as standards of business conduct, corporate decision making and risk

management. The outcomes of these audits have given the CCG a rating of significant

assurance for each of these areas.

The CCG developed a five year Commissioning Plan which described the long term

vision for health and social care of Sunderland. The risks to delivery of this Plan have

been systematically identified and quantified for all of the investment and disinvestment

initiatives as part of the planning process, using a risk-based assessment of likelihood

and consequence. The CCG Financial Framework also used this risk-based approach

to give a balanced financial plan year on year. Contingencies were identified within the

financial framework to ensure high level financial risks could be addressed. The local


72

prioritisation process established within the CCG also enables the balance of

investments and disinvestments to be robustly assessed and reviewed.

The CCG has a duty to work with partners to improve the health of the local population.

Partnerships can involve high levels of risk due to their complexities, making robust risk

management an essential element of partnership governance. The CCG has ensured

that any work carried out across the health and social care economy adhered to the

CCG principles of robust risk management, focusing on those areas considered to be of

highest risk and undertaking appropriate risk assessments and mitigating action plans

as necessary.

The CCG involves key stakeholders and the public in the management of risks through

its public Governing Body meetings. The risk register is a regular item on the public

agenda and there is an opportunity for them to ask questions on the risk register during

the meeting. In addition, key stakeholders and the public are invited to specific events

to discuss issues and topics in detail, which includes identifying and assessing relevant

risks. There is also the opportunity through the Local Engagement Boards to discuss

risks in an open forum and to help identify ways in which they should be managed. This

ensures the CCG captures the views of the public and key stakeholders and takes

these into account when developing mitigating action plans for any identified risks.

The CCG’s Internal Control Framework A system of internal control is the set of processes and procedures in place in the

clinical commissioning group to ensure it delivers its policies, aims and objectives. It is

designed to identify and prioritise the risks, to evaluate the likelihood of those risks

being realised and the impact should they be realised, and to manage them efficiently,

effectively and economically.

The system of internal control allows risk to be managed to a reasonable level rather

than eliminating all risk. It can therefore only provide reasonable and not absolute

assurances of effectiveness.

The system of internal control has been in place in the CCG for the year ended 31

March 2014 and up to the date of approval of the annual report and accounts.

The committee structure within the CCG has been established to ensure there are

robust reporting mechanisms and clear lines of accountability in place to provide

assurance to the Governing Body, and ultimately our members, that the CCG is

discharging its activities and functions effectively.


73

The Scheme of Delegation and Reservation sets out the responsibilities of the

membership, Governing Body and its sub-committees, the Chief Officer and other

directors to ensure the CCG discharges its functions appropriately. The Scheme is

explicit in defining where the responsibilities lie in delivering each of these key functions

and also provides a framework by which the Governing Body, on behalf of the

members, can seek assurance these are being done so appropriately.

The CCG has an assurance framework in place to identify gaps in control and provide

assurance against the delivery of the CCG’s corporate objectives. The previous section

on risk management describes the assurance framework in detail, highlighting the

corporate objectives and key risks to the delivery of these.

The controls identified within the framework were assessed as the key elements needed

to mitigate risks to delivery of the objectives as far as possible, act as a deterrent to

risks occurring and also provide a structured approach by which any identified risks

could be managed. The assurance framework also identifies gaps in control and/or

assurances to provide assurance to the Governing Body that these were being

addressed. The risk management framework (as described in the previous section)

supports the delivery of the objectives and forms part of the internal control framework.

The CCG financial framework also forms part of the internal control framework, with a

number of approved policies and procedures in place to ensure the CCG manages its

finance in accordance with national policy and guidelines. The CCG Constitution sets

out the prime financial policies and the Financial Scheme of Delegation, as approved by

the Governing Body, sets out the delegated limits for key individuals within the CCG.

This ensures these individuals have a clear framework in place within which they can

make financial decisions. Compliance with the Scheme is monitored by the Audit

Committee and Governing Body to ensure the delegated limits are being adhered to.

External Systems and Business Processes

The CCG currently contracts with a number of external organisations for the provision of

back office services and functions and as such has established an internal control

system to gain assurance from these. These include:

The provision of Oracle financial system and financial accounting support

from NHS Shared Business Services. The use of NHS Shared Business

Services is mandated by NHS England for all CCGs and is fundamental in

producing NHS England group financial accounts through the use of an

integrated financial ledger system.


74

The provision of financial accounting services from the North of England

Commissioning Support Unit.

The provision of payroll services from Northumbria Healthcare NHS

Foundation Trust.

The provision of the ESR payroll systems support from McKesson.

The provision of practice payment services via the Exeter system processed

by NHS England

Assurance on the effectiveness of the controls is received in part from an annual

Service Audit Report from the relevant service providers as well as additional testing of

controls by Sunderland CCG internal auditors.

Assurances from outsourced services

North of England Commissioning Support Service (NECS) One of the risks to the CCG identified by the Audit Committee was receiving adequate

assurances from the Commissioning Support Unit. The position has been considered by

Audit Committee in July and November 2013 and again in February 2014. It was noted

that risk exposure to the CCG from NECS was less than for many other local CCGs.

This is due to the CCG providing more in-house services as well as having an in-house

financial management service which has a number of financial procedures and controls

that were subject to independent audit review by Internal Audit. An outcome of

significant assurance has been provided in relation to this review.

Assurances on the operations of the support services provided by NECS were detailed

in the submission to the CCG in February 2014 from the findings from the NHS England

internal audit work carried out to date. This covered assurances on the operations of

services provided from April 2013 and an independent Service Audit Report providing

assurances on the effectiveness of controls for the period October 2013 to April 2014.

The overall objective of the internal audit work undertaken was to evaluate the

effectiveness of the control environment for NECS and provide assurance, to the NECS

and therefore NHS England, on the adequacy and effectiveness of the key controls in

operation. A summary of the key observations relevant to the services provided by

NECS and actions agreed as a result of the work were shared.

The issues identified relevant to the CCG included:


75

the lack of an IT disaster recovery plan at the time of the audit which has

since been remedied

segregation of duties for appropriate posting of journals. This was less

relevant for the CCG as the in-house financial management service creates

and posts most journals for the CCG. All control accounts managed on behalf

of the CCG by NECS, for which journal postings are carried out by NECS, are

independently reviewed on a monthly basis by the in-house financial

management service for any issues which are later discussed / resolved in

monthly review meetings

Assurances on the operation of the support services outsourced to NECS during the

period from 1 October 2013 to 31 March 2014 were provided by NHS England’s internal

auditors, Deloitte LLP, via means of an ISAE 3402 report issued in May 2014 (Service

Auditor Report). The report identified some weaknesses, none of which are considered

to materially affect the operations of the CCG.

The weaknesses identified in the ISAE 3402 were:

New employees or amendments made to existing employees were

sometimes processed without being appropriately authorised in line with CCG

authorised signatory lists. The CCG currently employs a relatively small

number of staff and it is therefore felt that the exposure to this risk is limited

as a result. Additional controls are in place within the CCG to ensure staff are

being paid at appropriate levels and the appropriate number of hours via sign

off from managers in the quarterly staffing reports. This process has been

managed through the CCG’s in-house financial management team.

Following the reporting of this weakness the CCG implemented further

controls to mitigate this. This included an independent review of all new

employee or amendments to existing employees by the Head of Finance.

Journal entries were not being periodically reviewed in line with stated

controls to ensure that segregation of duties was maintained. As previously

discussed this was a weakness for the period April 2013 to 31 September

2013.

The CCG does not consider this to be materially relevant as the in-house

financial management team processes most journals. The CCG effectively


76

reviews the output of all NECS journals through monthly review meetings

(with NECS) and scrutiny of the control accounts.

Forecasts provided to customers were not always evidenced to be accurate,

complete, prepared on a valid basis and provided to customers for agreement

in a timely manner. The work carried out by Deloitte could not confirm that

forecasts were accurate, complete and prepared on a valid basis as no formal

evidence was kept to show that the final forecast provided by the NECS

commissioning finance team, or any adjustments after this, were

independently reviewed or checked before the figures were included within

relevant CCG Board reports.

This weakness was not considered to be relevant to the CCG as all

forecasting is completed by the in-house financial management team. The

CCG does not contract with NECS for the provision of this service.

Differences when NECS reconciled activity data from the Secondary Uses

Service (SUS) with data received directly from providers, which prevented

reconciliations being completed in line with agreed timescales. This issue

gave rise to a weakness in preparing accurate and timely forecasts of activity

data.

This was not deemed materially relevant as the CCG has its own experienced

in-house contracting team who review and forecast activity data.

As a result of the activity data weaknesses, a further weakness was identified

by Deloitte with regards to validating payments made by NECS to providers

on behalf of CCGs were only for services provided on behalf of the relevant

CCG.

This is not deemed to be relevant to the CCG as an in-house contracting

team is utilised to validate payments to providers.

NHS Business Services Authority (BSA)

The CCG relies on the BSA for prescribing spend reporting. The NHS BSA Information

Services wrote to all CCGs on 14 February 2014 to advise that ‘an error had been found

in the analysis used to calculate the forecast profile used for the November PMD

reports’.

The CCG was unaffected by this forecasting error as the forecasting for Sunderland


77

was manually calculated and further validated by the CCG’s in-house medicines

optimisation team through an internal review and discussion process.

Information Governance The NHS Information Governance Framework sets out the processes and procedures

by which the NHS handles information about patients and employees, in particular

personal identifiable information. The NHS Information Governance Framework is

supported by an information governance toolkit and the annual submission process

provides assurances to the clinical commissioning group, other organisations and to

individuals that personal information is dealt with legally, securely, efficiently and

effectively.

The Governing Body is aware of the importance of maintaining high standards of

information governance and securing confidentiality of patients’ information. As Senior

Information Risk Owner, I ensure this function is discharged appropriately, with the

Quality, Safety and Risk Committee maintaining oversight of this. The Medical Director

is our Caldicott Guardian and we are both supported in our roles via a service line

agreement with NECS to provide specialist advice, support and training on information

governance issues.

We place high importance on ensuring there are robust information governance

systems and processes in place to help protect patient and corporate information. The

CCG has an information governance framework in place consisting of an approved

strategy, a suite of approved policies and procedures, and a programme of mandatory

training for information risk management and incident management. This framework

helps to ensure all staff are aware of their information governance roles and

responsibilities and it is embedded into everyday practice of the CCG. Appropriate

training is also readily available for all staff and the CCG has achieved a high uptake of

this training during the year.

The CCG has also adopted and implemented the Health and Social Care Information

Centre’s (HSCIC), ‘Checklist for Reporting, Managing and Investigating Information

Governance Serious Incidents Requiring Investigating’. The CCG has put in place a

standard operating procedure for the reporting of level 2 information governance

incidents to the Information Commissioner. This procedure outlines the scope of

responsibilities and details the reporting procedures to be used in the event of a data

security breach. I can confirm the CCG has had no serious information governance

breaches in year.

The Information Governance Toolkit has been provided by the HSCIC to support

performance monitoring of progress on Information Governance in the NHS. The CCG


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has undertaken a self-assessment against the specified criteria within the toolkit and

assessed ourselves as being overall compliant by the 31 March 2013.

The CCG complies with its statutory duty to respond to requests for information. During

the year the CCG received 208 requests under the Freedom of Information Act 2000

and 2 requests under the Data Protection Act 1998. I can confirm that they were all

responded to within the statutory timescales.

Pension Obligations 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 into 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.

Equality, Diversity and Human Rights Obligations

Control measures are in place to ensure that all the clinical commissioning group’s

obligations under equality, diversity and human rights legislation are complied with.

Progress against these measures is monitored by the Executive Committee.

Health and Safety Obligations

The CCG has put in place robust control measures to ensure that all statutory

obligations relating to health and safety legislation are met. Progress against these

measures is monitored by the Quality, Safety and Risk Committee.

Sustainable Development Obligations The clinical commissioning group is required to report its progress in delivering against

sustainable development indicators.

We are developing plans to assess risks, enhance our performance and reduce our

impact, including against carbon reduction and climate change adaptation objectives.

This includes establishing mechanisms to embed social and environmental

sustainability across policy development, business planning and in commissioning.

We will ensure the clinical commissioning group complies with its obligations under the

Climate Change Act 2008, including the Adaptation Reporting power, and the Public

Services (Social Value) Act 2012.

We are also setting out our commitments as a socially responsible employer.


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Risk Assessment in Relation to Governance, Risk Management and Internal Control The CCG has ensured that the risk management processes have embedded a clear

process for identifying, analysing, evaluating, controlling, monitoring and communicating

risk. The types of risks we face as a CCG include corporate (accountability to the

public), clinical (associated with our commissioning responsibilities), reputational and

financial risks. The CCG committee structure has been established to ensure there are

clear terms of reference for each with clear lines of accountability both between each

committee and the Governing Body.

Whenever risks to the achievement of the CCG’s objectives were identified, an

assessment has been undertaken to ensure the appropriate controls were put in place

using a consequence and likelihood matrix based on national guidance. Using this

standardised tool has ensure the CCG has applied the risk management principles in a

consistent manner using agreed definitions and evaluation criteria. This has enabled

more robust decisions to be made on any resources needed to mitigate the risk.

The CCG identified some high risks during the year and mitigating action plans were put

in place to address these. These risks have been monitored closely by the Quality,

Safety and Risk Committee and Governing Body.

These risks included:

Healthcare Acquired Infections (HCAI)- performance of City Hospitals

Sunderland in relation to meeting the required targets relating to healthcare

acquired infections, in particular MRSA and C.Difficile. A comprehensive

integrated action plan was developed with recommendations for all health

and social providers and the Local Authority across Sunderland. An

independent review of the action plan was commissioned to provide external

assurance on the robustness of the plan. The HCAI Improvement Group

have submitted regular updates to the Executive and Quality, Safety and

Risk Committees to demonstrate progress.

Ambulance handovers and delays – robust reporting mechanisms were put in

place to monitor the number of breaches and close partnership working

between the CCG, North East Ambulance Service NHS Foundation Trust and

City Hospitals to help resolve the issue. Additional capacity was identified to

help resolve the issue. Regular updates were provided to the Executive and

Quality, Safety and Risk Committees to demonstrate progress.

A&E attendances – the number of attendances within Sunderland continued

to be high during the year. A number of mechanisms were put in place to


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address this, including weekly monitoring and a workshop with partners to

focus specifically on A&E services. A full review of surge and capacity plans

has been completed and the outcome reviewed at the Unscheduled Care

Board. A local campaign was designed and ran during January to March

2014 to promote the appropriate use of healthcare services, with a particular

focus on A&E.

There were no risks to the CCG’s licence and the one initial authorisation condition was addressed In May 2013 with the appointment of the Governing Body nurse.

The CCG has robust arrangements in place to monitor the CCG’s performance against

agreed objectives and targets. The assurance framework is used to identify any risks to

the agreed corporate objectives and to highlight any gaps in assurance and/or control in

relation to these. The Governing Body also receives regular reports to its public

meetings on the CCG’s performance against the six domains of the effective clinical

commission monitored as part of NHS England’s Assurance Framework. The

Governing Body also receives an update of the full risk register on a quarterly basis to

provide additional scrutiny and assurance that risks are being managed appropriately,

with robust mitigating action plans as necessary.

Risk registers are a standing item on the agenda of the Quality, Safety and Risk

Committee as well as any high level, specific risks being separate items on the agenda

when they require further in depth discussion and monitoring. Risks are also reported

on an exceptional basis to the Executive Committee as appropriate and the Audit

Committee reviews the risk register and assurance framework periodically to provide

additional overview and scrutiny that they are being managed effectively.

The CCG has not had any significant lapses in data security during the year and

therefore no incidents have been reported to the Information Commissioner.

Review of economy, efficiency and effectiveness of the use of resources The business rules for CCGs during 2013/14 were determined by NHS England and

from a financial perspective these were as follows:

Spend 2% of our allocation on non-recurrent schemes only

Create a 0.5% contingency

Deliver a surplus of not less than 1% of allocation

The financial plans and budgets approved by the Governing Body in April 2013 clearly

demonstrated achievement of these goals. The level of surplus for the CCG was

agreed at 4% which was considerably in excess of the minimum requirement.


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The Governing Body agreed to deliver a surplus in excess of the minimum to try and

protect the organisation from future tighter financial constraints. Any surplus in excess

of the minimum will be available to the CCG in future years to assist in the management

of financial risk. The CCG also benefitted by being in receipt of non-recurrent funding

as its share of the accumulated surplus made by the predecessor body, Sunderland

Teaching Primary Care Trust. Plans for future years outline management of this

surplus.

Throughout the year we have constantly reported delivery against our plans which

demonstrates robust financial planning, control and effective uses of resources.

Quality, Innovation and Improvement Programmes have also been delivered

demonstrating sound use of resources, economy, efficiency and effectiveness.

Review of the effectiveness of risk management and internal control As Accountable Officer, I have responsibility for reviewing the effectiveness of the

system of internal control.

Capacity to Handle Risk The CCG is committed to commissioning high quality and safe services and

demonstrates leadership in risk management through the Risk Management

Framework. The Framework sets out clear roles and responsibilities within the CCG to

implement the risk management process.

The responsibility for risk management is identified at all levels across the CCG, from

Governing Body members, directors and to all managers and staff.

As Chief Officer, I have overall responsibility to ensure the implementation of the

framework with supporting risk management systems and internal control. I also ensure

an appropriate committee structure is in place to meet all the statutory requirements and

ensure positive performance towards the achievement of the CCG’s strategic priorities.

Day to day responsibility for risk management is delegated to the Head of Corporate

Affairs.

The Chief Finance Officer provides expert professional advice to the Governing Body on

the efficient and economic use of the CCG’s financial resources. This includes ensuring

the CCG has appropriate arrangements in place for audit and identifying risks and

mitigating actions in the delivery of QIPP.

The Medical Director and Director of Nursing, Quality and Safety and six elected GPs

promote risk management processes with the CCG’s member practices.


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All senior leaders within the CCG have a responsibility to incorporate risk management

within all aspects of their work in line with the requirements set out in the framework.

Appropriate training has also taken place over the year to enable senior leaders to

undertake their risk management duties appropriately.

The risk management framework acknowledges that risk is unavoidable. The CCG will

take action to manage risk in a way that it can justify to a level which is tolerable. The

amount of risk that is judged to be tolerable and justifiable is known as the ‘risk

appetite’.

The Governing Body discussed the CCG’s appetite for risk in its development sessions

on 23 April and 25 June 2013 where we considered our risk appetite to be open and

seeks to innovate and choose options that offer potentially higher rewards whilst

acknowledging there may be a greater inherent risk in doing so. Taking this approach

helps to ensure the CCG supports a varied and diverse approach to commissioning,

particularly to improve outcomes for patients whilst achieving efficiency and value for

money.

The Governing Body maintains oversight of the internal control and risk management

frameworks. It receives regular reports on issues of finance, performance and risk

issues and seeks assurance that these are being managed within appropriate delegated

limits, specified objectives and robust action plans. The role of the Governing Body is to

seek this assurance on behalf of the CCG members and ensure the CCG fulfills its

statutory duties and functions.

The Quality, Safety and Risk Committee (QSRC) described earlier is the main

committee with responsibility for risk management. The committee receives regular

information at its business meetings to review progress against highlighted risks and

issues and to provide assurance to the Governing Body that progress is being made

towards mitigating these. The committee reviews the risk register in detail as part of

this.

The QSRC membership includes a number of clinicians as well as appropriate senior

management representation from across the CCG functions. The committee receives

regular updates of the full CCG risk register, whilst maintaining a focus on the high and

extreme risks. In addition, specific risks are reviewed in detail in the relevant sub-

committees such as the infection control and safeguarding groups.

The Audit Committee maintains oversight of the CCGs risk management and internal


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control arrangements. The committee reviews the Governing Body Assurance

Framework to identify any gaps in controls and assurances and provides assurance to

the Governing Body that the CCG is discharging its functions appropriately.

The Executive Committee reviews key risks and issues on an exception basis when

required for additional scrutiny.

Internal Audit has also undertaken a number of audits throughout the year, in particular

focusing on the CCG’s risk management, standards of business conduct and internal

control arrangements. Each of these audits reviewed the relevant policies and

procedures in place, as well as responsibilities of key individuals in delivering these

functions. The CCG was given an outcome of significant assurance for these audits.

Review of Effectiveness

My review of the effectiveness of the system of internal control is informed by the work

of the internal auditors and the executive managers and clinical leads within the clinical

commissioning group who have responsibility for the development and maintenance of

the internal control framework. I have drawn on performance information available to

me. My review is also informed by comments made by the external auditors in their

management letter and other reports. I have been advised on the implications of the

result of my review of the effectiveness of the system of internal control by the

Governing Body and Audit Committee and a plan to address weaknesses and ensure

continuous improvement of the system is in place.

First year of the CCG – development of the internal control environment

As this was the first year of the CCG, I acknowledge that controls have naturally

developed and become more embedded as the organisation has progressed through

this first year of its existence. We will keep the internal control environment under

review as the organisation matures.

Significant internal control issue arising - part-year assurance from North of

England Commissioning Support Service

Many of the fundamental financial, governance and commissioning processes of the

CCG are provided under a Service Level Agreement by North of England

Commissioning Support Service (NECS).

NECS came into existence on the 1st April 2013 following the organisational structure

changes in the NHS from the implementation of the Health and Social Care Act 2012.

The CCG received a detailed Service Auditor Report (SAR) from NECS which sets out

the control activities it undertook for the CCG, the adequacy of the design of these


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controls, and their operational effectiveness. However, as NECS has been utilising the

first two quarters of the 2013/14 financial year to review and implement systems of

control for services, it will not be possible for a full 12 month Service Audit Report to be

provided for the 2013/14 financial year.

In order to provide assurance on the effectiveness of controls in NECS for the first six

months of 2013/14, relevant aspects of internal audit work which has been undertaken

to evaluate the effectiveness of the control environment have been shared with the

CCG. NECS has further committed to share with the CCG an update on how they are

progressing with the implementation of agreed actions on a periodic basis. In addition,

as one of the larger CCGs in the North East, Sunderland CCG has taken steps to

strengthen its control environment, including increasing its own finance capacity,

developing procedure notes and controls such as ensuring segregation of appropriate

duties of staff and reviewing control account and bank reconciliations carried out by

NECS.

For the second half of the 2013/14 financial year NECS issued an independent SAR

produced by their internal auditors (Deloitte) which reviewed the key business process

controls to opine on whether control activities were designed and operating effectively in

order that control objectives be achieved. The SAR highlighted a number of

weaknesses in systems and processes operated by NECS as outlined on pages 75 to

77 of the annual report. Mitigating actions undertaken by NHS Sunderland CCG to

reduce any consequential risks have also been explained on pages 75 to 77 and in the

paragraph above.

The means of assuring that the gaps and controls identified in NECS for the first six

months and remainder of the year were effectively managed and mitigated are

predominantly based upon the following:

The provision of “in house” teams / structures demonstrates the CCG is

significantly less reliant on NECS. Structures were populated mainly form staff in

predecessor bodies (Primary Care Trusts) thus ensuring continuity and avoiding

loss of organisational memory in terms of processes, systems and controls.

Knowing the potential for risk in any new system the CCG agreed a

comprehensive “root and branch” Internal Audit Plan concentrating on key / core

systems for the full year. As demonstrated in the Head of Internal Audit Opinion

all but one report gained significant assurance.

Regular reviews of NECS outputs were undertaken by senior finance and

contracting teams in the CCG. Consequently risks / gaps identified were

mitigated by additional controls instigated by “in house” teams.


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Robust management of NECS contract monitoring for all services provided.

Results were communicated with wider service line leads in the CCG ensuring a

full feedback loop was in place to resolve and mitigate any issues.

Following completion of the planned audit work for the financial year for the clinical

commissioning group, the Head of Internal Audit issued an independent and objective

opinion on the adequacy and effectiveness of the clinical commissioning group’s system

of risk management, governance and internal control. The Head of Internal Audit

Opinion is included in full below.

Head of Internal Audit Opinion The purpose of my Head of Internal Audit Opinion is to contribute to the assurances

available to the Accountable Officer and the Board which underpin the Board’s own

assessment of the effectiveness of the organisation’s system of internal control. This

opinion will in turn assist the Board in the completion of its Annual Governance

Statement.

My opinion is set out as follows:

overall opinion;

basis for the opinion; and

commentary.

My overall opinion is that:

On the basis of work carried out in accordance with the Annual Internal Audit Plan 2013/14,

significant assurance can be given that there is a generally sound system of internal

control, designed to meet the organisation’s objectives, and that controls are generally

being applied consistently. However, if a weakness in the design and/or inconsistent

application of controls is identified, it could put the achievement of a particular objective at

risk.

The basis for forming my opinion is as follows:

an assessment of the design and operation of the underpinning Assurance

Framework and supporting processes;

an assessment of the range of individual opinions arising from risk-based

audit assignments, contained within internal audit risk-based plans that have

been reported throughout the period. This assessment has taken account of


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the relative materiality of these areas and management’s progress in respect

of addressing control weaknesses.

Reliance has not been placed on any third party assurances.

The commentary below provides the context for my opinion and together with the

opinion should be read in its entirety.

The design and operation of the Assurance Framework

The Board Assurance Framework has been developed during 2013/14. It is based on

the CCG’s strategic objectives and an analysis of the principal risks to achieving those

objectives. The key controls that have been put in place to manage the risks have been

documented, and the sources of assurance for individual controls have been identified.

It has been assessed by internal audit that the Assurance Framework is effective in

bringing together all of the activities and objectives of the CCG. It provides the CCG

with a comprehensive mechanism for the management of the principal risks to meeting

its strategic objectives and supports the compilation of the Annual Governance

Statement. Although there are a number of gaps in control, plans were put in place to

mitigate or eradicate the gaps and these are being followed.

The CCG has developed risk management processes that are operating within the

organisation. A risk management framework, supported by appropriate procedures, is

in place. The Quality Safety and Risk Committee oversee the risk management agenda

and report to the Governing Body. Together with the Audit Committee, they provide

assurance to the Governing Body on the systems and processes by which the

organisation leads, directs and controls its functions in order to achieve its strategic

objectives.

My opinion is derived from the completion of a range of risk-based internal audit

assignments, which have been undertaken in accordance with the Annual Internal Audit

Plan 2013/14. A table outlining these individual opinions is attached.

The outcome of internal audit work is reported regularly to the Audit Committee and will be summarised in the Annual Internal Audit Report 2013/14. Significant assurance has been given for all areas, with the exception of Business Continuity Planning for which limited assurance has been given.

Definitions of assurance levels and risk ratings are set out at Appendix 1.

Progress on the implementation of action agreed is subject to detailed on-going review

by management and the Audit Committee. Taking into account all of my findings, and


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the CCG’s actions in response to issues raised, I consider that there are no areas of

significant weakness remaining that are relevant to the preparation of the Annual

Governance Statement.

Acknowledgement

The assistance provided by Sunderland Clinical Commissioning Group staff during the

course of our work is greatly appreciated.

Amanda Bellis

Interim Head of Internal Audit

April 2014


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Appendix 1: Individual Assurance Opinions

Audit Area Assurance Opinion

Financial planning Significant assurance

Standards of business conduct Significant assurance

Corporate decision making Significant assurance

Risk Management and Assurance Framework Significant assurance

Commissioning for health inequalities Significant assurance

Data quality Significant assurance

Safeguarding Significant assurance

Monitoring SLA with NECS Significant assurance

Financial systems - accounts receivable, non-pay expenditure, cash and bank /

treasury management, ordering and receipt of goods, payroll Significant assurance

Serious incident reporting / national alert systems Significant assurance

Contract monitoring Significant assurance

Complaints / patient experience Significant assurance

Joint commissioning with local authority Significant assurance

Continuing healthcare Significant assurance

Developing and implementing strategic vision Significant assurance

Communication and engagement/ Engaging CCG members Significant assurance

Progress against organisational development plan / leadership development Significant assurance


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Audit Area Assurance Opinion

Financial incentives for quality Reported as part of Performance Framework

QIPP / resource releasing initiatives Significant assurance

Performance framework/ Financial incentives for quality Significant assurance

Information governance Significant assurance

Response to the Francis enquiry Significant assurance

Business Continuity Planning Limited assurance

Engaging CCG members Reported as part of Communication and Engagement


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Appendix 2: Definitions – assurance levels and risk ratings

Level

Description

Significant Significant assurance can be given that there is a generally sound system of internal control, designed to meet the

organisation’s objectives, and that controls are generally being applied consistently. However, some weaknesses in the

design and/or inconsistent application of controls, put the achievement of particular objectives at risk.

Limited

Limited assurance can be given as weaknesses in the design, and/or inconsistent application of controls, put the achievement

of the organisation’s objectives at risk in a number of the areas reviewed.

Risk ratings

Risk rating Assessment rationale

High

Significant weakness in internal control and/or non-compliance with statutory requirements or Group policy that could lead to

exposure of the Group to material loss or public criticism. This should be addressed urgently. This risk rating is intended to be

equivalent to the Group’s risk gradings of extreme or high.

Medium

Weakness that could undermine the system of internal control or non-compliance with Group policy but is not fundamental.

This should be addressed as soon as possible. This risk rating is intended to be equivalent to the Group’s risk grading of

moderate.

Low

Improvement in control that represents best practice or potential efficiency savings but where the weakness is unlikely to compromise

internal control. This risk rating is intended to be equivalent to the Group’s risk grading of low.


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During the year the Internal Audit issued the following audit reports with a conclusion of

limited assurance:

• One high risk issue was raised due to the lack of a fully documented

business continuity plan for the CCG and the absence of any business

impact analyses, as specified in the NHS Core Standard 7. It has been

agreed that the CCG will conduct these analyses to identify the critical

activities of the organisation and the risk of business interruption to these

activities. Given the significance of this issue the CCG agreed to develop and

implement an action plan with a target date for completion of May 2014.

During the year the Internal Audit issued the following audit reports with a conclusion of

no assurance:

• Internal Audit has not issued any audit reports with a conclusion of no

assurance.

Data Quality

The Governing Body and member practices are aware of the importance of maintaining

high standards of information governance and securing confidentiality of patients’

information. As Senior Information Risk Owner, I ensure this function is discharged

appropriately, with the Quality, Safety and Risk Committee maintaining oversight of this.

The Medical Director is our Caldicott Guardian and we are both supported in our roles

via a service line agreement with NECS to provide specialist advice, support and

training on information governance issues.

The Governing Body and member practices are satisfied with the quality of data used to

inform decision-making and planning to deliver the commissioning agenda and to

ensure the CCG meets its statutory requirements.

Business Critical Models

I can confirm that an appropriate framework and environment is in place to provide

quality assurance of business critical models, in line with the recommendations in the

Macpherson report.

I can confirm that all business critical models have been identified and that information

about quality assurance process for those models has been provide to the Analytical

Oversight Committee, chaired by the chief Analyst in the Department of Health.


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Data Security

The CCG has submitted a satisfactory level of compliance with the Information

Governance Toolkit assessment. The CCG has not had any Serious Incidents relating

to data security during the time period covered by this report.

Discharge of Statutory Functions

During the establishment of the CCG, the arrangements put in place by the clinical

commissioning group and explained within the corporate governance framework were

developed with extensive expert external legal input, to ensure compliance with all

relevant legislation. That legal advice also informed the matters reserved for

Membership Body and Governing Body decision and the scheme of delegation.

In light of the Harris Review, the clinical commissioning group has reviewed all of the

statutory duties and powers conferred on it by the National Health Service Act 2006 (as

amended) and other associated legislative and regulations. As a result, I can confirm

that the clinical commissioning group is clear about the legislative requirements

associated with each of the statutory functions for which it is responsible, including any

restrictions on delegation of those functions.

Responsibility for each duty and power has been clearly allocated to a lead director.

Directorates have confirmed that their structures provide the necessary capability and

capacity to undertake all of the clinical commissioning group’s statutory duties.

Conclusion

The CCG has had a significant internal control issue over the past year arising from

receiving only part-year assurance from North of England Commissioning Support

Service. In addition, the Head of Internal Audit Opinion concluded that only limited

assurance could be given for business continuity. However, action was taken in year in

relation to the NECS issue to ensure this was addressed and also action is now

underway in relation to business continuity to ensure this is addressed early in the

coming year.

As Chief Officer of the CCG, I have reviewed the governance and risk management

processes within the CCG and am assured the CCG had an effective system of internal

control over the previous year.


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David Gallagher


3 June 2014


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Report by the Auditors to the members of the CCG

INDEPENDENT AUDITORS’ REPORT TO THE ACCOUNTABLE OFFICER FOR NHS

SUNDERLAND CLINICAL COMMISSIONING GROUP

We have audited the financial statements of NHS Sunderland Clinical Commissioning

Group for the year ended 31 March 2013 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. The financial reporting framework that

has been applied in their preparation is applicable law and the accounting policies

directed by the Secretary of State with the consent of the Treasury as relevant to the

National Health Service in England.

We have also audited the information in the Remuneration Report that is subject to

audit, being:

the table of salaries and allowances of senior managers [and related narrative

notes] on page 40;

the table of pension benefits of senior managers [and related narrative notes] on page 41; and

the table of pay multiples [and related narrative notes] on page 42.

This report is made solely to the Accountable Officer for NHS Sunderland Clinical

Commissioning Group 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 the Accountable Officer and auditors

As explained more fully in the Statement of Responsibilities in respect of the accounts,

the Accountable Officer is responsible for overseeing the preparation of the financial

statements and for being satisfied that they give a true and fair view. Our responsibility

is to audit and express an opinion on the financial statements in accordance with

applicable law and International Standards on Auditing (UK and Ireland). Those

standards also require us to comply with the Auditing Practices Board’s Ethical

Standards for Auditors.

Scope of the audit of the financial statements


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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 clinical

commissioning group’s circumstances and have been consistently applied and

adequately disclosed; the reasonableness of significant accounting estimates made by

the clinical commissioning group; and the overall presentation of the financial

statements. In addition, we read all the financial and non-financial information in the

annual report to identify material inconsistencies with the audited financial statements. If

we become aware of any apparent material misstatements or inconsistencies we

consider the implications for our report.

In addition, we are required to obtain evidence sufficient to give reasonable assurance

that the expenditure and income 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 our 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 our opinion the financial statements:

give a true and fair view of the financial position of NHS Sunderland Clinical

Commissioning Group as at 31 March 2014 and of its net operating costs for the

year then ended; and

have been prepared properly 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 our opinion:

the part of the Remuneration Report subject to audit has been prepared properly

in accordance with the requirements directed by the Secretary of State with the


96

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 we report by exception

We report to you if:

in our opinion the governance statement does not reflect compliance with the

Department of Health’s Guidance;

we refer the matter to the Secretary of State under section 19 of the Audit

Commission Act 1998 because we have reason to believe that the clinical

commissioning group, or an officer of the clinical commissioning group, is about

to make, or has made, a decision involving unlawful expenditure, or is about to

take, or has taken, unlawful action likely to cause a loss or deficiency; or

we issue a report in the public interest under section 8 of the Audit Commission

Act 1998

We have nothing to report in these respects

Conclusion on the CCG’s arrangements for securing economy, efficiency and

effectiveness in the use of resources

We are required under Section 5 of the Audit Commission Act 1998 to satisfy ourselves

that the clinical commissioning group 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 us to report any matters that prevent

us being satisfied that the audited body has put in place such arrangements.

We have undertaken our audit in accordance with the Code of Audit Practice, having

regard to the guidance issued by the Audit Commission. We have considered the

results of the following:

our review of the annual governance statement; and

the work of other relevant regulatory bodies or inspectorates, to the extent that

the results of this work impact on our responsibilities at the clinical

commissioning group.

As a result, we have concluded that there are no matters to report.


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Certificate We certify that we have completed the audit of the accounts of NHS Sunderland Clinical

Commissioning Group in accordance with the requirements of the Audit Commission

Act 1998 and the Code of Audit Practice issued by the Audit Commission.

Cameron Waddell Director and Engagement Lead on behalf of Mazars LLPThe Rivergreen Centre Aykley Heads Durham DH1 5TS

June 2014


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Appendix 1 - Annual Accounts

NHS Sunderland Clinical Commissioning Group - Annual Accounts 2013-14

Page Number

The Primary Statements:

Statement of Comprehensive Net Expenditure for the year ended 31st March 2014 1

Statement of Financial Position as at 31st March 2014 2

Statement of Changes in Taxpayers' Equity for the year ended 31st March 2014 3

Statement of Cash Flows for the year ended 31st March 2014 4

Notes to the Accounts

Accounting policies 5

Other operating revenue 17

Revenue 17

Employee benefits and staff numbers 18

Operating expenses 21

Better payment practice code 22

Operating leases 23

Property, plant and equipment 24

Trade and other receivables 25

Cash and cash equivalents 25

Trade and other payables 26

Borrowings 26

Provisions 26

Contingencies 26

Financial instruments 27

Operating segments 29

Pooled budgets 30

Intra-government and other balances 30

Related party transactions 31

Events after the end of the reporting period 33

Losses and special payments 33

Financial performance targets 33

CONTENTS


Statement of Comprehensive Net Expenditure for the year ended

31 March 20142013-14

Note £000

Administration costs and programme expenditure

Gross employee benefits 4.1 3,086

Other costs 5 412,817

Other operating revenue 2 (1,434)

Net operating costs before interest 414,469

Other operating revenue 0

Other (gains)/losses 0

Finance costs 0

Net operating costs for the financial year 414,469

Of which:

Administration costs

Gross employee benefits 4.1 2,751

Other costs 5 3,370

Other operating revenue 2 (21)

Net administration costs before interest 6,100

Programme expenditure

Gross employee benefits 4.1 335

Other costs 5 409,447

Other operating revenue 2 (1,413)

Net programme expenditure before interest 408,369

Total comprehensive net expenditure for the year 414,469

1


Statement of Financial Position as at

31 March 201431 March 2014

Note £000

Non-current assets:

Property, plant and equipment 8 178

Total non-current assets 178

Current assets:

Trade and other receivables 9 1,747

Cash and cash equivalents 10 50

Total current assets 1,797

Total assets 1,975

Current liabilities

Trade and other payables 11 21,886

Total current liabilities 21,886

Total assets less current liabilities (19,911)

Total assets employed (19,911)

Financed by taxpayers’ equity

General fund (19,911)

Total taxpayers' equity: (19,911)

The notes on pages 5 to 33 form part of this statement

David Gallagher


3 June 2014

The financial statements on pages 1 to 33 were approved by the Governing Body on 3 June 2014 and

signed on its behalf by:

2


Statement of Changes In Taxpayers Equity for the year ended

31 March 2014General

fund

Total

reserves

£000 £000

Changes in taxpayers’ equity for 2013/14

Balance at 1 April 2013 0 0

Transfer of assets and liabilities from closed NHS Bodies as a result of the

1 April 2013 transition

255 255

Adjusted CCG balance at 1 April 2013 255 255

Changes in CCG taxpayers’ equity for 2013/14:

Net operating costs for the financial year (414,469) (414,469)Net recognised CCG expenditure for the financial year (414,214) (414,214)

Net Parliamentary funding 394,303 394,303

Balance at 31 March 2014 (19,911) (19,911)

3


Statement of Cash Flows for the year ended

31 March 20142013-14

Note £000

Cash flows from operating activities

Net operating costs for the financial year (414,469)

Depreciation and amortisation 5 77

(Increase)/decrease in trade & other receivables (1,747)

Increase/(decrease) in trade & other payables 21,886

Net cash outflow from operating activities (394,253)

Net cash outflow before financing (394,253)

Cash flows from financing activities

Net funding received 394,303

Net cash inflow from financing activities 394,303

Net increase in cash and cash equivalents 10 50

Cash and cash equivalents at the beginning of the financial year 0

Cash and cash equivalents (including bank overdrafts) at the end of the financial

year 50

4


Notes to the financial statements

1. Accounting Policies

1.1 Going Concern

1.2 Accounting Convention

1.3 Acquisitions & Discontinued Operations

1.4

NHS England has directed that the financial statements of clinical commissioning groups shall meet the

accounting requirements of the Manual for Accounts issued by the Department of Health. Consequently, the

following financial statements have been prepared in accordance with the Manual for Accounts 2013-14 issued

by the Department of Health. The accounting policies contained in the Manual for Accounts follow International

Financial Reporting Standards to the extent that they are meaningful and appropriate to clinical commissioning

groups, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the

Manual for Accounts permits a choice of accounting policy, the accounting policy which is judged to be most

appropriate to the particular circumstances of the clinical commissioning group for the purpose of giving a true

and fair view has been selected. The particular policies adopted by the clinical commissioning group are

described below. They have been applied consistently in dealing with items considered material in relation to the

accounts.

In accordance with the Directions issued by NHS England comparative information is not provided in these

financial statements.

These accounts have been prepared on the going concern basis.

Public sector bodies are assumed to be going concerns where the continuation of the provision of a service in

the future is anticipated, as evidenced by inclusion of financial provision for that service in published documents.

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

provided (using the same assets, by another public sector entity) in determining whether to use the concept of

going concern for the final set of financial statements. If services will continue to be provided the financial

statements are prepared on the going concern basis.

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.

Activities are considered to be ‘acquired’ only if they are taken on 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 public sector body to another.

Movement of Assets within the Department of Health Group

Transfers as part of reorganisation fall to be accounted for by use of absorption accounting in line with the

Government Financial Reporting Manual, issued by HM Treasury. The Government Financial Reporting Manual

does not require retrospective adoption, so prior year transactions (which have been accounted for under merger

accounting) have not been restated. Absorption accounting requires that entities account for their transactions in

the period in which they took place, with no restatement of performance required when functions transfer within

the public sector. Where assets and liabilities transfer, the gain or loss resulting is recognised in the Statement

of Comprehensive Net Expenditure, and is disclosed separately from operating costs.

Other transfers of assets and liabilities within the Department of Health Group are accounted for in line with IAS

20 and similarly give rise to income and expenditure entries.

For transfers of assets and liabilities from those NHS bodies that closed on 1 April 2013, HM Treasury has

agreed that a modified absorption approach should be applied. For these transactions only, gains and losses are

recognised in reserves rather than the Statement of Comprehensive Net Expenditure.

5


1.5 Charitable Funds

1.6 Pooled Budgets

1.7

1.7.1

1.7.2 Key Sources of Estimation Uncertainty

From 2013-14, the divergence from the Government Financial Reporting Manual that NHS Charitable Funds are

not consolidated with bodies’ own returns is removed. Under the provisions of IAS 27: Consolidated & Separate

Financial Statements, those Charitable Funds that fall under common control with NHS bodies are consolidated

within the entities’ accounts.

Where the clinical commissioning group has entered into a pooled budget arrangement under Section 75 of the

National Health Service Act 2006 the clinical commissioning group accounts for its share of the assets, liabilities,

income and expenditure arising from the activities of the pooled budget, identified in accordance with the pooled

budget agreement.

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

recognises:

• The assets the clinical commissioning group controls;

• The liabilities the clinical commissioning group incurs;

• The expenses the clinical commissioning group incurs; and

• The clinical commissioning group's share of the income from the pooled budget activities.

If the clinical commissioning group is involved in a “jointly controlled assets” arrangement, in addition to the

above, the clinical commissioning group recognises:

• The clinical commissioning group’s share of the jointly controlled assets (classified according

to the nature of the assets);

• The clinical commissioning group’s share of any liabilities incurred jointly; and,

• The clinical commissioning group’s share of the expenses jointly incurred.

Critical Accounting Judgements & Key Sources of Estimation Uncertainty

In the application of the clinical commissioning group’s accounting policies, management is required to make

judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily

apparent from other sources. The estimates and associated assumptions are based on historical experience and

other factors that are considered to be relevant. Actual results may differ from those estimates and the estimates

and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the

period in which the estimate is revised if the revision affects only that period or in the period of the revision and

future periods if the revision affects both current and future periods.

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 clinical commissioning group’s accounting policies that have the most

significant effect on the amounts recognised in the financial statements:

• None

The following are the key estimations that management has made in the process of applying the clinical

commissioning group's accounting policies that have the most significant effect on the amounts recognised in the

financial statements:

• the assumptions applied in the estimation of activity not yet invoiced, including partially completed

treatment spells as at the Statement of Financial Position date. The full value of partially completed

spells included in the financial statements for the clinical commissioning group as at the Statement of

Financial Position date is £2,055,574. This value is determined through assessment of the

estimations made by service providers of the expected liability payable by the clinical commissioning

group as at the Statement of Financial Position date.

• the assumptions applied in the estimation of prescribing liabilities not yet billed as at the Statement of

Financial Position date. Nationally derived phasing profiles from the NHS Business Services Authority

provided for forecasting the likely prescribing outturn has been utilised in deriving the estimated liability

of costs not yet billed for the clinical commissioning group. This was estimated at £8,095,582 as at the

Statement of Financial Position date.

6


1.8 Revenue

1.9 Employee Benefits

1.9.1 Short-term Employee Benefits

1.9.2 Retirement Benefit Costs

1.10 Other Expenses

1.11 Property, Plant & Equipment

1.11.1 Recognition

Property, plant and equipment is capitalised if:

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

deferred.

Salaries, wages and employment-related payments are recognised in the period in which the service is received

from employees, including bonuses earned but not yet taken.

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.

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 clinical

commissioning group of participating in the scheme is taken as equal to the contributions payable to the scheme

for the accounting period.

For early retirements other than those due to ill health the additional pension liabilities are not funded by the

scheme. The full amount of the liability for the additional costs is charged to expenditure at the time the clinical

commissioning group commits itself to the retirement, regardless of the method of payment.

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.

Expenses and liabilities in respect of grants are recognised when the clinical commissioning group has a present

legal or constructive obligation, which occurs when all of the conditions attached to the payment have been met.

• 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 clinical commissioning group;• 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 a 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.

7


1.11.2 Valuation

1.11.3 Subsequent Expenditure

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 clinical commissioning group’s services or for administrative purposes are stated

in the Statement of Financial Position at their re-valued amounts, being the fair value at the date of revaluation

less any impairment.

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; and,

• Specialised buildings – depreciated replacement cost.

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.

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 re-valued and depreciation

commences when they are brought into use.

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 are taken to expenditure. Gains and losses recognised in the

revaluation reserve are reported as other comprehensive income in the Statement of Comprehensive Net

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.

8


1.12 Intangible Assets

1.12.1 Recognition

1.12.2 Measurement

1.13 Depreciation, Amortisation & Impairments

Intangible assets are non-monetary assets without physical substance, which are capable of sale separately from

the rest of the clinical commissioning group’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 clinical commissioning group;• Where the cost of the asset can be measured reliably; and,

• Where the cost is at least £5,000.

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 but is recognised as an

operating expense in the period in which it is incurred. Internally-generated 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; and,

• The ability to measure reliably the expenditure attributable to the intangible asset during its

development.

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 historic cost to reflect the

opposing effects of increases in development costs and technological advances.

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 clinical commissioning group expects to obtain economic

benefits or service potential from the asset. This is specific to the clinical commissioning group 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 clinical commissioning group 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 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

are taken 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.

9


1.14 Donated Assets

1.15 Government Grants

1.16 Non-current Assets Held For Sale

1.17 Leases

1.17.1 The Clinical Commissioning Group as Lessee

Donated non-current assets are capitalised at their fair value on receipt, with a matching credit to Income. They

are valued, depreciated and impaired as described above for purchased assets. Gains and losses on

revaluations, impairments and sales are as described above for purchased assets. Deferred income is

recognised only where conditions attached to the donation preclude immediate recognition of the gain.

The value of assets received by means of a government grant are credited directly to income. Deferred income

is recognised only where conditions attached to the grant preclude immediate recognition of the gain.

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 the general reserve.

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.

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.

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 clinical commissioning group's surplus/deficit.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease

incentives are recognised initially as a liability and subsequently as a reduction of rentals on a straight-line basis

over the lease term.

Contingent rentals are recognised as an expense in the period in which they are incurred.

Where a lease is for land and buildings, the land and building components are separated and individually

assessed as to whether they are operating or finance leases.

10


1.17.2 The Clinical Commissioning Group as Lessor

1.18 Private Finance Initiative Transactions

1.18.1 Services Received

1.18.2 PFI Asset

1.18.3 PFI Liability

1.18.4 Lifecycle Replacement

Amounts due from lessees under finance leases are recorded as receivables at the amount of the clinical

commissioning group’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 clinical commissioning group’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.

HM Treasury has determined that government bodies shall account for infrastructure Private Finance Initiative

(PFI) schemes 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 clinical commissioning group 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:

• Payment for the fair value of services received;

• Payment for the PFI asset, including finance costs; and,

• Payment for the replacement of components of the asset during the contract ‘lifecycle

replacement’.

The fair value of services received in the year is recorded under the relevant expenditure headings within

‘operating expenses’.

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 IAS17. Subsequently, the assets are

measured at fair value, which is kept up to date in accordance with the clinical commissioning group’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.

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.

Components of the asset replaced by the operator during the contract (‘lifecycle replacement’) are capitalised

where they meet the clinical commissioning group’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.

11


1.18.5

1.18.6

1.19 Inventories

1.20 Cash & Cash Equivalents

1.21 Provisions

The element of the annual unitary payment allocated to lifecycle replacement is pre-determined 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 Clinical Commissioning Group 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 clinical commissioning group’s Statement of Financial Position.

Other Assets Contributed by the Clinical Commissioning group to the Operator

Assets contributed (e.g. cash payments, surplus property) by the clinical commissioning group 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 clinical commissioning group, the prepayment is treated as an initial payment towards the finance

lease liability and is set against the carrying value of the liability.

Inventories are valued at the lower of cost and net realisable value using the first-in first-out cost formula. This is

considered to be a reasonable approximation to fair value due to the high turnover of stocks.

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 three months or less from the date of acquisition

and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable

on demand and that form an integral part of the clinical commissioning group’s cash management.

Provisions are recognised when the clinical commissioning group has a present legal or constructive obligation

as a result of a past event, it is probable that the clinical commissioning group will be required to settle the

obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a

provision is the best estimate of the expenditure required to settle the obligation at the end of the reporting

period, taking into account the risks and uncertainties. Where a provision is measured using the cash flows

estimated to settle the obligation, its carrying amount is the present value of those cash flows using HM

Treasury’s discount rate as follows:

• Timing of cash flows (0 to 5 years inclusive): Minus 1.90%

• Timing of cash flows (6 to 10 years inclusive): Minus 0.65%

• Timing of cash flows (over 10 years): Plus 2.20%

• All employee early departures: 1.80%

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.

12


1.22 Clinical Negligence Costs

1.23 Non-clinical Risk Pooling

1.24 Carbon Reduction Commitment Scheme

1.25 Contingencies

1.26 Financial Assets

A restructuring provision is recognised when the clinical commissioning group 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 on-going activities of the

entity.

The NHS Litigation Authority operates a risk pooling scheme under which the clinical commissioning group pays

an annual contribution to the NHS Litigation Authority which in return settles all clinical negligence claims. The

contribution is charged to expenditure. Although the NHS Litigation Authority is administratively responsible for

all clinical negligence cases the legal liability remains with the clinical commissioning group.

The clinical commissioning group participates in the Property Expenses Scheme and the Liabilities to Third

Parties Scheme. Both are risk pooling schemes under which the clinical commissioning group pays an annual

contribution to the NHS Litigation Authority and, in return, receives assistance with the costs of claims arising.

The annual membership contributions, and any excesses payable in respect of particular claims are charged to

operating expenses as and when they become due.

Carbon Reduction Commitment and similar 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 clinical commissioning group makes emissions, a provision is

recognised with an offsetting transfer from deferred income. The provision is settled on surrender of the

allowances. The asset, provision and deferred income amounts are valued at fair value at the end of the

reporting period.

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 clinical commissioning group, or a present obligation that is not recognised because it is not probable that a

payment will be required to settle the obligation or the amount of the obligation cannot be measured sufficiently

reliably. A contingent liability is disclosed unless the possibility of a payment is remote.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed by the

occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the CCG. 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.

Financial assets are recognised when the clinical commissioning group becomes party to the financial instrument

contract or, in the case of trade receivables, when the goods or services have been delivered. Financial assets

are derecognised when the contractual rights have expired or the asset has been transferred.

Financial assets are classified into the following categories:

• Financial assets at fair value through profit and loss;

• Held to maturity investments;

• Available for sale financial assets; and,

• Loans and receivables.

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

initial recognition.

13


1.26.1 Financial Assets at Fair Value Through Profit and Loss

1.26.2 Held to Maturity Assets

1.26.3 Available For Sale Financial Assets

1.26.4 Loans & Receivables

1.27 Financial Liabilities

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 calculating the

clinical commissioning group’s surplus or deficit for the year. The net gain or loss incorporates any interest

earned on the financial asset.

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 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 surplus/deficit on de-recognition.

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

using discounted cash flow analysis.

The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected

life of the financial asset, to the initial fair value of the financial asset.

At the end of the reporting period, the clinical commissioning group assesses whether any financial assets, other

than those held at ‘fair value through profit and loss’ are impaired. Financial assets are impaired and impairment

losses recognised if there is objective evidence of impairment as a result of one or more events which occurred

after the initial recognition of the asset and which has an impact on the estimated future cash flows of the asset.

For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference

between the asset’s carrying amount and the present value of the revised future cash flows discounted at the

asset’s original effective interest rate. The loss is recognised in expenditure and the carrying amount of the asset

is reduced through a provision for impairment of receivables.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related

objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss

is reversed through expenditure to the extent that the carrying amount of the receivable at the date of the

impairment is reversed does not exceed what the amortised cost would have been had the impairment not been

recognised.

Financial liabilities are recognised on the statement of financial position when the clinical commissioning group

becomes party to the contractual provisions of the financial instrument or, in the case of trade payables, when the

goods or services have been received. Financial liabilities are de-recognised when the liability has been

discharged, that is, the liability has been paid or has expired.

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

recognised at fair value.

14


1.27.1 Financial Guarantee Contract Liabilities

1.27.2

1.27.3 Other Financial Liabilities

1.28 Value Added Tax

1.29 Foreign Currencies

1.30 Third Party Assets

1.31 Losses & Special Payments

1.32 Subsidiaries

Financial guarantee contract liabilities are subsequently measured at the higher of:

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

• The amount of the obligation under the contract, as determined in accordance with IAS 37:

Provisions, Contingent Liabilities and Contingent Assets.

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 clinical

commissioning group’s surplus/deficit. The net gain or loss incorporates any interest payable on the financial

liability.

After initial recognition, all other financial liabilities are measured at amortised cost using the effective interest

method, except for loans from Department of Health, which are carried at historic cost. The effective interest rate

is the rate that exactly discounts estimated future cash payments through the life of the asset, to the net carrying

amount of the financial liability. Interest is recognised using the effective interest method.

Most of the activities of the clinical commissioning group are outside the scope of VAT and, in general, output tax

does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant

expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or

input VAT is recoverable, the amounts are stated net of VAT.

The clinical commissioning group’s functional currency and presentational currency is sterling. Transactions

denominated in a foreign currency are translated into sterling at the exchange rate ruling on the dates of the

transactions. At the end of the reporting period, monetary items denominated in foreign currencies are

retranslated at the spot exchange rate on 31 March. Resulting exchange gains and losses for either of these are

recognised in the clinical commissioning group’s surplus/deficit in the period in which they arise.

Assets belonging to third parties (such as money held on behalf of patients) are not recognised in the financial

statements since the clinical commissioning group has no beneficial interest in them.

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 that individual cases are handled.

Losses and special payments are charged to the relevant functional headings in expenditure on an accruals

basis, including losses which would have been made good through insurance cover had the clinical

commissioning group not been bearing its own risks (with insurance premiums then being included as normal

revenue expenditure).

Material entities over which the clinical commissioning group has the power to exercise control so as to obtain

economic or other benefits are classified as subsidiaries and are consolidated. Their income and expenses;

gains and losses; assets, liabilities and reserves; and cash flows are consolidated in full into the appropriate

financial statement lines. Appropriate adjustments are made on consolidation where the subsidiary’s accounting

policies are not aligned with the clinical commissioning group or where the subsidiary’s accounting date is not co-

terminus.

Subsidiaries that are classified as ‘held for sale’ are measured at the lower of their carrying amount or ‘fair value

less costs to sell’.

15


1.33 Associates

1.34 Joint Ventures

1.35 Joint Operations

1.36 Research & Development

1.37 Legacy Balances

1.38 Accounting Standards That Have Been Issued But Have Not Yet Been Adopted

Material entities over which the clinical commissioning group has the power to exercise significant influence so

as to obtain economic or other benefits are classified as associates and are recognised in the clinical

commissioning group’s accounts using the equity method. The investment is recognised initially at cost and is

adjusted subsequently to reflect the clinical commissioning group’s share of the entity’s profit/loss and other

gains/losses. It is also reduced when any distribution is received by the clinical commissioning group from the

entity.

Joint ventures that are classified as ‘held for sale’ are measured at the lower of their carrying amount or ‘fair

value less costs to sell’.

Material entities over which the clinical commissioning group has joint control with one or more other parties so

as to obtain economic or other benefits are classified as joint ventures. Joint ventures are accounted for using

the equity method.

Joint ventures that are classified as ‘held for sale’ are measured at the lower of their carrying amount or ‘fair

value less costs to sell’.

Joint operations are activities undertaken by the clinical commissioning group in conjunction with one or more

other parties but which are not performed through a separate entity. The clinical commissioning group records its

share of the income and expenditure; gains and losses; assets and liabilities; and cash flows.

Research and development expenditure is charged 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 re-valued on the basis of current cost. The amortisation is calculated on the same basis as

depreciation.

The Government Financial Reporting Manual does not require the following Standards and Interpretations to be

applied in 2013-14, all of which are subject to consultation:

• IAS 27: Separate Financial Statements

• IAS 28: Investments in Associates & Joint Ventures

The accounting arrangements for balances transferred from predecessor PCTs ("legacy" balances) are

determined by the Accounts Direction issued by NHS England on 12 February 2014. The Accounts Directions

state that the only legacy balances to be accounted for by the CCG are in respect of property, plant and

equipment (and related liabilities) and inventories. All other legacy balances in respect of assets or liabilities

arising from transactions or delivery of care prior to 31 March 2013 are accounted for by NHS England. The

CCG's arrangements in respect of settling NHS Continuing Healthcare claims are disclosed in note 13 to these

financial statements.

The application of the Standards as revised would not have a material impact on the accounts for

2013-14, were they applied in that year.

• IAS 32: Financial Instruments – Presentation (amendment)

• IFRS 9: Financial Instruments

• IFRS 10: Consolidated Financial Statements

• IFRS 11: Joint Arrangements

• IFRS 12: Disclosure of Interests in Other Entities

• IFRS 13: Fair Value Measurement

16


2. Other Operating Revenue2013-14 2013-14 2013-14

Total Admin Programme

£000 £000 £000

Non-patient care services to other bodies 586 0 586

Other revenue 848 21 827

Total other operating revenue 1,434 21 1,413

Admin revenue is revenue received that is not directly attributable to the provision of healthcare or healthcare services.

3. Revenue2013-14 2013-14 2013-14


£000 £000 £000

From rendering of services 1,073 21 1,052

From sale of goods 361 0 361

Total 1,434 21 1,413

Revenue in this note does not include cash received from NHS England, which is drawn down directly into the bank account of

the clinical commissioning group and credited to the General Fund.

17


4. Employee benefits and staff numbers

4.1 Employee benefits 2013-14 Total Admin Programme

Total Permanent

Employees

Other Total Permanent

Employees

Other Total Permanent

Employees

Other

£000 £000 £000 £000 £000 £000 £000 £000 £000

Employee Benefits

Salaries and wages 2,540 2,468 72 2,270 2,198 72 270 270 0

Social security costs 247 247 0 220 220 0 27 27 0

Employer Contributions to NHS Pension scheme 299 299 0 261 261 0 38 38 0

Total employee benefits expenditure 3,086 3,014 72 2,751 2,679 72 335 335 0

No amounts were recovered in respect of employee benefits and no employee benefits were capitalised during the year.

4.2 Average number of people employed

Total

Permanently

employed Other

Number Number Number

Total 59 58 1

None of the above people were engaged on capital projects.

4.3 Staff sickness absence and ill health retirements2013-14

Number

Total Days Lost 183

Total Staff Years 59

Average working days lost 3

No staff retired early on ill health grounds during the financial year.

4.4 Exit packages agreed in the financial year

No exit packages have been agreed in the financial year.

2013-14

18


4.5 Pension costs

Past and present employees are covered by the provisions of the NHS Pension Scheme. Details of the benefits

payable under these provisions can be found on the NHS Pensions website at www.nhsbsa.nhs.uk/Pensions.

The Scheme is an unfunded, defined benefit scheme that covers NHS employers, GP practices and other bodies,

allowed under the direction of the Secretary of State, in England and Wales. The Scheme is not designed to be run

in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities.

Therefore, the Scheme is accounted for as if it were a defined contribution scheme: the cost to the clinical

commissioning group of participating in the Scheme is taken as equal to the contributions payable to the Scheme

for the accounting period.

The Scheme is subject to a full actuarial valuation every four years (until 2004, every five years) and an accounting

valuation every year. An outline of these follows:

4.5.1 Full actuarial (funding) 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 £3.3 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 scheme’s liabilities.

The last published actuarial valuation undertaken for the NHS Pension Scheme was completed for the year ending

31 March 2004. Consequently, a formal actuarial valuation would have been due for the year ending 31 March

2008. However, formal actuarial valuations for unfunded public service schemes were suspended by HM Treasury

on value for money grounds while consideration is given to recent changes to public service pensions, and while

future scheme terms are developed as part of the reforms to public service pension provision due in 2015.

4.5.2 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.

19


4.5 Pension costs (continued)

4.5.3 Scheme Provisions

• Members can purchase additional service in the scheme and contribute to money purchase AVC’s run by the Scheme’s

approved providers or by other Free Standing Additional Voluntary Contributions (FSAVC) providers.

The NHS Pension Scheme provides 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 HM Revenue & Customs 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 net expenditure at the time

the clinical commissioning group commits itself to the retirement, regardless of the method of payment; and

20


5. Operating expenses

2013-14 2013-14 2013-14


£000 £000 £000

Gross employee benefits

Employee benefits excluding governing body members 2,494 2,159 335

Executive governing body members 592 592 0

Total gross employee benefits 3,086 2,751 335

Other costs

Services from other CCGs and NHS England 757 742 15

Services from foundation trusts 307,328 0 307,328

Services from other NHS trusts 466 0 466

Purchase of healthcare from non-NHS bodies 46,856 0 46,856

Chair and lay membership body and governing body members 104 104 0

Supplies and services – clinical 32 0 32

Supplies and services – general 934 736 198

Consultancy services 60 60 0

Establishment 491 380 111

Transport 68 22 46

Premises 2,974 691 2,283

Depreciation 77 1 76

Audit fees 119 119 0

Prescribing costs 51,026 0 51,026

GPMS/APMS and PCTMS 988 0 988

Other professional fees excl. audit 332 330 2

Education and training 205 185 20

Total other costs 412,817 3,370 409,447

Total operating expenses 415,903 6,121 409,782

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

The 2013-14 audit fee was £90,000 plus VAT. The 2013-14 fee was subject to an exceptional case increase of 10% for 2013-14

only, to cover expected additional first-year audit costs. The Audit Commission has funded this 10% increase, and the clinical

commissioning group received a rebate in March 2014.

21


6. Better Payment Practice Code

6.1 Measure of compliance

2013-14 2013-14

Number £000

Non-NHS payables

Total non-NHS trade invoices paid in the year 5,524 45,530

Total non-NHS trade invoices paid within target 5,314 43,884 Percentage of non-NHS trade invoices paid within target 96.20% 96.38%

NHS payables

Total NHS trade invoices paid in the year 1,337 307,422

Total NHS trade invoices paid within target 1,294 306,634 Percentage of NHS trade invoices paid within target 96.78% 99.74%

6.2 The Late Payment of Commercial Debts (Interest) Act 1998

The clinical commissioning group had no late payments of commercial debts in 2013/14.

The Better Payment Practice Code requires the clinical commissioning group to aim to pay all valid invoices by

the due date or within 30 days of receipt of a valid invoice, whichever is later.

22


7. Operating Leases

7.1 As lessee

7.1.1 Payments recognised as an Expense

2013-14 2013-14 2013-14

Buildings Other Total

£000 £000 £000

Payments recognised as an expense

Minimum lease payments 2,706 33 2,739 Total 2,706 33 2,739

7.1.2 Future minimum lease payments

2013-14 2013-14 2013-14

Buildings Other Total

£000 £000 £000

Payable:

No later than one year 0 28 28 Between one and five years 0 4 4 Total 0 32 32

The clinical commissioning group has entered into a small number of formal operating lease arrangements, relating to

leased cars, none of which are individually significant. Specific lease terms vary by individual arrangement but are

based upon standard practice for the type of arrangement involved.

The clinical commissioning group also has arrangements in place with NHS Property Services in respect of the

utilisation of various clinical and non-clinical properties. These largely relate to payments made in respect of void

space in clinical properties, as well as for the clinical commissioning group's accommodation costs. Funding in respect

of void spaces was made available from NHS England in the clinical commissioning group's allocation.

Although formal signed leases are not in place for these properties, the transactions involved do convey the right of the

clinical commissioning group to use property assets. The clinical commissioning group has considered the substance

of these arrangements under IFRIC 4 'Determining whether an arrangement contains a lease' and determined that the

arrangements are (or contain) leases.

Accordingly the payments made in 2013/14 are disclosed as minimum lease payments in the buildings category in note

7.1.1 below. In the absence of formal contracts however, it is not possible to confirm minimum lease payments for

future years hence no figures are included in note 7.1.2 below for these arrangements. It is expected that the

payments recognised in 2013/14 would continue to be minimum lease payments in 2014/15.

23


8. Property, plant and equipment

2013-14

Plant &

machinery

Transport

equipment

Total

£000 £000 £000

Cost or valuation at 1 April 2013 0 0 0

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

transition 252 3 255

At 31 March 2014 252 3 255

Depreciation 1 April 2013 0 0 0

Adjusted depreciation 1 April 2013 0 0 0

Charged during the year 76 1 77

At 31 March 2014 76 1 77

Net Book Value at 31 March 2014 176 2 178

Purchased 176 2 178

Total at 31 March 2014 176 2 178

Asset financing:

Owned 176 2 178

Total at 31 March 2014 176 2 178

8.1 Economic lives

Plant & machinery 1 3

Transport equipment 1 2

Minimum

Life (years)

Maximum

Life (Years)

24


9. Trade and other receivables Current Non-current

31 March 2014 31 March 2014

£000 £000

NHS receivables: revenue 155 0

NHS prepayments and accrued income 1,085 0

Non-NHS receivables: revenue 480 0

VAT 15 0

Operating lease receivables 10 0

Other receivables 2 0

Total 1,747 0

Total current and non current 1,747

9.1 Receivables past their due date but not impaired 31 March 2014

£000

By up to three months 146

By three to six months 239

Total 385

The clinical commissioning group did not hold any collateral against receivables outstanding at 31 March 2014.

10. Cash and cash equivalents

31 March 2014

£000

Balance at 1 April 2013 0

Net change in year 50

Balance at 31 March 2014 50

Made up of:

Cash with the Government Banking Service 50

Cash and cash equivalents as in statement of financial position 50

Balance at 31 March 2014 50

The great majority of trade is with NHS England. As NHS England is funded by Government to provide funding to clinical

commissioning groups to commission services, no credit scoring of them is considered necessary.

The clinical commissioning group held £nil cash and cash equivalents at 31 March 2014 on behalf of patients.

25


Current Non-current

31 March 2014 31 March 2014

£000 £000

NHS payables: revenue 4,812 0

NHS accruals and deferred income 2,056 0

Non-NHS payables: revenue 1,151 0

Non-NHS accruals and deferred income 13,305 0

Social security costs 38 0

Tax 46 0

Other payables 478 0

Total 21,886 0

Total payables (current and non-current) 21,886

12. Borrowings

13. Provisions

14. Contingencies

At 31 March 2014, the clinical commissioning group had no liabilities due in future years under

arrangements to buy out the liability for early retirement over 5 years.

Other payables include £38k in respect of outstanding pension contributions at 31 March

2014.

11. Trade and other payables

The clinical commissioning group had no contingencies as at 31 March 2014.

The clinical commissioning group had no provisions as at 31 March 2014. Under the Accounts Direction issued

by NHS England on 12 February 2014, NHS England is responsible for accounting for liabilities relating to NHS

Continuing Healthcare claims relating to periods of care before establishment of the clinical commissioning

group. However, the legal liability remains with the CCG. The total value of legacy NHS Continuing Healthcare

provisions accounted for by NHS England on behalf of this CCG at 31 March 2014 is £7,203k.

The clinical commissioning group had no borrowings as at 31 March 2014.

26


15. Financial instruments

15.1 Financial risk management

15.1.1 Currency risk

15.1.2 Interest rate risk

15.1.3 Credit risk

15.1.3 Liquidity risk

The clinical commissioning group is required to operate within revenue and capital resource limits agreed with NHS England,

which are financed from resources voted annually by Parliament. The clinical commissioning group draws down cash to

cover expenditure, from NHS England, as the need arises. The clinical commissioning group is not, therefore, exposed to

significant liquidity risks.

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.

Because the clinical commissioning group is financed through parliamentary funding, it is not exposed to the degree of

financial risk faced by business entities. Also, financial instruments play a much more limited role in creating or changing risk

than would be typical of listed companies, to which the financial reporting standards mainly apply. The clinical

commissioning group has limited powers to borrow or invest surplus funds and financial assets and liabilities are generated

by day-to-day operational activities rather than being held to change the risks facing the clinical commissioning group in

undertaking its activities.

Treasury management operations are carried out by the finance department, within parameters defined formally within the

clinical commissioning group’s standing financial instructions and policies agreed by the Governing Body. Treasury activity is

subject to review by the clinical commissioning group’s internal auditors.

The clinical commissioning group is principally a domestic organisation with the great majority of transactions, assets and

liabilities being in the UK and sterling based. The clinical commissioning group has no overseas operations. The clinical

commissioning group therefore has low exposure to currency rate fluctuations.

The clinical commissioning group borrows from government for capital expenditure, subject to affordability as confirmed by

NHS England. The borrowings are for 1 to 25 years, in line with the life of the associated assets, and interest is charged at

the National Loans Fund rate, fixed for the life of the loan. The clinical commissioning group therefore has low exposure to

interest rate fluctuations.

Because the majority of the clinical commissioning group’s revenue comes parliamentary funding, the clinical commissioning

group has low exposure to credit risk. The maximum exposures as at the end of the financial year are in receivables from

customers, as disclosed in the trade and other receivables note.

27


15. Financial instruments (continued)

15.2 Financial assets

Loans and

Receivables

Total

31 March 2014 31 March 2014

£000 £000

Receivables:

· NHS 155 155

· Non-NHS 480 480

Cash at bank and in hand 50 50

Other financial assets 2 2

Total at 31 March 2014 687 687

15.3 Financial liabilities

Other Total

31 March 2014 31 March 2014

£000 £000

Payables:

· NHS 6,868 6,868

· Non-NHS 14,455 14,455

Total at 31 March 2014 21,323 21,323

28


16. Operating segments

The clinical commissioning group has considered the definition of an operating segment contained within

IFRS 8 in determining its operating segments, in particular considering the internal reporting to the clinical

commissioning group's Governing Body, considered to be the 'chief operating decision maker' of the clinical

commissioning group, which was used for the purpose of resource allocation and assessment of

performance.

All activity performed by the clinical commissioning group relates to its role as a commissioner of healthcare

for its relevant population. As a result, the clinical commissioning group considers that it has only one

operating segment, being the commissioning of healthcare services.

An analysis of both the income and expenditure and net assets relating to the segment can be found in the

statement of comprehensive net expenditure and statement of financial position respectively.

29


17. Pooled budgets

2013-14

£000

Income 0

Expenditure (3,932)

18. Intra-government and other balancesCurrent

Receivables

Non-current

Receivables

Current

Payables

Non-current

Payables31 March 2014 31 March 2014 31 March 2014 31 March 2014

£000 £000 £000 £000

Balances with:

· Other Central Government bodies 15 0 192 0

· Local Authorities 477 0 1,638 0

Balances with NHS bodies:

· NHS bodies outside the Departmental Group 155 0 128 0

· NHS Trusts and Foundation Trusts 1,084 0 6,740 0

Total of balances with NHS bodies: 1,239 0 6,868 0

· Public corporations and trading funds 0 0 0 0

· Bodies external to Government 16 0 13,188 0

Total balances at 31 March 2014 1,747 0 21,886 0

The clinical commissioning group has entered into a pooled budget with Sunderland City Council. The pool is hosted by Sunderland

City Council.

The clinical commissioning group’s shares of the income and expenditure handled by the pooled budget in the financial year were:

Under the arrangement funds are pooled under Section 75 of the NHS Act 2006 for the Community Equipment services, Learning

Disability services, Intermediate Care services and a Mental Capacity Act safeguarding practitioner.

30


19. Related party transactions

Name Title Declaration Related Party

Payments

to Related

Party

Receipts

from

Related

Party

Amounts

owed to

Related

Party

Amounts

due from

Related

Party

£000 £000 £000 £000

Dr Ian Pattison Clinical ChairPartner, Dr Pattison & Partner, Southlands Medical Group (and

partner to Dr K Benton, GP at Southlands Medical Practice)Southlands Medical Group 25 0 0 0

Dr Geoff Stephenson Medical DirectorManaging Partner, Dr Stephenson & Partners, Victoria Road Health

CentreDr Stephenson & Partners 74 0 1 0

Ann Fox Director Of Nursing, Quality And SafetyDirector of Nursing, Quality & Safety, South Tyneside Clinical

Commissioning Group

South Tyneside Clinical

Commissioning Group0 46 66 1

Dr Iain Gilmour Executive GP & Clinical Vice Chair Partner, Deerness Park Medical Group Deerness Park Medical Group 114 0 8 0

Dr Iain Gilmour Executive GP & Clinical Vice ChairMarried to S Gilmour, practice manager at The Wearside Practice,

managed by South Tyneside NHS Foundation Trust

South Tyneside NHS Foundation

Trust30,821 0 300 0

Dr Gerry McBrideExecutive GP & Governance / Public

Patient Involvement (PPI) LeadPartner, Ford & Partners, St Bede's Medical Practice

Ford & Partners, St Bede's Medical

Practice40 0 0 0

Dr Gerry McBrideExecutive GP & Governance / Public

Patient Involvement (PPI) Lead

Married to Specialist Midwife at The Newcastle upon Tyne Hospitals

NHS Foundation Trust

The Newcastle upon Tyne Hospitals

NHS Foundation Trust8,870 0 115 0

Dr Henry ChoiExecutive GP & Clinical Effectiveness

LeadPartner, Dr Cloak & Partners, Southwick Health Centre Southwick Health Centre 82 0 0 0

Dr Jackie Gillespie Executive GP & Prescribing Lead Partner, Millfield Medical Centre Millfield Medical Centre 109 8 0 0

Dr Jackie Gillespie Executive GP & Prescribing LeadMarried to Dr P Peverley, GP Partner at the Old Forge Surgery,

SunderlandOld Forge Surgery, Sunderland 46 0 0 0

Dr Valerie Taylor Executive GPPart-time Clinician, Rheumatology, City Hospitals Sunderland NHS

Foundation Trust

City Hospitals Sunderland NHS

Foundation Trust179,141 0 2,737 1,082

Dr Valerie Taylor Executive GP Salaried GP, Kepier Medical Practice Kepier Medical Practice 56 0 0 0

Gloria Middleton Practice Manager Representative Partner, Westbourne Medical Group Westbourne Medical Group 34 0 0 0

Prof. Mike Bramble Secondary Care Clinician Part Time Medical Consultant, South Tees NHS Foundation Trust South Tees NHS Foundation Trust 76 0 302 0

Scott Watson Head Of Contracting, Performance and

Business IntelligenceSon of Councillor Paul Watson, Sunderland City Council Sunderland City Council 19,112 800 1,506 477

David Chandler Head Of FinanceMarried to Jane Fay, head of costing, income & contracts, South

Tyneside NHS Foundation Trust

South Tyneside NHS Foundation

Trust30,821 0 300 0

During the year the clinical commissioning group has undertaken transactions with the following clinical commissioning group Governing Body members or members of the key management staff, or parties

related to any of them:

31


19. Related party transactions (continued)

Payments to

Related Party

Receipts from

Related Party

Amounts

owed to

Related Party

Amounts due

from Related

Party

£000 £000 £000 £000

114 0 8 0

38 0 0 0

25 0 0 0

103 1 0 0

52 0 0 0

29 0 0 0

59 0 0 0

32 0 0 2

50 0 0 0

74 0 1 0

22 0 0 0

26 0 0 0

42 0 0 0

10 2 0 0

51 0 0 0

40 0 0 0

109 0 0 0

29 0 0 0

82 8 0 0

46 0 0 0

56 1 0 0

22 0 0 0

45 0 0 0

44 0 0 0

101 0 0 0

15 0 0 0

37 0 0 0

51 0 0 0

9 0 0 0

34 0 0 0

35 0 0 0

25 0 0 0

22 0 0 0

25 0 0 0

10 0 0 0

13 0 0 0

1 0 0 0

16 0 0 0

38 0 0 0

8 0 0 0

22 0 0 0

23 0 0 0

16 0 0 0

32 0 0 0

41 0 0 0

22 0 1 0

10 0 0 0

8 0 0 0

16 0 0 0

16 0 0 0

12 0 0 0

13 0 0 0

739 0 0 0

1 0 0 0

Payments to

Related Party

Receipts from

Related Party

Amounts

owed to

Related Party

Amounts due

from Related

Party

£000 £000 £000 £000

179,141 0 2,737 1,082

51,726 0 149 0

30,821 0 300 0

14,602 0 1,148 0

11,767 0 580 0

Payments to

Related Party

Receipts from

Related Party

Amounts

owed to

Related Party

Amounts due

from Related

Party

£000 £000 £000 £000

19,112 800 1,506 477

North East Ambulance Services NHS Foundation Trust

Department of Health Entity


Related Party

Deerness Park Medical Group

Drs Bhate & El-Shakankery (Riverview Health Centre)

Dr Vakharia & Hegde

Dr Dixit's Practice

New City Medical Group

Roker Family Practice

The clinical commissioning group is a membership organisation. The GP Practices of Sunderland are all members of the clinical commissioning group. The

table below lists the related party transactions with the Member Practices of Sunderland.

Department of Health Entity

Dr H Pepper & Partners

Dr Brigham & Partners

Dr Shetty & Partners

Dr Lefley & Associates

Dr Reddy & Partners

Dr Lilley & Partners

Dr Stephenson & Partners

Dr Joshi (Village Surgery)

Dr Rutherford & Partners (Fulwell Medical Group)

Dr R N Ford (St. Bede's Medical Practice)

Dr Wright & Partners (Millfield Medical Group)

Ashburn Medical Centre

Dr Cloak & Partners

Dr Spagnoli & Partners (Old Forge Surgery)

Dr Mishreki & Partners (Kepier Medical Practice)

Dr Mazarelo & Partners (Concord Medical Practice)

Houghton Medical Group

Broadway Medical Practice

Encompass Health Care

Victoria Medical Practice (Dr Ray)

Springwell Medical Group (Dr Sharma & Partners )

Grangewood Surgery (Dr Wallace & Partners)

Springwell House (Dr Singh Sunderland)

Westbourne Medical Group

Hytlon Medical Group (Dr Ela & Al Khalidi)

Colliery Medical Group (Dr K Stephenson)

Park Lane Practice (Drs Mackrell & Joseph)


Castletown Medical Group

Barmston Medical Centre

Dr Crummie

Dr Weaver (Happy House Surgery)

Church View Medical Centre

Dr Obonna

Dr Weatherhead & Associates

Conishead Medical Group (Dr Hipwell)

Eden Terrace Surgery

Dr Nathan (Riverview)

South Tyneside NHS Foundation Trust

South Hyton Surgery (Dr Widdrington & Partner)

Rickleton Medical Centre (Dr Aiyegbayo)

Harraton Surgery

Wearside Practice (Dr Johannes Dalhuijsen)

Dr Thomas (Victoria Road Health Centre)

Pennywell Medical Centre

Gateshead Health NHS Foundation Trust

All of these transactions were undertaken under standard terms and conditions in the normal course of business.

The Department of Health is regarded as a related party. During the year the clinical commissioning group has had a significant number of material

transactions with entities for which the Department is regarded as the parent Department. For example:

In addition, the clinical commissioning group has had a number of material transactions with other government departments and other central and local

government bodies. Most of these transactions have been with Sunderland City Council as outlined below.

Chester Surgery (Dr El Safy)

Dr Bhatt & Dr Benn

Encompass GP Practice Two

Maritime Surgery

City Hospitals Sunderland NHS Foundation Trust

Northumberland, Tyne and Wear NHS Foundation Trust

32


20. Events after the end of the reporting period

21. Losses and special payments

The clinical commissioning group had no losses or special payments cases during 2013-14

22. Financial performance targets

Clinical commissioning groups have a number of financial duties under the NHS Act 2006 (as amended).

The clinical commissioning group’s performance against those duties was as follows:

NHS Act

Section Duty Target Performance Duty

£000 £000 Achieved?

223H (1) Expenditure not to exceed income 431,744 414,469 Yes

223I (2) 0 0 Yes

223I (3) 431,744 414,469 Yes

223J (1) 0 0 Yes

223J (2) 424,974 408,369 Yes

223J (3) 6,770 6,100 Yes

Performance against the revenue expenditure duties is further analysed below:

2013-14 2013-14 2013-14Programme

Resource

Administration

Resource Total

£000 £000 £000

Revenue resource 424,974 6,770 431,744

Net operating cost for the financial year 408,369 6,100 414,469

Underspend against revenue resource 16,605 670 17,275

The CCG received no capital resource during the year ended 31 March 2014 and incurred no capital expenditure.

2013-14

There are no post balance sheet events which would have a material effect on the financial statements of the clinical

commissioning group.

Capital resource use on specified matter(s) does not exceed

the amount specified in Directions

Revenue resource use on specified matter(s) does not

exceed the amount specified in Directions

Revenue administration resource use does not exceed the

amount specified in Directions

Capital resource use does not exceed the amount specified

in Directions

Revenue resource use does not exceed the amount

specified in Directions

33

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