WHHT - Annual Report 06/07

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Annual Report 2006-2007: Finance Review of the Year

  Statement of Internal Control
       Scope of responsibility
       The purpose of the system of internal control
       Capacity to handle risk 
       The risk and control framework
       Review of effectiveness
       Significant internal control issues
  Financial Disclosure
  Statement of the Chief Executive's Responsibilities as The Accountable Officer of the Trust
  Statement of Directors' Responsibilities in Respect of the Accounts
  Annual Report 2006/2007: Financial Review
       Introduction
       Turnaround Team
       Better payments practice code
       Pay
       Audit services
  The Trust's Committees
       Audit Committee
       Finance and Performance Committee
       Remuneration Committee
       Assurance Committee
       Investing in Your Health Project Board
  Remuneration Report 2006-2007
       Executive Appointments
       Non-Executive Members' Pensions
       Cash Equivalent Transfer Values
       Real Increase in CETV
       Declaration of Interests
  Letter of Representation
  Auditor's Report

Statement of Internal Control

1. Scope of responsibility

The Board is accountable for internal control. As Accountable Officer, and Chief Executive of this Board, I have responsibility for maintaining a sound system of internal control that supports the achievement of the organisation’s policies, aims and objectives. I also have responsibility for safeguarding the public funds and the organisation’s assets for which I am personally responsible as set out in the Accountable Officer Memorandum.

As Accountable Officer I have put in place arrangements to review the individual objectives of the Executive Directors through both one-to-one sessions and weekly meetings with the Director team. This enables me to review progress with the key strategic plans and to hold Directors to account. These processes also enable the team to develop and strengthen its focus across the organisation which has been a significant contributing factor to the delivery of this 2006/07 control total.

The 2006/07 financial year has been extremely challenging for the Trust. Much has been done which provides a firm foundation from which to build for the future. Whilst most of the actions have been driven internally, a significant degree of external advice, support and encouragement has been provided by the Strategic Health Authority and the West Hertfordshire PCT. The Trust has worked hard at establishing good working arrangements with both the SHA and PCT over the year and I believe we have identified the key areas of common purpose that will enable us to work as a health economy to deliver the improvements in service that are required locally. 

We have made good progress with building relationships with the newly emerging Practice Based Commissioning Groups and will continue the build on these into 2007/08. 

The Trust continues to work with the County Overview and Scrutiny Committee (OSC) and has built upon the previous good relationships during 2006/07. The Trust attends the OSC meetings on a regular basis as well as participating in the health topic group.

I continue to be directly involved with the work of the Health Campus in Watford. This significant development involves partner organisations from a wide spectrum of interests including Watford Borough Council, Watford Football Club and the East of England Development Agency. All partner agencies are committed to achieving a successful development which will significantly improve the local environment and provide new hospital facilities for the whole of west Hertfordshire.

The Trust has many established and effective arrangements for working with the wider stakeholder communities, including patients and carers. We enhanced these during the consultation on Delivering a Health Future by running two successful Citizens Juries. As a consequence of the large numbers of people that contributed to the consultation, we now have a large number of interested local people who we intend to use as part of the development work on establishing the Board of Governors when we make our application for Foundation Trust status. 

2. The purpose of the system of internal control

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process designed to:

The system of internal control has been in place in West Hertfordshire Hospitals NHS Trust for the year ending 31 March 2007 and up to the date of approval of the annual report and accounts.

3. Capacity to handle risk

The Trust considers the management and handling of risk as one of its top priorities. The identification and management of risk is seen within the Trust as every employee’s responsibility. To provide leadership and structure in the management of risk, the Chief Nurse/Director of Patient Services, Quality and Risk has specific responsibility for leading the risk management process. This responsibility is discharged throughout the organisation Finance Review of the Year through the Trust’s Assistant Director of Patient Services, Quality & Risk and Divisional Risk Leads. Divisional Risk Leads act as a resource and focus for the identification and review of risks within the Divisional setting. They also assist the Divisions in the development and implementation of effective ways to manage these risks as detailed in their Divisional Risk Management Strategies.

In addition to this, specific Risk Management guidance on the responsibilities of staff at various levels and, on the systems in place to manage Risk is detailed within the Trust’s Risk Management Strategy and the Incident Reporting Policy. More in-depth Risk Management guidance at Divisional level is detailed within the respective individual Divisional Risk Management Strategies.

All employees are introduced to Risk Management and Health and Safety at induction and this is revisited at mandatory staff updates yearly. The Trust hosts regular study days for Managers on Risk Management and Health and Safety, which addresses their individual responsibilities in detail and on Risk Scoring for Managers so they may effectively manage incident reports.

The Trust has a fully implemented and integrated risk management database and risk register. This can be viewed both within the Divisions and at Executive level. Risks are clearly recorded and identified in a standardised way.

Divisional performance is reviewed regularly across a range of key indicators, including the identification and management of risk. At a strategic level the Board has reviewed the reporting arrangements for strategic risks and the requirement that this process links directly to the Assurance Framework. Strategic risks and the Assurance Framework are now reviewed monthly by the Directors, included in the monthly Performance Report to the Board and discussed by the Board at its monthly meetings in public. 

Within 2006/07 the Board has established a new Assurance Committee that takes the lead for strategic overview and scrutiny of risk management across the organisation. There is representation by the Trust at the Bedfordshire and Hertfordshire Clinical Governance Liaison Group and a Regional Patient Safety Forum to ensure that a strategic approach to risk is aligned across the regional health economy. Minutes from this Group are sent automatically to the Trust’s Assistant Director of Patient Services, Quality & Risk for noting and action. Additionally, the National Patient Safety Agency Regional Manager communicates directly with the Assistant Director of Patient Services, Quality and Risk to also ensure consistency in approach.

As Accountable Officer I seek to learn from good practice via exchange of information with other Chief Executives regarding good practice in their organisations. I also learn from the reading of relevant articles and documentation and advice from managers and staff within the Trust as to what has worked well in handling risk and should be rolled out across the organisation. In addition, the Trust works with the other partners in managing elements of risk. The Trust works with the Strategic Health Authority via various structures. 

Chief Executives across the health economy meet regularly and I have regular meetings with colleagues from the SHA. Chairs across the Health Economy also meet on a regular basis and there are a number of other functional groups, e.g. Directors of Finance, who have a formal programme of meetings across the year.

4. The risk and control framework

The Trust has implemented a process for identifying, evaluating and managing the significant risks faced by the Trust throughout the financial year and up to the approval date of the annual accounts. The process is subject to regular review by the Board directly and via the Assurance and Audit Committees. 

The Trust has reviewed its governance arrangements during the year. It has reduced the number of Trust Board sub committees. These now take on the scrutiny and strategic overview function and report to the Board. A number of Executive Groups have been established focusing on the operational aspects of the Trust’s business and reporting to the Trust Board sub committees. Significantly, as far as the risk and control framework is concerned, the Risk Management Group provides the appropriate focus and control and has had the support of the following Executive Groups:

Through this structure significant risks are identified, evaluated and controlled. There is an emphasis on ensuring that risk identification and management is embedded within the Divisional structures. Through the Divisional risk leads, organisational systems and processes for risk identification, scoring, recording and mitigation are undertaken and overseen by the Assistant Director of Patient Services, Quality and Risk.

The Business Planning process continues to be integral in identifying risks for the Divisions, and in populating the Trust’s Risk Register and Assurance Framework, which has been in place since April 2004. All risks, or changes in risk, are identified and described in the Trust’s Risk Register. They are then evaluated and prioritised so that an action plan can be devised for the most significant ones. The Trust’s Risk Management Team reviews and monitors this process.

Performance reports on the management of risk are provided on a six monthly basis to the Assurance Committee. Building on the improvements made on the incident reporting procedure during 2005/6, the Trust now provides the Risk Management Group with a quarterly analysis of key themes extrapolated from incident reporting data held on its Risk Management Database. Where there are issues of concern arising from this report which cannot be resolved by the Risk
Management Group these are escalated to the Assurance Committee.

This process ensures that the Assurance Committee can advise the Board of significant issues that create a risk to the Trust as well as providing the Board with the necessary assurance
that the risk management systems and processes are being effectively managed. The Trust plans to implement a paperless incident reporting system during 2007/8.

Steps continue to be taken to embed internal control and risk management further into the operations of the Trust and to deal with areas of improvement which come to management’s and the Board’s attention. In particular the following actions have raised the profile of risk management:

The Trust’s strategic objectives have now been aligned with ‘Standards for Better Health’ and consequently all gaps in compliance recorded on the Assurance Framework. Executive and operational responsibility for each of the Standards for Better Health domains has been assigned and monitoring of compliance is ongoing. The Trust has made significant progress in meeting the core standards compared to our 2005/6 Declaration. ‘The Trust declared compliance with 42 standards
out of 44 for it’s 2006/7 declaration. 

The Trust has reached the “Practice Plus” level of the Improving Working Lives standard. External audit recommendations are acted upon and updated to the Audit Committee. The Trust actively involves and seeks the views of our patient’s via the following groups/panels:

Patients’ Panel

The Trust’s Patients’ Panel has been established for four years and plays an active part in the Trust. The Panel is linked into a wide range of committees, meetings and projects within the Trust, including iPEAT inspections and reviewing all patient information and questionnaires to ensure it is ‘user friendly’ before being published. The Patients’ Panel together with the PPI Forum members and patient representatives have been involved in the Investing in Your Health (IiYH) project team in respect of the new Watford Health Campus. By attending the Internal Hospital User Groups (IHUGS) and Health Impact Assessments the Trust has ensured their involvement in the planning of the future hospital. The Panel has also been involved in the Delivering a Healthy Future consultation process. 

The Patient Experience Group

The Patient Experience Group has now merged with the new Patient Involvement and Experience Group and is now chaired by the Chief Nurse/Director of Patient Services, Quality and Risk. Membership includes PALS, Patient & Public Involvement, Patients Affairs, Patient & Public Involvement Forum, Modern Matrons, Spiritual & Pastoral Care Coordinator, Quality & Risk, Infection Control, Facilities and Voluntary Services. There are also forty to fifty patient representatives who link in with the Panel from time to time to carry out various tasks within the Trust. 

Patient & Public Involvement Forums

Patient & Public Involvement Forums were established in December 2003 to monitor and review health services from the patient's perspective, to seek the public's views about health services and to make recommendations to the NHS based on those views. The Healthcare Commission oversees them.

The Acute Trust PPI Forum

The Acute Trust PPI Forum has been active within the Trust since 2003 and has eleven members to date. The Trust continues to support and work closely with the Forum. The Head of Patient Services is the main Trust link, liaising with the PPI Forum Support Officer from the Community Development Agency to meet with the Trust Chair and myself, which allows them all the opportunity of hearing issues of joint interest. A newsletter is in development to keep PPI Forum members and volunteers within the hospital updated. The Forum Chair is formally invited to the Board. The Forum holds regular public meetings across the three hospital sites to which various members of the Trust and the SHA have spoken.

The Forum is currently linked into iPEAT visits, Think Clean Day, the Patient Involvement and Experience Group (PEG) and all public consultations undertaken by the Trust. PPI Forum members, using their statutory rights, also visit the Trust to undertake both announced and unannounced monitoring visits. The Trust is committed to its continued involvement in the Early Adopters Programme as part of the implementation of Local Involvement Networks (LINk).

As an employer with staff entitled to membership of the NHS Pension scheme, control measures are in place to ensure all employer obligations contained within the Scheme regulations are complied with. This includes ensuring that deductions from salary, employer’s contributions and payments in to the Scheme are in accordance with the Scheme rules, and that member Pension Scheme records are accurately updated in accordance with the timescales detailed in the Regulations

5. Review of effectiveness

As Accountable Officer, I have responsibility on behalf of the Trust for reviewing the effectiveness of the system of internal control. My review is informed by the Assurance Framework. The process provides me with evidence that the effectiveness of controls that manage the risks to the organisation achieving its principal objectives have been reviewed. My review is also informed by the recent reviews that have been carried out in the Trust by the Clinical Negligence Scheme for Trusts (CNST), National Health Service Litigation Authority (NHSLA) Risk Management Standards, Patient Environment Action Team (PEAT), Improving Working Lives (IWL) and Health and Safety Executive (HSE). The Head of Internal Audit will provide the Trust with an opinion statement on the overall arrangements on internal control and on the controls reviewed as part of their internal audit work. Executive Directors are providing me with assurance on the development and maintenance of the system of internal control. 

I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Audit Committee and Risk Management Group. A plan to address weaknesses and ensure continuous improvement of the system is in place. 

Below describes the process that has been applied in maintaining and reviewing the effectiveness of the system of internal control, including some comment on the role of:

The Board
The Trust Board has endorsed a mechanism to gain assurances about the effectiveness of the controls in place to manage principal risks. This mechanism ensures that risks are fed up to the Board through the organisational structure in place within the Trust. ‘The Forum Chair is formally invited to the Board. The Board reviews and maps these to its own assurance needs, enabling it to address and put in place any improvements necessary.

The Audit Committee
The Audit Committee has reported directly to the Board providing assurance on the maintenance of the system of internal control. The Committee comprises three Non-Executive Directors with the Director of Finance and other representatives including Internal and External Audit in attendance. I attend meetings on a regular basis. The Audit Committee’s primary role is to independently oversee the governance and assurance process on behalf of the organisation and to report to Trust Board on whether the systems in place for risk management and internal control are robust and effective. The Audit Committee receive regular reports from the Assistant Director of Patient Services, Quality and Risk ensuring that appropriate issues are escalated to the Audit Committee from the Risk Management Group. This Committee ensures that audit plans are drawn up with full consideration of all risks as detailed within the Trust Risk Register.

The Assurance Committee
The Trust Assurance Committee is responsible for scrutinising and seeking assurance that co-ordinated risk management activities across all areas of Trust remain effective. It is responsible for advising the Board on matters affecting the compliance of organisational systems and processes set up to maintain the effectiveness and efficiency of the Trust, ensuring the reliability of internal and external reporting and assisting with compliance with legal obligations and regulations. The
Assurance Committee considers all formal reports to external bodies before they are issued. It also considers the risk register on a regular basis.

The Assurance Committee will consider/prescribe any treatment/action necessary when reviewing principal risks escalated to them and also prioritise and report significant risks accordingly to the Trust Board. The Assurance Committee also reviews and directs the Trust’s strategic approach to managing risk to ensure that it is able to meet its strategic objectives. 

Executive Directors
Executive Directors have overall responsibility for the implementation of the risk management strategy. They are responsible for the overseeing of the processes for identifying and assessing risk, and for advising me as necessary. They ensure that, so far as it is reasonably practical, resources are available in order to manage risk. 

Principal risks that threaten the achievement of the Trust’s strategic objectives are managed proactively and identified from existing risk management arrangements through the Trust Risk Management Group and other appropriate Executive Groups chaired by the Executive Directors. The Trust identifies through these Groups organisational risks. Where it is not possible to respond appropriately to the risks identified Executive Groups will report these exceptions to the Assurance Committee for review and advice.

Internal Audit 
Internal Audit reviews the system of internal control throughout the year and reports accordingly to the Audit Committee.

6. Significant Internal Control Issues

The Trust agreed with the East of England Strategic Health Authority (SHA) a control total Income and Expenditure (I&E) deficit for 2006/07 of £11.5m. Against this, the Trust achieved a deficit of £11.4m. The Trust has agreed with the SHA that it will achieve an I&E surplus of £5m for the 2007/08 financial year. To achieve this the Trust has undertaken the following:

The Trust has not been able to declare compliance in two of the Standards for Better Health – C22a & c and C23. Both these fall within the public health domain. With respect to C22 the Trust has specifically highlighted that arrangements are not formally defined within the organisation. There has not been, until recently, the relevant partnership group in place within the region for the Trust to work with. Consequently joint plans have not been put in place. However, links are being established with key stakeholders and the Trust has established a Partnership Group led by an Executive Director to facilitate improved partnership working in order to ensure compliance of this standard in the future.

With respect to C23, although there has been a lot of work undertaken in the Trust to meet the requirement to put in place disease prevention and health promotion programmes, it is recognized that the Trust needs to undertake a baseline assessment and identify the gaps in order to establish a comprehensive Trust wide public health strategy. Once this has been undertaken the Trust will be compliant. 

Following a Trust Board decision on 16 November 2006 to centralise acute services at Watford General Hospital and planned surgery at St Albans City Hospital, the Trust received a legal challenge against the decisions taken. It was agreed the Trust could implement service changes that could be reversed, pending the outcome of a judicial review (JR). The Trust won the JR and subsequent appeal in the High Court.

All risks are reviewed on a continual basis to ensure that there are no gaps in control and/or assurance. Where these occur they are added to the risk register and there are action plans in place to address them.


David Law
Chief Executive

Financial Disclosure

The Trust failed to break even on its income and expenditure account in 2006/2007, reporting a deficit of £11.4m. This, however, was slightly below the Strategic Health Authorities (SHA) target of £11.5m and compares favourably with the overspend of £26.8m in 2005/2006. 

Actions taken to achieve this much-improved position included:

• Strengthened financial management support, in particular the appointment of two Divisional Finance Director posts to work with the Divisions
• Increased operational support with the appointment of two Divisional Operations Directors
• Turnaround team in post all year with additional Project Managers.
• Fortnightly Project Management Office (PMO) review meetings between the Chief Executive and the teams within the Divisions.
• Delivery of £10m in recurring savings.

For 2007/2008 the Trust has agreed a target of £5m surplus. This will be achieved through:

• Continuation of the PMO review process
• Dedicated savings work streams
• Continuation of the controls on pay and non-pay spend
• Establishment of a Business Support Unit to manage the Clinical Service Level Agreements and achievement of access targets
• Accelerating the restructuring of the Trust’s services and the best use of current site and facilities.

The strategic risks are reviewed on a continual basis to ensure that potential gaps in control and / or assurance are managed effectively with action plans to address them.


Date: 20 June 2007
David Law
Chief Executive

Statement of The Chief Executive's Responsibilities as The Accountable Officer of The Trust

The Secretary of State has directed that the Chief Executive should be the Accountable Officer to the Trust. The relevant responsibilities of Accountable Officers, including their responsibility for the propriety and regularity of the public finances for which they are answerable, and for the keeping of proper records, are set out in the Accountable Officers' Memorandum issued by the Department of Health.

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

Statement of Directors' Responsibilities in Respect of The Accounts

The directors are required under the National Health Service Act 2006 to prepare accounts for each financial year. The Secretary of State, with the approval of the Treasury, directs that these accounts give a true and fair view of the state of affairs of the Trust and of the income and expenditure of the Trust for that period. In preparing those accounts, the directors are required to:

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

By order of the Board


Date: 20 June 2007
David Law
Chief Executive


Date: 20 June 2007
Phil Bradley
Deputy Director of Finance

Annual Report 2006/2007: Financial Review

“The Trust continues to work hard and collaboratively with the Strategic Health Authority and the Primary Care Trusts in implementing cost savings targeted at reducing the Trust’s month-on-month deficit” 

Introduction

The Trust, like others in the NHS, continues to face many and varied challenges, the most notable of which are the balancing of the financial position and the achievement of long-term financial stability; meeting the ever growing needs, demands and expectations of patients; the delivery of high quality healthcare and the implementation of government initiatives to drive forward improvements in current performance standards; and the delivery of healthcare and the implementation of funding flows within the NHS.

As in previous years the local Primary Care Trusts continued to be the prime funders of the services provided by the Trust. Eighty per cent plus of the Trust’s income from the PCTs is via the Payment by Results (PbR) regime with the remainder being via the historic block payment route.

The local PCTs removed £7m of activity from the baseline income for the Trust as part of their Turnaround Plan and demand management controls. However, activity did not reduce to the expected levels of the PCT, and in March 2007 the PCT agreed to pay £9m for this additional activity. This has been made recurring in 2007/2008.

The financial difficulties facing the Trust and the wider Hertfordshire health economy are widely recognised and for 2006 / 2007 the Bedfordshire and Hertfordshire Strategic Health Authority (SHA) set a target of an £11.5m deficit control total, “authorised overspend”, for the Trust and this has been achieved with a reported deficit of £11.4m. Whilst this represents a continued worsening of the cumulative deficit position, achieving the control total has been a major achievement. The Department of Health has confirmed that, of the cumulative deficit of £53m, only the £11.4m deficit relating
to 2006/07 will be required to be repaid from future surpluses.

During 2006/07 there was a change in the financial regime for NHS Trusts with the issue of Public Dividend Capital to finance Trust deficits being replaced with interest-bearing loans. To cover the 2006/07 deficit the Trust obtained a loan of £11.2m from the NHS Bank which is repayable over five years. Interest is charged at 5.45% p.a.

The Delivering a Healthy Future Strategy forms a fundamental part of the Trust’s financial/organisational recovery.

The Trust is currently waiting to hear the outcome of the Acute Services Review that has been carried out across Hertfordshire. This may affect the services provided by the Trust in future years with a corresponding affect on income. There is likely to be no impact until Watford becomes the main acute site for the Trust.

Turnaround Team

Following the December 2005 Pricewaterhouse Coopers (PwC) review and completion of a Turnaround Plan for the Trust, the Trust has employed an experienced Turnaround Director to drive through the plans and work streams identified in the PwC document. In addition, Project Managers have been brought in to support the Turnaround within the Divisions.

Each Division was set a Turnaround Target and developed work streams to achieve its target. Performance against these work streams was then monitored fortnightly at the Performance Management Office (PMO) review meetings where the Chief Executive and his senior team met the Senior Team from each Division.

Budgets were removed from the Divisions at individual Cost Centre Account Code Level and actual achievement was reported fortnightly to the Trust and SHA. 

Over £10m was removed at cost centre level, and pay and nonpay under spends across the Trust generated a further £5m of savings, therefore achieving the £15m savings target and the Trust’s £11.5m overspend ‘control total’.

The Trust recognises that there remains room for improvement and that there are many difficult decisions to be taken in the future to achieve its desired position.

The Trust continues to work hard and collaboratively with the SHA and PCTs in implementing cost savings targeted at reducing the Trust’s month-on-month deficit, and making plans to get back into monthly balance in 2007/2008.


Date: 20 June 2007
Phil Bradley
Deputy Director of Finance


Date: 20 June 2007
David Law
Chief Executive

Better Payments Practice Code

Details of compliance with the code are given in note 6 (page 35) to the accounts.

Pay

The Trust applied the nationally agreed pay increase to all staff and therefore complied with the Secretary of State’s requirement that pay increases for managers overall should not exceed 3.6%. The pay increase was a phased award of 1% from April 2006 and a further 1.2% from November 2006. The Trust has a well established Joint Consultative Committee, which provides a monthly forum for managers and staff side representatives to discuss and agree any changes to working arrangements or terms and conditions of employment.

Audit Services

The Audit Commission is appointed as the Trust’s External Auditors. Audit fees per 2006/07 accounts were £281,000. There were no further assurance or other audit services. 

The Trust’s Committees

During 2006/07 the Trust reviewed the Board sub committee structure. In October the Board approved a document setting out the governance arrangements for the Trust, together with a revised committee structure. The Risk Management, Clinical Governance, Human Resources and Information Governance Committees were replaced with a single Assurance Committee. 

Audit Committee

Membership: Martin Saunders (Chairman), Robin Douglas, Mahdi Hasan

Remit: The Audit Committee shall provide the Board with a means of independent and objective review of:

Finance and Performance Committee

Membership: Professor Thomas Hanahoe (Chairman), Robin Douglas, Martin Saunders, Colin Gordon, David Law, Stephen Day, Professor Graham Ramsay, Nick Evans, Sarah Wiles (formerly Sarah Shaw)

Remit: To ensure that the Trust has sound financial and clinical performance systems that assess the current financial performance and plans for the future; that risks are assessed regularly and that the Trust has adequate plans, processes and systems for minimising risk; that financial and clinical outcomes are reviewed regularly against targets and that in light of those outcomes appropriate action is taken; that there is a robust, forward looking financial strategy that addresses the known and anticipated medium and longer term issues.

Remuneration Committee

Membership: Professor Thomas Hanahoe (Chairman), Mahdi Hasan, Katherine Charter
Remit: To advise the Trust Board on the appropriate levels of remuneration and terms of employment for the Chief Executive and other Executive Directors of the Trust, including the Medical Director in respect of his/her Management contract.

To approve on behalf of the Trust Board the recommendations of the Discretionary Points Committees in relation to:

Assurance Committee

Membership: Robin Douglas (Chairman), Mahdi Hasan, Katherine Charter, David Law, Professor Graham Ramsay, Gary Etheridge, Nick Evans, Sarah Childerstone 
Remit: To ensure that the Board has a sound assessment of risk and that the Trust has adequate plans, processes and systems for minimising risk.

Investing In Your Health Project Board

Membership: Robin Douglas (Chairman), Martin Saunders Gary Etheridge, Graham Ramsay, Sarah Wiles (formerly Sarah Shaw), Sarah Childerstone, Stephen Day, External representatives 
Remit: Provide leadership and a clear strategic direction for the Projects forming the West Herts IiYH Programme, making clear decisions regarding the strategic direction of each of the Projects including but not limited to the resource commitment, objectives, priorities, risk profile and Project deliverables.

Remuneration Report 2006 - 2007

I have pleasure in presenting the Remuneration Report for the West Hertfordshire Hospitals NHS Trust for 2006/07. This report outlines the executive appointments procedures and the salaries and pension benefits of the senior managers in tables A and B [ >> please download the Annual Report 2006-2007, and view tables on p28 ]

Executive Appointments

The Chief Executive and other Executive Directors are appointed by the Trust in accordance with Department of Health (DoH) guidelines and local policies. The appointments are substantive and may be terminated in accordance with statutory provisions and local policies. The Chairman and Non-Executive Directors are appointed by the Secretary of State for Health for a fixed term.



Date: 20 June 2007
David Law
Chief Executive

Non-Executive Members’ Pensions

As Non-Executive members do not receive pensionable remuneration, there will be no entries in respect of pensions for Non-Executive members.

Cash Equivalent Transfer Values

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies. The CETV figures and the other pension details include the value of any pension benefits in another scheme or arrangement which the individual has transferred to the NHS pension scheme. They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries.

Real Increase in CETV

This reflects the increase in CETV effectively funded by the employer. It takes account of the increase in accrued pension due to inflation; contributions paid by the employee (including the value of any benefits transferred from another scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Declaration of Interests

The Trust Board has taken all necessary steps to ensure that it is aware of any relevant audit information, and to ensure that the Trust’s auditors have been made aware of all such relevant audit information of which the Trust’s auditors are unaware.

Name Declaration Noted by the Board Interest Declared
Professor
Thomas Hanahoe
April 2007		  - Governor North Herts College of Further Education
Martin Saunders  April 2007 - Member Hertfordshire County Council
- Member Hertsmere Borough Council
- Director City Acre Property Investment Trust Ltd and Subsidiary
Companies
- Governor Aldenham School
- Governor The Purcell School
Robin Douglas  April 2007 - Vice Chair of the Health and Social
- Care Advisory Service
- Chair of The Who Cares? Trust
- Independent consultant in public services via Douglas Consulting
- National Advisor to the Local Govt Leadership Centre and Coach
with the NHS Institute
Colin Gordon  April 2007  
Mahdi Hasan  April 2007  
Katherine Charter April 2007 - Nil return
David Law April 2007 - Nil return
Professor Graham Ramsay April 2007 - Editor in Chief PACT Multimedia Intensive Care Educational
Programme
- Founder/Executive Committee Member Surviving Sepsis Campaign
- Consultant & Adviser to Respironics Inc
- Consultant to Edwards Lifesciences
Gary Etheridge  April 2007 - Nil return
Nick Evans  April 2007 - Treasurer St. Mary’s Church, Hornsey Rise, London N19 and Upper
Holloway Parochial Church Council
Sarah Wiles (formerly Sarah Shaw) April 2007 - Nil return
Sarah Childerstone April 2007 - Married to Regional Director of BUPA Care Homes covering South
East England
- Vice Chair of the Council of the Tavistock Institute of Human
Relations in London
Letter of Representation

From: West Hertfordshire Hospitals NHS Trust Trust Offices, Hemel Hempstead General Hospital Hillfield Road, Hemel Hempstead Hertfordshire HP2 4AD

To: Mr Rob Murray
District Auditor, Audit Commission, 1st and 2nd Floors Sheffield House, Lytton Way, Off Gates Way Stevenage Hertfordshire SG1 3HB

Re: West Hertfordshire Hospitals NHS Trust Financial Statements for the 12 Months Ended 31st March 2007

Dear Mr Murray,
We confirm to the best of our knowledge and belief, having made appropriate enquiries of other directors and officers of the
Trust, the representations given to you in connection with your audit of the financial statements for the 12 months ended 31st March 2007. In particular we confirm:

This letter has been discussed and approved by the Trust Audit Committee at its meeting held on 20th June 2007.
Yours sincerely,


Date: 20 June 2007
Martin Saunders
Audit Committee Chairman


Date: 20 June 2007
David Law
Chief Executive

Auditor's Report

Independent auditor’s report to the Directors of the Board of West Hertfordshire NHS Trust

Opinion on the financial statements

I have audited the financial statements of West Hertfordshire Hospitals NHS Trust for the year ended 31 March 2007 under the Audit Commission Act 1998. These comprise the Income and Expenditure Account, the Balance Sheet, the Cash flow Statement, the Statement of Total Recognised Gains and Losses and the related notes. These financial statements have been prepared under the accounting policies relevant to the National Health Service set out within them.

This report is made solely to the Board of West Hertfordshire Hospitals NHS Trust in accordance with Part II of the audit Commission Act 1998 and for no other purpose, as set out in paragraph 36 of the Statement of Responsibilities of Auditors and of Audited Bodies prepared by the Audit commission. 

Respective responsibilities of Directors and auditor 

The directors’ responsibilities for preparing the financial statements in accordance with directions made by the Secretary of State are set out in the Statement of Directors’ Responsibilities. My responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

I report to you my opinions as to whether the financial statements give a true and fair view and whether the part of the Remuneration Report to be audited has been properly prepared in accordance with the accounting policies directed by the Secretary of State as being relevant to the National Health Service in England.

I review whether the directors’ statement on internal control reflects compliance with the Department of Health’s requirements ‘The Statement of Internal Control 2003/4’ issued on 15 September 2003 and further guidance on 7 April 2006 and 2 April 2007.

I report if it does not meet the requirements specified by the Department of Health or if the statement is misleading or inconsistent with other information I am aware of from my audit of the financial statements. I am not required to consider, nor have I considered, whether the directors’ statement on internal control covers all risks and controls. I am also not required to form an opinion on the effectiveness of the Trust’s corporate governance procedures or its risk and control procedures.

I read other information contained in the Annual Report, and consider whether it is consistent with audited financial statements.

This other information comprises only the Foreword, the unaudited part of the Remuneration Report, the Chairman’s Statement and the Operating and Financial Review. I consider the implications for my report if I become aware of any apparent misstatements or material inconsistencies with the financial statements. My responsibilities do not extend to any other information. 

Basis of audit opinion

I conducted my audit in accordance with the Audit Commission Act 1998, the Code of Audit Practice issued by the Audit Commission and Internationals Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, on evidence relevant to the amounts and disclosures in the financial statements and the part of the Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Trust’s circumstances, consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements and the part of the Remuneration report to be audited are free material misstatement, whether caused by fraud or other irregularity or error. In forming my opinion I also evaluated the overall adequacy of the presentation of information in the financial
statements and the part of the Remuneration Report to be audited. 

Opinion

In my opinion:


Rob Murray
Engagement Lead
(Officer of the Audit Commission), Sheffield House, Lytton Way, Stevenage, Hertfordshire, SG1 3HB
Date: 22 June 2007

Download a copy of the Trust's Annual Report:
 2006/2007 Annual Report

 

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