BHRUT annual report 2009 - Barking Havering and Redbridge ...

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Annual Report & Accounts 2009-2010 79 39.2 Capital cost absorption rate The trust was required to absorb the cost of capital at a rate of 3.5% of forecast average relevant net assets. The rate is calculated as the percentage that dividends paid on public dividend capital, totalling for 2009/10 £4549k, bearing to the actual average relevant net assets of £129,978k, that is 3.5% (2008/09 3.1%) From 2009/10 the dividend payable on public dividend capital is based on the actual (rather than forecast) average relevant net assets and therefore the actual capital cost absorption rate is automatically 3.5%. 39.3 External financing The Trust is given an external financing limit which it is permitted to undershoot 2009/10 2008/09 £000 £000 External financing limit (22,374) (20,388) Cash flow financing (14,098) 13,441 Finance leases taken out in the year 2,026 0 Other capital receipts 0 0 External financing requirement (12,072) 13,441 Undershoot/(overshoot) (10,302) (33,829) The EFL is set by the Department of Health and determines how much (or less) cash than that generated by its activites the Trust can spend in a year. It is initially set at planning stage early in the year. The Trust's EFL was based on its original planned deficit of £24.7m, which would have led to a cash requirement of £11.7m, allowing for non-cash items such as impairments and depreciation plus capital expenditure. The out-turn was a deficit of £56.2m, which with non-cash items gives a cash requirement of £25.6m, some £13.9m more than planned. Within the year, the Trust received Public Dividend Captial of £5.0m, which was covered by an EFL adjustment, leaving £8.9m uncovered. In year, London SHA did recognise the causes of the Trust's financial pressures and increased the Trust's planned deficit from £24.7m to £54.1m. £18m of this increase was due to non-cash items such as unforeseen fixed asset impairments, the remaining £11.4m requiring cash. Although the increased deficit was supported by the SHA, the DH did not adjust the Trust's EFL. Overshooting the EFL means that the Trust has used more cash in year than the DH intended; it does not give rise to a present or future liability to the DH. Annual Accounts
80 Barking, Havering & Redbridge University Hospitals NHS Trust 39.4 Capital Resource Limit The Trust is given a capital resource limit which it is not permitted to exceed. 2009/10 2008/09 £000 £000 Gross capital expenditure 15,424 6,094 Less: book value of assets disposed of (14,247) (16,300) Plus: loss on disposal of donated assets 0 32 Less: capital grants 0 0 Less: donations towards the acquisition of non-current assets 0 (48) Charge against the capital resource limit 1,177 (10,222) Capital resource limit 1,799 (6,399) (Over)/Underspend against the capital resource limit 622 3,823 40. Related party transactions Barking, Havering and Redbridge Hospitals NHS Trust is a body corporate established by order of the Secretary of State for Health. During the year none of the Board Members or members of the key management staff or parties related to them has undertaken any material transactions with the Trust. The Department of Health is regarded as a related party. During the year the Trust has had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent Department. These entities are listed below: NHS London Barking and Dagenham Primary Care Trust Havering Primary Care Trust Redbridge Primary Care Trust South West Essex Primary Care Trust West Essex Primary Care Trust North East London Mental Health NHS Trust NHS Professionals NHS Litigation Authority NHS Blood and Transplant Other Primary Care, NHS and Foundation Trusts London Strategic Health Authority Newham PCT Mid Essex PCT South East Essex PCT Tower Hamlets PCT Waltham Forest PCT NHS Purchasing and Supply Agency In addition, the Trust has had a number of material transactions with other Government Departments and other central and local Government bodies. Such transactions were performed in furtherance of the Trust's normal activities. The Trust has also received revenue and capital payments from Barking, Havering and Redbridge Hospitals NHS Trust Charity Fund, certain of the Trustees for which are also members of the NHS Trust Board. Annual Accounts
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BHRUT annual report 2009 - Barking Havering and Redbridge ...

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