our FINANCE - The Royal Marsden

CONTENTSThe Royal Marsden was founded in 1851by William Marsden. His vision was tocreate a pioneering hospital dedicatedto excellence in the diagnosis, treatmentand care of people with cancer.We have built on his legacy and are constantlyraising standards to improve the lives of the40,000 cancer patients from across the UK andabroad that we treat each year.Today we are an NHS Foundation Trust withhospitals in Chelsea and Sutton, and a range ofpartnerships including our new ChemotherapySuite at Kingston Hospital.Together with our academic partner, TheInstitute of Cancer Research, we form thelargest comprehensive cancer centre in Europe,jointly employing over 3,500 people. Throughthis partnership we undertake research intogroundbreaking drug therapies and treatments,sharing our expertise and experienceinternationally.Our Trust 4Our New Services 6Our Breakthroughs 10Our Achievements 16Our Performance 22OUR EDUCATION AND TRAINING 28Our People 32Our Future 36Our New Faces 38Our Charity 42Our Supporters 44Our Corporate Governance 46OUR FOUNDATION TRUST BOARD 54THE WORK OF OUR BOARD 58OUR FINANCE 64At The Royal Marsden we are committed toimproving the outcomes for people with cancerthrough innovation and leading-edge practice.The Royal Marsden was founded in 1851 by WilliamMarsden. His vision was to create a pioneeringhospital dedicated to excellence in the diagnosis,treatment and care of people with cancer.The Royal Marsden NHS Foundation Trust Annual Report and Accounts 2008/09Presented to Parliament persuant to schedule 7, paragraph 25(4) of the National Health Service Act 20063

Our Trust2008/09 has been a challenging yearfor The Royal Marsden. Our staff haveachieved all quality and financial targetswith only half our operating capacityavailable in Chelsea as we continue torebuild after the fire in January 2008.This has required outstanding effortand dedication, and we would like toexpress our deep appreciation andthanks to all staff at the Chelsea, Suttonand Kingston sites for their success inmaintaining the highest standards ofcare for patients.The Royal Marsden achieved a rating of excellentfor quality of service and also for the use ofresources in the Healthcare Commission’s AnnualHealth Check. The Trust has now achieved thehighest rating possible for eight consecutive years.It was the top-performing hospital in Londonin the Annual Inpatient Survey (May 2008)and during the year won the Customer ServiceExcellence Award (previously the Charter Mark)for all services, including the new ChemotherapySuite at Kingston Hospital NHS Trust.The Trust has a strong risk rating of four fromMonitor, the regulator for NHS Foundation Trusts,and achieved its planned surplus at the end of2008/09 to reinvest in services and facilities inthe year ahead.Achievement against national targets set bythe NHS and local targets set by the Boardis important for patient and staff confidence.However, our real mission is to continue to makea national and global contribution to cancerresearch and treatment, so that more people arecured and quality of life is improved for thoseliving with cancer.The effective diagnosis and management ofpatients with cancer remains one of the majorchallenges in healthcare today, with the risingincidence of cancer worldwide and the speedof technological advance. The Royal Marsden,together with its academic partner, The Instituteof Cancer Research, is leading the developmentof cancer services from laboratory researchthrough to the delivery of treatment and careat the bedside. We strongly endorse the recentintroduction of Academic Health Science Centresto bring science and medicine closer togetherfor the benefit of patients, and look forward todeveloping service and research partnerships withthe new centres whenever we can add value.Our service strategy continues to focus on thecomprehensive provision of services across alltumour types and all treatment modalities.We have made a £25 million investment instate-of-the-art radiotherapy facilities and aredue to complete an equivalent investment insurgical and critical care capacity in 2009/10.The reorganisation of the Chelsea site will allowus to open a new Ambulatory Care Centre inthe heart of the hospital for patients needingchemotherapy and medical assessment,recognising the significant increase in demand forthis area of our service.With the support of our neighbouring Trusts, weare extending our role in diagnosis and early-stagetreatment so that we can improve speed of accessfor patients. We are working with other providersto ensure our services and patient pathways areseamless, efficient and top quality. During theyear we opened a new Rapid Diagnostic andAssessment Centre in Chelsea for quick specialistdiagnosis with a fast track to treatment if required.Patients with colorectal, prostate or breastsymptoms can now be referred directly to theCentre by their GPs and either reassured or referredon for treatment without delay.4

We are continuing to look for opportunities towork with other hospitals to set up local RoyalMarsden services in partnership with the hosthospital. Our new chemotherapy service atKingston opened in June 2008, and provides highqualitycancer care close to patients’ homes in aunique partnership between Kingston, MacmillanCancer Support and The Royal Marsden. Theservice has been extremely well received bypatients and is an important achievement for allthree partner organisations.Campaign which has made such a differenceto our ability to deliver leading edge treatmentand care. Our thanks go to our staff for theircommitment, dedication and professionalismwhich is commented on by so many patients.Our plans for the future are ambitious andessential if we are to fulfil our mission to makea difference to cancer research and treatmentglobally. We are working with The Instituteof Cancer Research to build the interactionbetween science and medicine, from bench tobedside, more effectively than ever before. Wewill complete our rebuild and renovation of theChelsea site in mid-2010, creating the mostmodern environment possible, with improvedprivacy and dignity for patients at ward level. Wewill also ensure that we are operating the bestand most effective models of care in a difficulteconomic environment.Cally Palmer, CBEChief ExecutiveTessa Green, CBEChairmanAt Sutton we will be completing a new centre forchildren and young adults in 2010, generouslysupported by the Oak Foundation and TeenageCancer Trust. We are also embarking on a phasedredevelopment of the Sutton site to ensure wecan continue to provide world-class cancer carefor all our patients.We would like to thank all those who havesupported us during an exceptional year,particularly our Non-Executive Directors whosewisdom and experience have been invaluable,and our Membership Councillors, who ensure thatpatients and carers remain the focus of our workat all times. We also thank all those who havegenerously supported The Royal Marsden Cancer5

OUR NEW ServicesDuring the year we have expanded ourservices considerably, and we are proud toannounce the opening of a number of newservices and facilities. All have the verylatest equipment and technology thatenables us to diagnose our patients earlier,treat them more effectively, and delivertreatment and care closer to their homes.Rapid Diagnostic andAssessment CentreAlready, over 3,500 people have been seen at our£6 million state-of-the-art Rapid Diagnostic andAssessment Centre (RDAC), since it opened at ourChelsea site in November 2008. Equipped to thehighest specifications, the RDAC enables swift andaccurate diagnosis for suspected breast, prostateand colorectal cancers. This means that biopsiescan be taken and examined quickly, ensuring that adiagnosis can be made for the majority of patientswithin hours. Also, patients referred by their GPare no longer seen in outpatient clinics alongsidepatients already undergoing treatment – therebyreducing the anxiety of newly referred patients.Endoscopy UnitOur new Endoscopy Unit opened to patientsin May 2008. It combines a comfortableenvironment with the latest facilities for theearly detection of gastrointestinal cancers.The Endoscopy Unit provides a facility that allowsus to target treatment if cancer is detected andmeasure how a patient is responding to therapy.It also helps us manage any complications whichmay arise during cancer therapy.6

“The new Endoscopy Unit hasmade such a difference. Everyaspect of patient care is availablehere. It’s what sets us apart.”Geraldine, Sister, Endoscopy Unit7

“People come to us and they arenaturally so worried. The fact that wecan reassure or refer them quickly goesa long way to relieving their anxiety.”Vina, Sister, Outpatients8

OUR NEW ServicesSir William Rous Unit,Kingston HospitalThe Sir William Rous Unit at Kingston NHS Trustopened officially in June 2008. It offers highqualityspecialised care to cancer patients inKingston-upon-Thames and the surrounding area,avoiding the need for patients to travel furtherafield for their treatment. The Unit is run as aunique partnership between Kingston Hospital,Macmillan Cancer Support and The Royal Marsden.It offers outpatient chemotherapy delivered byRoyal Marsden staff.Hospital2HomeHospital2Home (H2H) is a Royal Marsdeninitiative involving end-of-life care. Following asuccessful trial we have now introduced H2H asa service to all our patients and the electronicframework for delivering this care has nowbecome an NHS pilot rolled out across London.The service provides better-coordinated careby improving communication between hospitaland community services, giving patients greaterconfidence to choose to be cared for at home.H2H is delivered by a specialist palliative careteam based at The Royal Marsden. As part ofa hospital-wide support network, the teamensures that every time a patient makes thechoice to move from hospital to home, their localhealthcare services are prepared.A case conference is arranged at the patient’shome to discuss their medical, nursing, social andpsychological needs. Led by the patient or theirGP, this meeting allows the H2H team to givecarers, family, friends and local healthcare servicesa clear understanding of the patient’s medicalhistory and help plan a personalised care package.Compared with the national average,The Royal Marsden is able to offer almost twiceas many patients the choice to be supported athome for their end-of-life care.Day Surgery UnitOur recently opened Day Surgery Unit atChelsea will enable us to carry out a wider rangeof procedures as day cases. Patients requiringmelanoma, breast and gynaecological surgerywill now have the option of coming into the Uniton the morning of their procedure rather thanhaving to stay in hospital the night before. Itforms part of our plans to provide patients witha more efficient service in spacious and modernsurroundings.Interventional RadiotherapyThe Siemens Digital Interventional Room inChelsea was completed this year. This brand-newfacility is equipped with the latest technologiesto treat many conditions, but will be of particularbenefit to patients with gastrointestinal andurological cancers.State-of-the-art digital equipment allows us tocarry out complex procedures as day surgerycases. These procedures include angioplasty,chemo-embolisation, colonic stent insertionsand oesophageal dilation. Previously thesewould have had to have been performed in theoperating theatre. Simpler procedures can alsobe performed, such as the inserting of gastric andjejunal feeding tubes.The service is consultant-led and is carried out byspecialist interventional radiologists.9

OUR BREAKTHROUGHSThe Royal Marsden, together with itsacademic partner, The Institute ofCancer Research, is designated as theUK’s only specialist Biomedical ResearchCentre for cancer. The Royal Marsdenand The Institute of Cancer Researchcontinue to develop new technologiesand therapies based on the latestbreakthroughs in basic and appliedscience. The Biomedical Research Centreplays a leading role in the discoveryand development of effective waysof treating cancer for the benefit ofpatients worldwide. The results ofclinical research are presented atinternational meetings and in leadingjournals, making a major contribution tocancer research worldwide.effects, and a number of patients were able tostop taking morphine for the relief of bone pain.Larger scale clinical trials are now in progress.Detecting cancer cells in the bloodThe ability to detect circulating tumour cells(CTCs) in blood samples from patients receivinganti-cancer drugs represents a powerful newtechnique to assess their efficacy in theclinic. A team of scientists have optimisedthe technology to measure CTCs in menwith prostate cancer, and shown that specificalterations in the ERG oncogene detected inCTCs can predict the degree of benefit fromthe hormonal treatment abiraterone. In futurethis technology may help personalise cancertreatments and provide a convenient test tomonitor response to drug treatment in the clinic.New drug for prostate cancerThe groundbreaking research into a new drugfor prostate cancer called abiraterone receivedworldwide acclaim when results from the Phase Iclinical trial were published in 2008. Abirateroneworks to block the generation of key hormonesthat drive the growth of prostate cancers. Thestudy, funded by Cougar Biotechnology Inc.,found that the drug can treat up to 80% ofpatients with aggressive drug-resistant prostatecancer. Lead researcher Dr Johann de Bonoconcluded that there is significant tumourshrinkage with dramatic falls in PSA levels in themajority of advanced prostate cancer for patientsreceiving the drug. Royal Marsden patients whocontinued using abiraterone in the study wereable to have their disease controlled with few side10

“Being at the forefront of cancerresearch means we can be the first todeliver new treatments to patients.”Dr Johann de Bono,Honorary Consultant Oncologist, Drug Development11

OUR BREAKTHROUGHSHope for aggressive breast cancersInflammatory breast cancer (IBC) is one of themost aggressive forms of the disease, and theprognosis for women with advanced forms of IBCremains poor. Recent research has shown thatthe molecular profile of IBC is very different tonon-IBC, and in particular that the growth factorreceptor HER2 is frequently overexpressed in IBC.The targeted therapy trastuzumab (Herceptin)when added to conventional chemotherapy hasimproved initial induction treatment, but inevitablythe disease relapses and treatment options thenremain limited.Dr Stephen Johnston led the first international trial,funded by GlaxoSmithKline, in over 130 womenwith relapsed IBC of a new oral therapy lapatinibthat targets HER2, and showed that 50% ofpatients with refractory IBC responded.Furthermore the research identified a molecularprofile in IBC that predicted response to lapatinib,in particular co-expression of activated HER3with HER2 which is known to cause resistance totrastuzumab. This represents one of the largesttrials ever performed in IBC and it showed asurvival benefit for those who responded tolapatinib.Less is more for children with cancerNeuroblastoma is the most common childhoodmalignancy and is a major cause of death fromchildhood cancer. Professor Andy Pearson, CancerResearch UK Professor of Paediatric Oncology,led two European clinical trials which haveshown that for babies under the age of one withneuroblastoma who have widespread disease,the number of MYCN genes in the cancer cellsdetermines how aggressively the cancer behaves,and in particular who requires more intensivetreatment. Babies with tumours that do nothave an increased number of MYCN genes canbe treated by surgery alone, or with two tofour courses of chemotherapy, and they willhave an excellent (96%) chance of cure. In thepast these children received up to 12 coursesof chemotherapy. By limiting treatment we aresignificantly reducing the risks and side effects forthese very young patients, and our goal for thefuture is to individualise treatment for childrenwith neuroblastoma.This work should lead to a better treatment optionfor this aggressive form of breast cancer.12

“Specialisation, organisationand unique clinical trials helpdeliver research success.”Professor David Cunningham,Consultant and Head of Gastrointestinal UnitDr Stephen Johnston,Director of Research and Development13

“Focusing on researchhelps us find a cure.”Dr Stephen Johnston,Clinical Director for Research and Development14

OUR BREAKTHROUGHSInforming NICE guidance andchanging UK practiceThe Royal Marsden has been a major contributingcentre to national trials in both prostate andbreast cancer, assessing new radiotherapytechniques and drugs to modify the naturalhistory of these common forms of cancer.Prostate cancerProfessor David Dearnaley was Chief Investigatorfor the Medical Research Council (MRC) trial RT01in prostate cancer that assessed dose-escalatedradiotherapy with conformal radiotherapytechniques. The results of the trial led to NICEguidance in 2008 establishing dose-escalatedconformal radiotherapy in prostate cancer as thenew national standard of care in the NHS.Breast cancerIn early breast cancer, Professor John Yarnold ledthe START trials which showed that lower overallradiotherapy dosing given in fewer but largeramounts was as effective as the internationalstandard dosage regimen, in which a larger totaldosage is given over a longer period. This hasdefined a new radiotherapy treatment standard forwomen with early-stage breast cancer in the UK.the accuracy of treatment through positioningradiation within the body to give the biggestdose to the tumour and the smallest dose tothe adjacent normal tissues. This is ‘conformaltherapy’, causes fewer side effects and canpotentially give a bigger dose to the cancer,improving the chance of cureTwo new systems have been installed ontreatment machines called ‘cone beam’ and‘on-board imaging’. These check that the patient’sorgans are in the correct position relative to theradiation beam when the treatment is given. Thiscan then reduce variations of dose to the tumouron a day-by-day basis particularly in relation tobladder or bowel filling. It is possible to track themovement of the tumour during the treatment.This will increase the accuracy of the treatmentand is called Image-Guided Radiotherapy (IGRT).Improving radiotherapyThe Royal Marsden and The Institute of CancerResearch successfully secured a five-yearradiotherapy programme grant from CancerResearch UK to support further pioneeringresearch within the Department of Physics, underthe joint leadership of Professors Alan Horwichand Steven Webb.New technology in CT scanning called ‘virtualsimulation’ has improved radiotherapy forgynaecological cancer patients by increasing15

OUR AchievementsThroughout The Royal Marsden,staff have been recognised fortheir outstanding contribution andcommitment. This demonstratesthe talent, dedication and skill thatcharacterises our people and sets usapart as an organisation.Our President,HRH Prince William of WalesWe were delighted and honoured when PrinceWilliam agreed to be interviewed by one of ouryoung cancer patients. The interview, which wasexclusive to BBC Newsround, gained nationaland international media coverage for theexceptional work of our Children’s Unit. Throughhis involvement, The Prince helped focus the mediaspotlight on plans to improve services and increasecapacity at the Children’s Unit in Sutton. Whenwork finishes in 2010 it will be Europe’s leadingChildren’s and Teenage Cancer Centre, allowingus to double inpatient and day care capacity,and expand our world-leading drug developmentprogramme dedicated to childhood cancers.Johann de BonoDr Johann de Bono’s presentation on the use ofthe trial drug abiraterone ‘in castration resistantprostate cancer’ was selected to be in the ‘Best ofASCO’ (American Society of Clinical Oncology)programme. Regarded as leading-edge science, Drde Bono’s work has been internationally recognisedas being of great clinical significance.Stephen JohnstonDr Stephen Johnston, The Royal Marsden’sDirector of Clinical Research and Development,has been honoured at a top internationalbreast cancer meeting. He was selected to givethe first and main plenary at the San AntonioBreast Cancer Symposium – the largest annualsymposium in the world devoted to breast cancerresearch and physician education, which attractsmore than 6,000 physicians and scientists frommore than 80 countries around the world.16

“Interviewing Prince William was soexciting. I’m really pleased to beable to do something special for thehospital that looks after me so well.”Alice, Patient17

“The staff all feel very proud of thehigh standard of their work. There’sa really special spirit to the place.”Jill, Head Occupational Therapist, Rehabilitation19

“I was thrilled to get the award. Youshould have seen the children’sfaces when they heard about it.”Shirley, Cook, Children’s Unit20

OUR AchievementsShirley MooreShirley Moore was nominated by the children at thehospital and won a News of the World Children’sChampion Award.As the Children’s Unit Cook, Shirley’s job is toprepare food for the children – but in reality shegoes far beyond that, caring for them and providingpriceless emotional support that contributes totheir sense of security and aids recovery.Natalie PattisonNatalie Pattison won the Marjorie SimpsonNew Researcher’s Award in conjunction withthe Journal of Advanced Nursing and the RoyalCollege of Nursing. Natalie, a Clinical NursingResearch Fellow, is studying for her doctorate innursing and will attend the 2009 InternationalNursing Research Conference as part of her prize.Ruth StaffertonResearch Nurse Ruth Stafferton was namedrunner-up at the Macmillan Action for LondonAchievement Award for her work setting up asupport group for patients with radiation inducedbowel damage. The new support group for patients,the Pelvic Radiation Disease Association (PRDA)was attended by 100 patients at its first meeting.Staff Achievement AwardsMedicalPaul HarrisConsultant, Plastic Reconstructiveand Aesthetic SurgeonJulia RileyConsultant, Palliative MedicineOther clinicalPaul WadhamDeputy Laboratory ManagerNursingSamantha WigfallSpecialist Sister, NightsSally MooreLung Cancer Clinical Nurse SpecialistNon-clinicalAnn TurnerHead of Service for PALS, Patient Informationand ComplaintsMandy DoughtyHousekeeping Services ManagerSteve RussellTrust Stores ManagerThese awards are organised byThe Royal Marsden to celebrate theachievements and outstanding or specialcontributions made by our staff during the year.21

OUR PerformanceA high standard of performanceis integral to our ethos and isdemonstrated every day in our work.We always strive to exceed theexpectations of both our patients andthe public. We were very pleased toreceive the highest rating of excellentfor service quality and use of resourcesin the Healthcare Commission’s AnnualHealth Check, and to be rated the topperforming Trust in London in the NHSInpatient Survey.Healthcare Commission* Health CheckThe Royal Marsden was the only Trust to achievedouble-excellent for the third consecutive year.We were awarded the highest score of excellentfor both quality of services and use of resourcesin the Healthcare Commission’s Annual HealthCheck, which puts us in the top 10% of Trustsacross the country.It is also the eighth consecutive year we haveachieved the highest score in the HealthcareCommission’s annual ratings. The Trust received themaximum three stars for five years in a row underthe Healthcare Commission’s old rating system.The Healthcare Commission said: “The Trust isstrongly focused on patient care and staff workhard to provide a service that meets patients’individual needs. The Trust is well managedand this is reflected in the quality of its serviceprovision, use of resources and ongoing success atengaging patients.”Customer Service Excellence StandardThe Trust was successful in gaining compliancewith the Customer Service Excellence Standard,formerly known as the Charter Mark. For thetransition assessment against this new standard,the external assessor visited various wards anddepartments in Chelsea, Sutton and Kingston andinterviewed staff, patients and carers over twodays. The Customer Service Excellence Standard isvalid for three years.22

“We’re at the forefront of drugdevelopment, playing a major role inassessing new cancer treatments andgiving patients the opportunity toparticipate in new treatment trials.”Michelle, Ward Sister, Drug Development Unit23

OUR PerformanceNHS Inpatient SurveyPatients rated The Royal Marsden highly for overallcare, respect and dignity, pain control, cleanlinessand treatment. The survey is carried out annuallyacross England, involving 139,877 inpatients from165 acute or specialist trusts. A summary of theresults from this year’s survey, carried out betweenOctober 2008 and January 2009, is shown in thetable below.Patient environmentThe Patient Environment Action Team (PEAT)conducted its annual inspection of all clinicaland public areas of the Chelsea and Sutton sites.The PEAT team consisted of senior managers,patient representatives and an externalindependent assessor. It scored the Trust’s patientenvironment as excellent across a range of criteriaincluding cleanliness, infection control, generalenvironment, access, external areas, food andfood service, privacy and dignity.Further initiativesWe will continue to make improvements across allareas of the Trust. Here are some improvementsthat have been put in place this year:••Patients and families have beeninvolved in designing new facilities.••A new system for patient information has beenlaunched which ensures that every patient hasaccess to a comprehensive range of literature.••A system for dealing with second opinionreferrals has been implemented across ourorganisation. This new system will immediatelynotify medical secretaries of all referrals andprompt for requested information so secondopinions are dealt with quickly and efficiently.••The Patient Advice and Liaison Serviceteam have started a peripatetic servicevisiting patients on the wards.••A new clinical psychologist has starteda programme of work designing care forchildren whose parents have cancer.••New positions have been created toprovide information and assistance topatients outside normal working hours.Care Quality Commission Inpatient Survey 2008The RoyalMarsden %Nationalaverage %Patients who felt they received ‘excellent’ or ‘good’ care 93 79Patients who felt they were always treated with respect and dignity 92 79Patients who felt their room or ward was very clean 75 61Patients who felt they were always given enough privacy when being94 87examined or treatedPatients who said they had confidence at all times in the doctors treating them 92 80Patients who said they had confidence at all times in the nurses treating them 83 74Patients who felt they were always given choice in food 91 77Patients who felt they were definitely involved with decisions about theircare and treatment73 53Patients who felt staff did everything they could to help control their pain 83 7224

We will always ensure that patient feedback formsare an integral part of our development plans.National targetsWe continue to perform highly against nationaltargets as shown by the table on the right.Access targets 2008/09 2007/08Patients waiting less than 13 weeks at month end for first outpatient100.0% 100.0%appointmentPatients waiting less than 26 weeks at month end for inpatient admission 100.0% 100.0%Operations cancelled by the Trust at the last minute 0.6% 0.4%Number of last minute cancelled operations not0 2subsequently performed within one monthNew access targets 2008/09 TargetPatients requiring admission who waited

“Working in paediatric oncology isincredibly challenging and rewarding.”Kate, Matron, Children’s Unit26

OUR PerformanceThe Royal MarsdenNHS Foundation Trust Quality AccountSince 2007, the Board of The Royal MarsdenNHS Foundation Trust has received a balancedscorecard featuring patient and staff-orientatedkey performance indicators. These include waitingtimes, responses to complaints and the percentageof staff undergoing formal appraisal.The Board and the Membership Council alsoreceive a quarterly integrated governance reportthat provides detail on all aspects of clinical care,including trend data for areas such as health andsafety, patient and staff incidents, and waitingtimes for chemotherapy.From April 2009 the Board and ManagementExecutive now receive a monthly Quality Account.This new report focuses on certain key areas ofclinical quality performance: safe and effectivecare and a positive patient experience. The clinicalmetrics that are monitored reflect national andinternational guidance on preventable harm andclinical quality, and the national cancer agenda.The metrics have also been discussed with a widerange of clinical stakeholders, patients and carers atthe Membership Council and the Patient and CarerAdvisory Group.It is envisaged that the clinical metrics wemonitor may change or be added to, but for 2009the core metrics are as follows:Safe care1. Incidence of healthcare associated infections:methicillin resistant Staphylococcusaureus (MRSA), C.difficile, respiratorysyncitial virus (RSV) and vancomycinresistant enterococcus (VRE). The lattertwo organisms are important in the careof immunosuppressed cancer patients.2. Reduction in medication errors.3. Incidence of falls.Effective care1. Mortality rate (HSMR).2. Incidence of hospital-acquired pressure sores.3. Elective length of stay.A positive patient experience••Percentage of patients saying they were in pain.••Percentage of patients saying they weretreated with dignity and respect.••Percentage of patients who were givenenough information on discharge.Cally Palmer, CBEChief Executive27

OUR EDUCATIONAND TRAININGWhether it’s sharing our learning withthe clinical community or furthering theknowledge and improving the skills of ourstaff, education and training is made anabsolute priority at The Royal Marsden.Breast cancer conferenceWe held our first annual Royal Marsden BreastCancer Conference in the main lecture theatre ofThe Royal College of Physicians, with an audienceof more than 300 delegates.Senior members from our Breast Unit and otherspeakers gave a series of talks on the latestdevelopments in breast cancer research. Followinga wide-ranging discussion, a multi-disciplinaryteam meeting was held and a selection of difficultcases were discussed with the audience. As theconference was such a success there are plans fora regular national event.Image guided radiotherapy workshopWe held an international workshop on the benefitsof image guided radiotherapy (IGRT) for differentpatient indications.The Royal Marsden School of CancerNursing and RehabilitationWe have had another highly successful year, with56 students from the School eligible to graduate,including students qualifying with postgraduatequalifications in cancer care for allied healthprofessionals, and postgraduate qualifications incancer clinical trials. Record numbers of studentsstarted the School’s new degree programme andwe also continued to attract increasing numbers ofstudents working as clinical specialists.Educating our peopleOver the last year, we have taught and trainedover 2,000 healthcare professionals at theSchool and Conference Centre, including morethan 130 junior doctors.Hong Kong education programmeThe School was commissioned by the HospitalAuthority of Hong Kong to deliver a fivedaycancer education programme, which wasdeveloped in partnership with The Institute ofAdvanced Nursing Studies in Hong Kong for over100 nurses.Run in collaboration with BrainLAB AG, theone-day event showed the recent improvementsin the planning and delivery of complexradiotherapy treatments, where IGRT providesincreased opportunities for greater precision inradiotherapy delivery.More emphasis is now placed on the accuracy ofpatient positioning to ensure patients are set up withmillimetric accuracy for each treatment fraction.28

‘If I’m going to improve my skills,there’s no better place to learn.’Sarah Adomah, Student Nurse29

“It’s an honour to learn fromworld-leading cancer specialists.”Rosy, Student Nurse30

OUR EDUCATIONAND TRAININGErnest Miles CentenaryColorectal SymposiumInternational cancer experts gathered atThe Royal Marsden for the Ernest Miles CentenaryColorectal Symposium. The prestigious event washeld to celebrate the work of renowned colonsurgeon Dr Ernest Miles who died in 1947. Hostedby Professor Ara Darzi, Consultant Surgeon atThe Royal Marsden, speakers shared their researchabout various aspects of colorectal cancer. Thisranged from treatments throughout history toprevention methods for the future, such as usinggenetics and novel molecular therapies. ProfessorWarren Enker, from the Albert Einstein College ofMedicine in New York, was guest of honour.GP seminarsWe have held several GP seminars during theyear, covering a range of topics. The seminarshave been chaired by leaders in cancer careand treatment, including our Medical DirectorProfessor Martin Gore and Professor Ara Darzi.Pain managementA CD-ROM, designed to assist a range of healthprofessionals nationwide, in assessing a patient’s needfor pain relief, was produced by The Royal Marsdenand The Institute of Cancer Research. Managing painis one of the most problematic areas in the treatmentof cancer patients. Although it is estimated thataround 90% of cancer-related pain can be treatedsuccessfully, half of all patients still do not receiveadequate pain relief due to a variety of factors.The Royal Marsden Manual ofClinical Nursing ProceduresThe seventh edition of The Royal Marsden Manualof Clinical Nursing Procedures, published this year,provides an essential guide to clinical nursingskills and outlines step-by-step procedures relatedto every aspect of a patient’s care. Over 21,000copies have been sold.With over 350 evidence-based clinical procedures,the manual advances best practice and providesthe knowledge nurses need in order to be fullyinformed and to practise accountably withconfidence.Training initiativesThe Royal Marsden has just appointed its firstPatient Safety Fellow, Rohit Juneja, who willdevelop and implement training programmes thatmaximise our patient safety profile.With the Simulation and Technology-enhancedLearning Initiative (STeLI) we are developing anin-house, interprofessional educational facility thatuses high-fidelity simulation as an educationaltool within the Trust. This includes expanding ourclinical skills training equipment and investing in ahigh-fidelity human patient simulator.31

OUR PeopleMore than 2,500 people are employedat The Royal Marsden, representing adiverse range of professional groupsand disciplines who all play a vital rolein the smooth and successful runningof our hospital.Learning, developmentand engagementAs a Trust we make a significant investment in ourpeople by providing opportunities for staff at alllevels to enhance their skills through education,learning and development.RMH headcount as of 31 March 200929%3%4%5%6%8%Nursing 29%Students 1%Senior Managersand Managers 3%Additional ProfessionalScientific and Technical 4%Additional ClinicalServices 5%Healthcare Scientists 6%Allied HealthProfessionals 8%Every effort is made to provide employeeswith a platform to voice their concerns andrepresent themselves as individuals and groups.The Trust Consultative Committee, where staffand unions discuss Trust policies and key issueswith managers, is one such forum. In addition,Employment Partnership groups are alsoorganised to allow staff representatives in allareas to raise and discuss any issues of interestand concern.Equality and diversityWe are firmly committed to making equalityand diversity a reality for all staff, patients andeveryone who uses the hospital’s services. Ourpolicies are reviewed annually to ensure thatour staff are offered the appropriate support,regardless of gender, race, disability or long-termhealth condition, age, sexual orientation, religionor belief.Each year we prepare reports on workforce,patients and Trust Members with detailedinformation on equality and diversity. We usethese reports to create action plans that supportour Disability, Race and Gender Equality Schemes.22%13%9%Estates and Ancillary 9%Medical 13%Admin. and Clerical 22%Talking with people is a crucial part of theequality and diversity agenda and helps usget closer to what our staff and patients need.We do this through a number of forums, suchas the Patient and Carer Advisory Group andMembership Council. We also run discussion andfeedback groups and talk to organisations thatrepresent the views of others, including Scope andCancer Black Care.32

“We have a unique rapport with ourpatients – there’s no doubt about it.”Pat, Sister, Medical Day Unit33

“I’m proud to be part of a hospitalthat looks after its patients so well.”Ama, Staff Nurse, Medical Day Unit34

OUR PeopleAs a result of these discussions and withfeedback from other organisations we havetaken a number of steps to improve theinformation and services we provide to bothstaff and patients; a good example of this is therevision of our patient handbook.Feedback and improvementsThe Royal Marsden conducts the NHSannual staff survey as an assessmentof areas such as working conditionsand opportunities for development.Managers and staff work together toagree an action plan, focusing on keyareas for improvement.The Royal Marsden has consistentlybeen ranked amongst the highest20% of acute Trusts based on staffsatisfaction.We remain committed to listening to staff andcontinually aiming to improve as a healthcareprovider and significant local employer.We have launched many initiatives during theyear, including the HR Transformation Programmeto ensure that Human Resources Services achievethe same standards of excellence that we provideto our patients.Occupational HealthThe Occupational Health Department continuesto support staff across the Trust to ensurethat they are fit for work. The Department hassuccessfully tendered for a number of externalcontracts, allowing it to grow and extend therange of services provided.We have been working closely with Healthand Safety and Infection Control Teams tomaintain a safe working environment for allstaff. Occupational Health also works with theTrust to ensure compliance with the DisabilityDiscrimination Act and Equal Opportunities Policy.During 2008 a stress policy and guidance wasdeveloped. We offer counselling and supportservices. These and other complementary servicesare available to all staff and have proven to be avaluable and worthwhile means of supporting ahealthy workplace.SicknessSickness absence across the Trust has beenprovided quarterly to the Cabinet Office, in linewith the national reporting requirement:April to June 08 2.59%July to September 08 2.40%October to December 08 3.02%January to March 09 3.11%35

OUR SUPPORTERSAs ever, we extend our deepestthanks to all the supporters listedhere as well as the thousands ofothers who have given so much toThe Royal Marsden Cancer Campaign.PHILANTHROPISTSJohn and Catherine ArmitageJoy Cohen and Stanley Cohen, OBEFriends of The Royal MarsdenThe Raz Gold FoundationDon McCarthy and ChildrenThe Oak FoundationThe Presidents Club Charitable TrustJimmy ThomasThe Weston FamilyThe Charles Wolfson Charitable TrustBENEFACTORSThe David Adams Leukaemia FundThe Arbib FoundationBank of Scotland CorporateElayne and Richard CyzerThe Helen Hamlyn TrustThe Paul Hamlyn FoundationInternational Development FoundationThe Luck-Hille FoundationMartin MyersThe P F Charitable TrustRichard and Victoria SharpThe Wolfson FoundationPARTNERSPeter BeckwithBookham Amateur Golf SocietyThe Bud Flanagan Leukaemia FundThe Butchers Arms RestaurantThe Cadogan CharityThe Cridlan Ross Smith Charitable TrustSaroj ChakravartyConcert for DianaMark GettyMichael and Tessa GreenICAP plcThe Jordan Charitable FoundationPaul and Ellen JosefowitzLawrence Graham LLPAnastasios and Myriam LeventisBrian and Clare Linden44

The Mackintosh FoundationElizabeth and Daniel PeltzEmmanuel and Barrie RomanThe Stanley Sanger FoundationHugh and Kate SloaneSoroptimist International, Epsom and DistrictJ TannerTM RetailCharlie Woodward-Fisher and Phil HarrisASSOCIATESHilda and Michael AaronsonPrince Khaled bin Sultan bin Abdel Aziz al SaudAbridge Golf and Country Club Ladies SectionBryan AdamsNasser and Fawzia Al KharafiPaul BalcombeThe David and Frederick Barclay FoundationThe Ralph Bates Pancreatic Cancer Research FundThe Heather Beckwith Charitable TrustBerwin Leighton Paisner LLPJason BoasWilliam and Judith BollingerVictoria Brahm SchildBT Finance Industry SolutionsDavid BuxtonCarshalton Pantomime CompanySir Trevor and Lady ChinnR & S Cohen FoundationColefax and FowlerColoma Convent Girls’ SchoolComar Architectural Aluminium SystemsAndrew ConradChris and Jamie Cooper-HohnCuddington Golf ClubDaily Mail and General TrustLloyd DorfmanThe Eranda FoundationEuro BrokersKirsten and David FearFour Seasons Hotel LondonDerrick and Beryl FrostGrand Lodge of Mark Master Masons, Fund ofBenevolenceEdward GriffithsThe Head and Neck Cancer Research TrustRobert HoganPeter HoskinRichard HutchingsMorgan JonesThe Caron Keating FoundationThe Trustees of Mrs Margaret King’s Will TrustCharles and Caroline LavingtonLazard & Co.David LeighCharles, Patricia, Angus and Annabelle McGregorMerrill LynchMorgan StanleyMountgrange CapitalNexus Structured Finance LtdCrispin OdeyThe Patrick Parkinson FundThe Pears Family Charitable FoundationSara and Paul PhillipsThe Rayne FoundationThe Reuben FamilyBruce RitchieCleo RocosRotary Club of Braintree and BockingThe Rothermere FoundationThe Schroder FamilyShareGiftMichael and Lorraine SpencerThe Stock Exchange Amateur Boxing ClubThe Bernard Sunley Charitable FoundationDavid ThomasBarry and Laura TownsleyTudor Capital (UK) LPThe Duke and Duchess of WestminsterAlex and Fiona Wilmot-SitwellWimbledon Village StablesStephen WishartThe Wyseliot Charitable TrustStephen and Laura Zimmerman45

OUR CORPORATEGOVERNANCEDisclosure of CorporateGovernance arrangementsAfter five years as a Foundation Trust,The Royal Marsden continues to maintain anexcellent performance record. As one of the firstwave of Foundation Trusts, we have developedstrong governance arrangements through ourMembership Council and Trust Board.Membership CouncilThe role of the Membership Council(The Royal Marsden’s title for its Board ofGovernors) is set out in its Terms of Reference.The main duties of the Council are:••to appoint or remove the Chairmanand other Non-Executive Directors••to approve the appointmentof the Chief Executive••to decide the remuneration and allowances,and other terms and conditions of office,of the Non-Executive Directors••to appoint or remove the auditor.••to be consulted on the developments of forwardbusiness plans of the Trust and any significantchanges to the healthcare provided by the Trust.The Royal Marsden NHS Foundation TrustMembership is drawn from three Constituencies:Patient/Carer, Staff and Public. The Constituenciesare broken down as follows:Patient/Carer ConstituenciesThe Patient Constituency is divided into fourgeographical areas of South West London,Greater London, East Elmbridge and Mid-Surrey,and the Rest of England. Anyone living in theseareas who is over 16 years old and has been apatient at The Royal Marsden Hospital withinthe last five years can become a Member of therelevant Patient Constituency.Anyone aged 16-25 years, who is or has been apatient within the last five years and who lives inEngland can become a Member of the Paediatric/Adolescent Patient Constituency.The Carer Constituency comprises individualsover 16 years old who have attended theNHS Foundation Trust as the carer of a patientwithin the last five years and who live in England.Staff ConstituencyThe Staff Constituency comprises people who areemployed by the NHS Foundation Trust, hold anhonorary contract with the NHS Foundation Trust, orhold a joint contract with the NHS Foundation Trustand The Institute of Cancer Research. There are fourcategories of staff member: Doctor, Nurse, OtherClinical and Other Non-Clinical.Public ConstituencyThe Public Constituency comprises residents over16 years old living in the three geographical areasof the Royal Borough of Kensington and Chelsea,London Boroughs of Merton and Sutton, and theRest of England.46

OUR CORPORATEGOVERNANCEMembership numbersConstituency End March 2009Staff 2,381Patient and Carer 1,349Public 1,438Total 5,168Membership numbers have remained generallystable over the year, with a small increase inboth Public and Patient Membership. The totalPatient, Carer and Public Membership is in linewith the target for the year, however, Patientand Carer Membership is lower than the target,whilst Public Membership is higher with a smallincrease in both Patient and Public Membership.The Membership Strategy, agreed in November2007, has aims that focus on:••increasing the size of the Membership andensuring that it is increasingly representative,in order for us to hold credible elections••ensuring that our Councillors are equippedto play an active role in the strategicdevelopment and governance of the Trustthrough the Membership Council••developing and improving the range ofmechanisms which enable communicationswith and the involvement of Members.This year, activities to recruit Membersand to encourage a more representativeMembership included:••promoting Membership to patients as theycome to the end of their treatment.••raising staff awareness of Patient andPublic Membership so that they canpromote as appropriate to their patients••establishing local community links toexplore routes for promoting Membership.The Membership & Communications Sub-Committee continues to consider other waysto recruit Members, being sensitive to theissues facing patients at a time when they areundergoing active treatment for cancer.Councillors are supported through the FoundationTrust Office, with inductions arranged for newCouncillors and seminars held on key topics toprovide background information for their roles.Two Patient Events were held in the year, whichprovided members with the opportunity to hearmore about the work of the Trust and also tomeet with their Membership Councillors. Thefirst event, held in April 2008, included a tour ofthe new Radiotherapy Suite in Sutton, as well asupdates on the future development plans for theTrust and a presentation on early clinical trials.The second event, held in September 2008, focusedon Membership Councillors and staff meetingMembers in small groups to seek feedback andhear suggestions for improvements. A report onthe feedback from these discussions was providedto the Chief Operating Officer and Chief Nurse.They took forward any actions arising from issuesraised, and a summary of the responses to theissues was included in the November 2008 editionof Foundation News, the Member newsletter. Thisevent was followed by the AGM.48

The Patient and Carer Advisory Group (PCAG)is a key forum which enables the involvementof patients and carers in the design, planning,delivery and improvement of healthcare services.Members of PCAG have been involved in arange of Trust meetings and activities, includingparticipating on interview panels.Members of the group joined the PatientEnvironment Action Team assessing the hospital’scleanliness, décor, and patient privacy and dignityand were actively involved in the successfulCustomer Service Excellence assessment visit.PCAG launched the Listening Post, a servicerun once a month to collect the views andsuggestions of patients and their families aboutthe hospital. The information gathered is usedin partnership with management to makeimprovements for patients. The group alsointroduced a slot at its bimonthly meeting toreview with the relevant manager the actionstaken by a division or team in response tosuggestions and observations collected throughthe Viewpoint comment card scheme.Composition of theMembership CouncilThe composition of the Membership Councilduring the reporting period is listed in the tableon pages 52-53. Public, Patient, Carer and StaffCouncillors are elected as set out in the ModelRules for Elections as varied from time to timeby the Department of Health. The PCT and LocalAuthority Councillors are appointed pursuantto a process agreed by the appropriate PCT orLocal Authority. All Councillors have a three-yearterm of office and are eligible for re-electionor reappointment a maximum of three times(subject to any provisions set out in the ElectionScheme).The Register of Councillors’ interests is heldat the Foundation Trust Office and membersof the public can gain access to this by calling020 7808 2844, freephone 0800 587 7773 oremailing foundation.trust@rmh.nhs.uk. Memberswho wish to communicate with Councillors orNon-Executive Directors should contact theFoundation Trust Office.Meetings of the Membership CouncilThree meetings of the Membership Council, inaddition to the Annual General Meeting, wereheld during the reporting period. Individualattendance by Councillors is shown in the tableon pages 52-53.49

OUR CORPORATEGOVERNANCEElectionsElections were called in March 2008 for fourpositions due to Councillors’ terms of officecoming to an end in June 2008:In April 2008 James Miller was elected unopposedto the Patient: Paediatric and Adolescent position(second term of office).Anita Gray (second term of office) and JohnTholstrup were elected unopposed to the Patient:South West London positions. Three people stoodfor the Public: Kensington and Chelsea positionand Anthony Sykes was elected in May 2008. Theturnout rate was 35%Elections were called in August 2008 for thePublic: Elsewhere in England position but no onestood. A further election was called for the sameposition in October 2008; eight people stoodand Ann Curtis was elected in January 2009. Theturnout rate was 20%.CommunicationThere have been a number of initiatives toimprove communication between the Board andMembership Councillors, including the promotionof open Board meetings and the distribution ofkey messages from Board meetings to Councillorsand staff.Reverend Dame Sarah Mullally has continuedin her role as designated link Non-ExecutiveDirector with the Membership Council. Throughthis position, which was created in 2006, DameSarah attends Council meetings and acts as anadditional conduit between the Council and theBoard of Directors. This enables Members of theBoard, and the Non-Executive Directors, to gain agreater understanding of the views of Councillorsand Members. In November 2008 Dame Sarahwas appointed Senior Independent Director.Performance evaluation ofthe Membership CouncilThe Membership Council annually reviewsits collective performance in accordancewith the requirements of Section D2.2 of theNHS Foundation Trust Code of Governance. Thereview takes the form of an independently facilitatedworkshop with a written report of the outcomes.50

OUR CORPORATEGOVERNANCETerms of office and summary attendance by individual Councillorsat meetings of the Membership Council 2008/09Constituency Name Meetingsattended(out of 4)Term ofofficeCurrent termof office endElected CouncillorsPatient CouncillorsPaediatric and Mr James Miller 1 Second June 2011AdolescentSouth West London Mrs Anita Gray 4 Second June 2011Mr Richard Penn 0 (of 1) First June 2008Miss Margaret Jackman 0 First June 2009Mr John Rhys Hughes 3 First June 2009Mr John Tholstrup 3 First June 2011East Elmbridge and Dr James Laxton 3 Second April 2010Mid-SurreyMr Chris Pelley 2 First June 2009Greater London Mrs Hilary Bateson 3 First April 2010Dr Geoff Harding 4 First April 2010Elsewhere in England Mrs Sally Mason 4 Second April 2010Mr Barry Ellis 3 First April 2010Carer CouncillorsMr Steven Graham 3 First April 2010Mrs Lorraine Fenton 3 First April 2010Mr Charles McGregor 4 First July 2010Public CouncillorsKensington and Chelsea Mrs Sheila Ann Newsum 1 (of 1) First June 2008Kensington and Chelsea Mr Anthony Sykes 3 First June 2011Sutton and Merton Mr Anthony Hazeldine 4 Second April 2010Public CouncillorsElsewhere in England Mr Robert Shearer 1 (of 1) Second Resigned June2008Elsewhere in England Mrs Ann Curtis 1 (of 1) First (fromJan 2009)January 201252

Constituency Name Meetingsattended(out of 4)Term ofofficeCurrent termof office endStaff CouncillorsDoctor Professor Ian Smith 2 Second April 2010Nurse Mrs Lorraine Hyde 3 First April 2010Other Clinical Mr Richard Keane 4 Second April 2010Other Non-Clinical Mr Peter Kirkham 1 Second April 2010Nominated CouncillorsThe Institute of Cancer Professor Keith Willison 1 Second April 2010ResearchSouth West LondonCancer NetworkMs Charlotte Joll 3 Second April 2010West London CancerNetworkRoyal Borough ofKensingtonand ChelseaMs Fiona Bonas 2 Second Resigned May2008Councillor Ian Hanham 3 Second April 2010Sutton & Merton PCT Dr Martyn Wake 0 Second April 2010Croydon PCT Mr Dominic Conlin 1 Second April 2010Kensington & ChelseaPCTMs Jayne Liddle 0 (of 2) First October 2010Surrey PCT Mr Michael Munt 2 First October 2010University Partner VacantCancer Research UK Dr Lilian Clark 0 (of 2) First October 2010(Charity)Primary Care Referrer Dr Chris Elliott 1 First October 201053

OUR FOUNDATIONTRUST BOARDExecutive DirectorsMrs Tessa Green, CBEChairmanCRG I R ICR†Tessa Green was appointedChairman of The Royal MarsdenNHS Foundation Trust in April2004, having been Chairmanof The Royal Marsden NHSTrust since November 1998.Previously she was a Non-Executive Director of theRoyal Berkshire and BattleHospitals NHS Trust inReading, and Chairman of theResearch Ethics Committee atThe Royal Marsden. Tessa workedin the media, until 1990 as Headof Corporate Communicationsfor Carlton CommunicationsPLC. In 1991 she embarked on alaw degree and was called to theBar in 1994. She was awarded aCBE for services to healthcare inthe Queen’s Birthday Honoursin 2008. The Chairman had noother significant commitmentsduring the reporting period.Miss Cally Palmer, CBEChief ExecutiveCRG I ICRCally Palmer became ChiefExecutive of The Royal Marsdenin 1998. Previously Cally wasDeputy Chief Executive andDirector of Services at theRoyal Free Hampstead NHSTrust. Cally is an MSc graduatein Management from theLondon Business School, whichshe gained with distinction in1995, and a member of TheInstitute of Health ServicesManagement. Cally wasawarded a CBE in 2006 forher contribution to the NHS.She is a member of the Boardof Trustees of The Institute ofCancer Research.Mr David ProbertChief Operating OfficerCRG EDavid Probert was appointedThe Royal Marsden’s first ChiefOperating Officer in October2007 with responsibilityfor surgical, specialist andchronic services. David hasan MBA and has completedthe NHS ManagementTraining Programme, workingin a mixture of communityand acute settings includinga period of time with theworld renowned Institute ofHealthcare Improvement inBoston, USA.David previously workedat Guy’s and St Thomas’NHS Foundation Trust as aDeputy General Manager andwas promoted to GeneralManager in 2003.See page 63 for committees key.54

Executive DirectorsMr Alan GoldsmanDirector of FinanceI A CRGAlan Goldsman was appointedin 2002 from Guy’s and StThomas’ NHS Foundation Trustwhere he was Deputy Directorof Finance. Prior to this, Alan’scareer includes four years insenior finance roles with theHealth Service in New Zealand,and a further four years spentin the construction industry andin commercial banking. Alan isa qualified accountant and hasan MSc in Health Managementfrom City University.Professor Martin GoreMedical DirectorCRGProfessor Martin Gore qualifiedin medicine at St Bartholomew’sHospital, London in 1974. Hetrained in General InternalMedicine for five years andthen was appointed as aClinical Scientist at the LudwigInstitute of Cancer Research(1981-1984). In 1984, he joinedthe training programme atThe Royal Marsden and wasappointed Consultant CancerPhysician to The Royal Marsdenand Senior Lecturer at TheInstitute of Cancer Researchin 1988. He is on the editorialboard of several journals and haspublished over 300 articles andedited seven textbooks.He is currently Chairman of theDepartment of Health’s GeneTherapy Advisory Committeeand Vice-Chairman of theHealth and Safety Executive’sScientific Advisory Committee onGenetically Modified Organisms.Ms Shelley DolanChief NurseA CRGShelley Dolan was appointedto the role of Chief Nurseat The Royal MarsdenNHS Foundation Trust in June2007. She was promotedto Chief Nurse from herposition as the first NurseConsultant in Critical Care inthe UK, a role she took up atThe Royal Marsden in 2000.Shelley has worked clinically inthe field of intensive care for 20years, and is a trained IntensiveCare and Cancer Nurse havingachieved her MSc in CancerCare in 1996 and completedher PhD in 2009. Prior to that,she was a Staff Nurse, Sister,Clinical Tutor and a ClinicalNurse Specialist. Shelley isVice-Chair and Non-ExecutiveDirector of the Medicines andHealthcare Products RegulatoryAgency (MHRA).55

OUR FOUNDATIONTRUST BOARDNon-Executive DirectorsReverend Dame SarahMullally*R A E CRGReverend Dame Sarah Mullallywas Chief Nursing Officer forEngland/Director of PatientExperience until September2004 and Assistant Curateat Battersea Fields Benefice,London until September2006. She is now Rector forthe Church of England TeamMinistry in Sutton. Sarah isthe designated Link Non-Executive Director with theMembership Council and Chairof the Equality and DiversityCommittee. She was appointedSenior Independent Director inNovember 2008.Mr Gregory Andrews,FCA*R A I CRGGreg Andrews joinedThe Royal Marsden as a Non-Executive Director on 1 April2008. Greg has spent most ofhis career in financial services.He was with Merrill Lynchfor 20 years where he held anumber of positions includingthat of Managing Director ofMerrill Lynch InternationalBank Limited and as ChiefFinancial Officer of Merrill’sGlobal Private Banking Groupin New York. From 2002 to2006 he was Chief OperatingOfficer of New PhilanthropyCapital, and now runs his ownconsulting business specialisingin change management. He isa Governor of Epsom Collegeand advisor to and Trustee ofa number of charities. He isChair of The Royal Marsden’sAudit Committee and theInvestment Committee.Mr Colin Clark*R A CRGColin Clark has had over25 years experience in theinvestment managementindustry with Mercury AssetManagement and Merrill LynchInvestment Managers. He is aDirector of Aida Capital Ltd.and a Non-Executive Directorof Standard Life Investmentsand Alpha Strategic PLC.He is a Governor of FrancisHolland School and a foundershareholder in Notting HillPreparatory School.See page 63 for committees key.56

Non-Executive DirectorsSir John Craven*R A CRGSir John joinedThe Royal Marsden as a Non-Executive Director on 1 April2008. He was Chairman ofLonmin PLC, a primary producerof platinum group metals, untilhis retirement in January 2009.Previously he was Chairman ofFleming Family and PartnersLimited, an independent,privately-owned investmenthouse and was the Group ChiefExecutive and Chairman ofMorgan Grenfell Group PLCand a Member of the Board ofManaging Directors of DeutscheBank AG after the company’sacquisition of Morgan Grenfell.Sir John has served as a nonexecutivedirector of a numberof companies including Reuters(of which he was the SeniorIndependent Director), SociétéGénérale de Surveillance andDucatti SpA. He holds bothBritish and Canadian nationalityand was knighted for his servicesto banking and to the CityProfessor Peter RigbyICR CRG AProfessor Peter Rigby is ChiefExecutive of The Institute ofCancer Research (a Collegeof the University of London)where he is responsible for amajor programme of cancerresearch which extends frombasic laboratory sciencethrough translational researchto clinical implementation.He is a member of the Councilof St George’s, University ofLondon and of the Board ofTrustees of the University ofLondon and of the Council ofMarie Curie Cancer Care. He is aGovernor of the Wellcome Trustand a Fellow of the Academy ofMedical SciencesMr Richard Turnor*R CRG ARichard Turnor joinedThe Royal Marsden as a Non-Executive Director on 1 January2009. He was a partner withthe international law firm,Allen & Overy LLP, from 1985until 30 April 2009 and latterlyheaded the Commercial Trustand Partnership Group of thatfirm. With effect from 1 May2009, he has performed thesame role in Maurice TurnorGardner LLP, an independentfirm practising in associationwith Allen & Overy LLP. Headvises professional firms andfund managers on structuringand constitutional issues,including international structure,and on disputes, mergers,de-mergers and governanceissues. He was Vice Chairmanof The Royal Marsden CancerCampaign from 2002-2008.* The Non-ExecutiveDirectors which the Boardconsiders to be independent57

THE WORK OF OUR BOARDThe Foundation Trust’s Standing FinancialInstructions Policy sets out the powersreserved for the Board of Directors andthe Scheme of Delegation sets out itsother responsibilities. Decisions taken bythe Board include the following:••regulations and control••appointment and dismissal of committees••strategy, business plans and budgets••policy determination••appointment of internal auditors••receipt and approval of the Trust’sAnnual Report and Accounts••monitoring and continuous appraisalof the affairs of the Trust.Decisions delegated to management includepolicy implementation and operationalmanagement. The Trust’s Management Executive(ME) meets monthly, as does the PerformanceReview Group, which looks at key performanceissues. In addition, the Financial StrategyGroup, which comprises all members of ME,meets bimonthly and focuses on long-termservice development plans, business cases,asset management, financial restructuring,benchmarking, new business opportunities andother strategic issues before they are presentedto the Board.Board of Directors’ balance,completeness and appropriatenessThe Nominations Committee has consideredthe key business backgrounds felt to beimportant on the Board against its currentprofile. The Board considers its currentcomposition to be balanced, complete andappropriate to the requirements of theNHS Foundation Trust. When vacancies arise, theBoard and Nominations Committee considerthe balance and ensure role descriptions aredeveloped which accurately reflect the Board’srequirements.Performance evaluation ofthe Board of Directors, itsCommittees and its DirectorsA process of evaluating Board Committees wasconsidered and agreed by the Trust Board inNovember 2006. All Board-level Committees,with the exception of the NominationsCommittee, undertook a self-evaluation in2008. This evaluation involved a formal reviewof existing terms of reference, with allowancewithin the agenda for an open discussion on howthe Committee has performed against its termsof reference and appropriate changes made asnecessary. The Nomination Committee will becarrying out a self evaluation in 2009.The Trust Board completed a structured selfevaluationin 2008. Summary recommendationswere drawn from a collation of responses to threequestionnaires focusing on:••operation of the Board••the strategy of the Board••attitudes of the Board.58

THE WORK OF OUR BOARDThe information and analysis, including acomparison with the previous year’s evaluation,was discussed at a Board seminar to highlightareas for any development of future action.The Chairman is appraised annually througha comprehensive process led by the SeniorIndependent Director. This takes into accountthe views of the Board, the MembershipCouncil and the Charity Trustees. The SeniorIndependent Director formally reports theoutcome of these discussions to the TrustBoard and Membership Council.The Chairman conducts an annual appraisal ofNon-Executive Directors. This information is animportant part of the consideration when anindividual is seeking reappointment.Members of the public can gain access to theRegister of Directors’ Interests through theFoundation Trust Office by telephoning 020 78082844, freephone 0800 587 7773 or emailingfoundation.trust@rmh.nhs.uk.The Audit CommitteeThe Audit Committee is formally constitutedas a sub-committee of the Trust Board and itsmain purpose is to independently contribute tothe Board’s overall process for ensuring that aneffective internal control system is maintained.In particular the Committee has the followingkey objectives:••providing confidence in the objectivityand fairness of financial reporting••providing assurance about theadequacy of internal control••safeguarding of assets••reducing the risk of illegal or improper acts••reinforcing the importance, independence andeffectiveness of internal and external audit.The Nominations CommitteeThe Nominations Committee was establishedin 2004 to manage the appointment orreappointment of Non-Executive Directors tothe Trust. The Committee has responsibilityfor handling all aspects of the recruitmentand remuneration process and makestheir recommendation for approval to theMembership Council.Membership of the Nominations Committee issought from the Trust Board and the MembershipCouncil and comprises the Chairman (or ViceChairman for recruitment to a Chairmanvacancy), two Non-Executive Directors, twoMembership Council Representatives (asnominated by the Membership Council) andtwo Executive Directors. Within the abovemembership, those attending particular meetingswill vary according to the business of themeeting, i.e. a Non-Executive Director wouldnot attend when his/her reappointment is underdiscussion. Where remuneration is discussed,only Council Members attend and a furtherrepresentative of the Council is co-opted on tothe Committee.No meetings of the Nominations Committeewere held during the year. However duringthe reporting period three new Non-ExecutiveDirectors joined the Trust, the process andtimetable for making their appointments havingbeen agreed by the Nominations Committeethe previous year, including role descriptions andopen advertising.60

Reappointment of ChairmanThe reappointment of the Chairman wasconsidered in private session at a full meetingof the Membership Council in February 2009, toensure a fully transparent and inclusive process,which was agreed by the Council. The SeniorIndependent Director led a private discussionfor all Councillors, which included feedback onthe Chairman’s performance evaluation, hercontinuing effectiveness and commitment to therole and her willingness to stand again. DameSarah also reported on discussions at the specialmeeting of Non-Executive Directors and at theBoard, which had both confirmed their supportfor the reappointment.Following this discussion the Council agreed thereappointment of the Chairman for a furtherthree years from 1 November 2009. This decisionwas formally ratified at the meeting of theMembership Council on 12 May 2009The Clinical/Research Governanceand Risk ManagementMonitoring CommitteeThe Clinical/Research Governance and RiskManagement Monitoring Committee supports theTrust Board in developing an integrated approachto governance by ensuring robust systems, whichenable achievement of its objectives. A key focusof the Committee is patient safety, includinginfection control.The Equality and Diversity CommitteeThe Equality and Diversity Committee sets thestrategic direction for equality and diversityin service provision and development and inemployment matters, in line with the Trust’sstrategy. It considers the implications of localand national initiatives from a patient, staff andpublic perspective and leads action to promotegood practice.NHS Foundation TrustCompliance StatementThe Royal Marsden NHS Foundation Trust hasgovernance policies and procedures whichsupport the main and supporting principles of theNHS Foundation Trust Code of Governance, whichwas published in September 2006.The Trust Board considers that it is compliantwith the provisions of the Code with thefollowing exceptions.C.2.1 Chief Executive and ExecutiveDirector ReappointmentThe Chief Executive and other Executive Directorsare not subject to a formal reappointment processat regular intervals. They do, however, undergoan annual appraisal to ensure continued highstandards of performance and effectiveness, whichis carried out by the Remuneration Commitee.61

THE WORK OF OUR BOARDTerms of office and attendance at meetings of the BoardDirectors, Audit and Remuneration Committees 2008/09NameRoleMeetingsattendedTerm ofofficeEnd ofcurrenttermBoard of Directors Total meetings = 10Tessa Green Chairman 10 Second 31.10.09Gregory Andrews Non-Executive Director 10 First 31.3.11Colin Clark Non-Executive Director 8 Second 30.4.11Sir John Craven Non-Executive Director 5 First 31.3.11Reverend Dame Sarah Mullally Senior Independent Director 10 Second 31.10.11Professor Peter Rigby Non-Executive Director 10 Second 31.3.11Richard TurnorNon-Executive Director 3 First 31.12.11(from 1.1.09)(out of 3)Cally Palmer Chief Executive 10Shelley Dolan Chief Nurse 10Alan Goldsman Director of Finance 10Professor Martin Gore Medical Director 9David Probert Chief Operating Officer 10Audit Committee Total meetings = 4Gregory Andrews Chairman 4Colin Clark Non-Executive Director 2Sir John Craven Non-Executive Director 2Shelley Dolan Chief Nurse 4Alan Goldsman Director of Finance 4Reverend Dame Sarah Mullally Non-Executive Director 3Professor Peter Rigby Non-Executive Director 2Richard Turnor(from 1.1.09)Non-Executive Director 1(out of 1)Remuneration Committee Total meetings =1Tessa Green Chairman 1Gregory Andrews Non-Executive Director 1Colin Clark Non-Executive Director 1Sir John Craven Non-Executive Director 1Reverend Dame Sarah Mullally Non-Executive Director 1Richard Turnor Non-Executive Director 162

The Management Executive 2009Cally PalmerCEOCRG I ICRKEYACRGEIICRRMember of Audit CommitteeMember of Clinical/Research Governance and Risk ManagementMonitoring CommitteeMember of Equality and Diversity CommitteeMember of Investment CommitteeMember of the Board of Trustees of The Institute of Cancer ResearchMember of Remuneration and Terms of Service CommitteeMartin GoreMedical DirectorCRGShelley DolanChief NurseA CRGStephen JohnstonDirector ofClinical R&DCRGAlan GoldsmanDirector of FinanceA I CRGDavid ProbertChief OperatingOfficerCRG EColin RickardDirector of CapitalProjectsDeborah TarrantDirector ofWorkforce &Corporate Affairs(from Sep 08)E CRGNicky BrowneDirector ofPerformance& StrategyImplementationCRGGary BurkillHead of Facilities(from Jan 09)Kerensa HeffronDevelopmentDirector, Business &Private PracticeCRG(from July 08)Rebecca ButlerDirector ofCommunications &Fundraising(until Mar 09)Anne CareyDivisional Director,Cancer ServicesCRG(from June 08)Fran DaviesDivisional Director,Clinical ServicesCRGJon ReedDirector of ICT63

Our FinanceDirectors’ reportThe Directors present their report andaudited financial statements for theyear to 31 March 2009. The names ofindividuals who were directors of theNHS Foundation Trust during the yearare reported on page 62.Principal activitiesThe Trust’s principal activity is the provision ofhealthcare services to patients.Business reviewThe NHS Foundation Trust’s activities are reviewedin:••Chairman’s and Chief Executive’sstatement on pages 4-5••the Financial Review on pages 67-68In addition to this, other information relevant tothe NHS Foundation Trust’s activities is set out inthe other sections of this document.Post balance sheet eventsThe have been no significant events since thebalance sheet date that have had a materialimpact on the NHS Foundation Trust.Political and charitable donationsThe NHS Foundation Trust has not made anypolitical or charitable donations this year or inprevious years.64

Public sector payment policyThe Trust aims to pay its non-NHS trade creditorsin accordance with the CBI prompt payment codeand government accounting rules. The target is topay non-NHS trade creditors within 30 days ofreceipt of goods or a valid invoice (whichever isthe later) unless other payment terms have beenagreed with the supplier. In 2008/09 the Trust hasfurther aimed to pay local community supplierswithin ten days.Disclosure of information to auditorsAs far as each of the Directors are aware, thereis no relevant audit information of which theauditors are unaware. Each Director has takenall the steps a Director ought to have taken tomake themselves aware of any relevant auditinformation and to establish that the auditors areaware of such information.Cost allocation and chargingrequirementsThe Trust has complied with the cost allocationand charging requirements set out in HM Treasuryand Office of Public Sector Information Guidance.Going concernThe Directors have a reasonable expectation thatthe NHS Foundation Trust has adequate resourcesto continue in operational existence for theforeseeable future. For this reason, they continueto adopt the going concern basis in preparing theaccounts.AuditorsThe Trust’s appointed external auditors areDeloitte LLP. The auditors provide audit servicescomprising carrying out the statutory auditof the Trust’s annual accounts and the use ofresources work as mandated by the HealthcareCommission. The cost of this audit service in2008/09 was £62,000 (2007/08 - £57,000).65

Our FinanceRemuneration Report 2008/09The Royal MarsdenNHS Foundation Trust presents itsRemuneration Report as required byMonitor, the Independent Regulator ofNHS Foundation Trusts.1. Remuneration of executive directorsThe basic salaries of executive directors aredetermined by the Remuneration & Terms ofService Committee in relation to market ratesand following consideration of advice from theNHS Executive. Performance related bonusesare determined by the Remuneration & Termsof Service Committee based on an appraisalof performance against pre-defined objectivesand are set in relation to salary levels and bestpractice within the private and public sectors.Details of the membership of the Remuneration& Terms of Service Committee are outlined in TheTrust Board section of the Annual Report on page62.2. Remuneration ofnon-executive directorsIt is for the Membership Council at a GeneralMeeting to appoint or remove the Chairman andother Non-Executive Directors. All appointmentshave been made for three years.Details of the date of appointment and end ofcurrent term of office for non-executive directorsare outlined in The Trust Board section of theAnnual Report on page 62.No compensation for early termination is provided.3. Salary and pension entitlementsof directors for the yearended 31 March 2009Details of remuneration, including the salaries andpension entitlements of the Board of Directors, arepublished in the annual accounts on pages 93-94.The dates of appointment for executive directorsare outlined in The Trust Board section of theAnnual Report on pages 54-55. The notice periodsfor executive directors are:Chief ExecutiveChief NurseChief Operating OfficerDirector of FinanceMedical Director6 months3 months3 months3 months3 monthsNo compensation for early termination is provided.Duration of contracts, and the notice periodsoutlined above, are in line with NHS standardpractice.66

Financial review for the yearended 31 March 2009In its fifth year as a Foundation Trust,The Royal Marsden has maintained its excellenttrack record of financial performance. The Trusthas met and in most cases exceeded its financialand performance plans for the year.The Trust generated a surplus for developmentof £5.7m. It should be noted that this sumincludes an accounting gain on the destructionof fixed assets of £0.5m, following the major fireon the Trust’s Chelsea site in January 2008. The‘underlying’ surplus for development is therefore£5.2m, against a full year plan of £4m. This resultis due to a combination of factors including thedelivery of the Trust’s efficiency targets, strongNHS and private patient income performance,and good financial discipline and cost control.The surplus will be applied to capitaldevelopment; in particular to schemes that willenhance services to patients on both the Chelseaand Sutton hospital sites.The Trust continues to maintain a strong balancesheet and cash position. At 31 March 2009 theTrust held cash deposits of £44.3m, a reduction of£3.1m over the previous year. This reduction wasdue in the main to extensive capital programmeexpenditure, and future cash flow plans arealigned with the latest capital programme.Cash deposits are now mostly committed toexpenditure on this programme.A professional valuation firm completed aninterim valuation of the Chelsea and Suttonsites as at 31 March 2009. As a result fixed assetvalues were reduced by £3.1m and booked to therevaluation and donated asset reserves.EfficiencyThe Royal Marsden continues to be committed todelivering its plans for efficiency. £11.7m has alreadybeen delivered in the first five years of operation asan NHS Foundation Trust and it is anticipated that afurther £8.3m of recurrent savings will be deliveredover the coming three years.The rationale for this programme is to reduce unitcosts and overheads in order to create marginson activity so that this can be reinvested inBusiness Strategy developments. This will alsoenable The Royal Marsden to maintain its positionas a comprehensive cancer care provider in anevolving market and to manage risk by creatingfinancial contingency.The efficiency programme is broken down equallyinto initiatives which will increase income withless, or no, increase in costs; and those whichreduce costs with less, or no, reduction in income.These include in clinical service redesign, drugsand other non-pay procurement, and workforcemodernisation.The Trust has a form of service line reporting (ortrading accounts) for its patient activity portfolio.This involves an adjustment for the marginal costof delivering activity over (or under) the activitylevel funded in the annual financial plan.Financing and investmentThe Trust has an authorised Prudential BorrowingLimit of £55.8m. Because the Foundation Trusthas maintained healthy cash flow it has notneeded to use any of this borrowing facility todate.67

Our FinanceThe Foundation Trust Board previously approveda five-year capital programme, totalling £111m.This investment programme continues to developand will, for the most part, provide new assetsthat are considered ‘protected’ for the NHS underthe Foundation Trust Terms of Authorisation.Income and expenditure plansThe Foundation Trust receives the majorityof its patient care income from Primary CareTrusts. Patient referrals are centred on theTrust’s sites in London and Surrey but extendfrom this local base to cover all of Englandand beyond, particularly for referrals for rarercancers. The patient referral pattern is reflected inrepresentation on The Royal Marsden MembershipCouncil.Patient care income is supplemented by incometo provide infrastructure support for research anddevelopment activity and from private patientincome. The margin delivered on our privatepatient income remains a vital source of supportfor NHS services to patients. Private income isexpected to continue to grow, alongside growthin NHS income, though it is expected to remainwell within the private patient income ‘cap’ setout in the Trust’s Terms of Authorisation.Relationships with key stakeholdersThe Trust continues to maintain strong andproductive relationships with Primary CareTrusts; which are governed by the legally bindingcontract introduced as part of the FoundationTrust reforms. Over the year the Foundation Trusthas delivered increased activity for NHS patients.In June 2008 the Trust’s new Chemotherapy Unitopened at Kingston Hospital. The number ofpatients referred and treated at this unit has beenabove plan in the first nine months of operation.A second chemotherapy unit, operating alongsimilar lines, is expected to be opened in thefuture at Mayday University Hospital.Managing risksFinanceOver the full year the Trust has consistentlymaintained a financial risk rating of 4 (where 5 inthe highest and 1 the lowest). This means that theTrust is considered, by Monitor – the IndependentRegulator of NHS Foundation Trusts – to be lowrisk in financial terms. This risk rating incorporatesthe key financial performance indicators for theTrust and is made up of the following measures:••EBITDA margin (rating 3)••EBITDA achievement of plan (rating 5)••return on assets (rating 3)••I&E surplus margin (rating 4)••liquidity (rating 5).The Trust continues to work towards the successfulimplementation of International FinancialReporting Standards. The Trust has made detailedpreparations and will be able to submit accountsunder these standards in line with the requiredtimescales.GovernanceThe Trust is rated on its governance arrangementswhich cover compliance with the Terms ofAuthorisation. The rating is based on selfcertificationwhere the Foundation Trust Boardis required to confirm that all core national68

healthcare targets and standards have been met,and that plans are in place to ensure that theywill be met going forwards.There are two possible declarations; the firstis unqualified and the second qualified withsupporting narrative. At the end of the yearthe Foundation Trust Board has approved anunqualified declaration.Mandatory servicesThe Trust is rated on its provision of MandatoryServices in conjunction with the HealthcareCommission. The Trust has continued to maintainits ‘green’ rating from Monitor.••Changes in NHS R&D funding representa significant risk to the Trust’s researchinfrastructure and capacity. Furtherwork is being undertaken with theNHS R&D Directorate to establish aposition and allow the Trust to plan itsresearch portfolio in the year ahead.••The ongoing policy of the development ofthe Trust’s ‘satellite’ services will requiredetailed planning, performance managementand effective governance going forward.••The Trust is fully engaged with the CancerReform Strategy and the developmentstrategies of the Trust are aligned with thefuture direction set out in this policy.Counter-fraudThe Trust has a counter-fraud officer in placewho proactively reviews the Trust’s counterfraudarrangements and follows up on anyincidents reported. There is also a whistle-blowingprocedure in place and available to all staff; allmatters raised are dealt with in confidence.Principal risks and future developmentsThe following are regarded as the principal areasof risk and future development for the Trust:••The Department of Health 2009/10operating framework sets out the prioritiesfor the year, including the developmentof payment by results and the newcooperation and competition panel. TheTrust Executive has been involved in theconsultation process for this panel andcontinues to meet regularly with PCTs.••The Trust has a substantial programmeof capital development over the nextfive years. Investment has been made toensure sufficient operational support isavailable to support this programme.69

Our FinanceFOREWORD TO THE ACCOUNTSThe Royal MarsdenNHS Foundation TrustThese accounts for the year ended 31 March2009 have been prepared by The Royal MarsdenNHS Foundation Trust in accordance withparagraphs 24 and 25 of Schedule 7 of theNational Health Service Act 2006.Cally Palmer, CBEChief ExecutiveSTATEMENT OF THE CHIEFEXECUTIVE’S RESPONSIBILITIESAS THE ACCOUNTABLE OFFICEROF The Royal MarsdenNHS Foundation TrustThe National Health Service Act 2006 statesthat the Chief Executive is the AccountingOfficer of the NHS Foundation Trust. Therelevant responsibilities of Accounting Officer,including their responsibility for the proprietyand regularity of the public finances for whichthey are answerable, and for the keeping ofproper records, are set out in the accountingofficer’s Memorandum issued by the IndependentRegulator of NHS Foundation Trusts (“Monitor”).Under the National Health Service Act 2006,Monitor has directed The Royal MarsdenNHS Foundation Trust to prepare for eachfinancial year a statement of accounts in theform and on the basis set out in the AccountsDirection. The accounts are prepared on anaccruals basis and must give a true and fair viewof the state of affairs of The Royal MarsdenNHS Foundation Trust and of its income andexpenditure, total recognised gains and losses andcash flows for the financial year.In preparing the accounts, the Accounting Officeris required to comply with the requirements ofthe NHS Foundation Trust Financial ReportingManual and in particular to:••observe the Accounts Direction issued byMonitor, including the relevant accounting anddisclosure requirements, and apply suitableaccounting policies on a consistent basis••make judgements and estimateson a reasonable basis70

••state whether applicable accounting standardsas set out in the NHS Foundation TrustFinancial Reporting Manual have beenfollowed, and disclose and explain any materialdepartures in the financial statements••prepare the financial statementson a going concern basis.The Accounting Officer is responsible for keepingproper accounting records which disclose withreasonable accuracy at any time the financialposition of the NHS Foundation Trust andenable her to ensure that the accounts complywith requirements outlined in the abovementioned Act. The Accounting Officer is alsoresponsible for safeguarding the assets of theNHS Foundation Trust and hence for takingreasonable steps for the prevention and detectionof fraud and other irregularities.To the best of my knowledge and belief, I haveproperly discharged the responsibilities set outin Monitor’s NHS Foundation Trust AccountingOfficer Memorandum.Date: 4 June 2009Cally Palmer, CBEChief ExecutiveSTATEMENT ON INTERNAL CONTROL2008/09 The Royal MarsdenNHS Foundation Trust1. Scope of responsibilitiesAs Accounting Officer, I have responsibilityfor maintaining a sound system of internalcontrol that supports the achievement ofthe NHS Foundation Trust’s policies, aimsand objectives, whilst safeguarding the publicfunds and departmental assets for whichI am personally responsible, in accordancewith the responsibilities assigned to me. Iam also responsible for ensuring that theNHS Foundation Trust is administered prudentlyand economically and that resources are appliedefficiently and effectively.I also acknowledge my responsibilities as set outin the NHS Foundation Trust Accounting OfficerMemorandum.2. The purpose of the systemof internal controlThe system of internal control is designed tomanage risk to a reasonable level (rather than toeliminate all risk of failure) to achieve policies,aims and objectives; it can therefore only providereasonable and not absolute assurance ofeffectiveness.The system of internal control is based on anongoing process designed to:••identify and prioritise the risks to theachievement of the policies, aims and objectivesof The Royal Marsden NHS Foundation Trust71

Our Finance••evaluate the likelihood of those risksbeing realised and the impact shouldthey be realised, and to manage themefficiently, effectively and economically.The system of internal control has been in placein The Royal Marsden NHS Foundation Trust forthe whole year ended 31 March 2009 and up tothe date of approval of the annual reports andaccounts.An Assurance Framework has been establishedwhich is designed to meet the requirementsof the 2008/09 Statement on Internal Controland provide reasonable assurance that thereis an effective system of internal control tomanage the principal risks as identified by theNHS Foundation Trust.The controls and assurances noted within theFramework have been in existence for some timeand continue to be in place.Allocation of responsibility for the implementationof risk management is delegated to a range of staffacross the organisation. Their roles and responsibilitiesfor risk management are clearly defined.Risk management training is provided for everymember of staff at induction and the Head ofRisk Management is responsible for providingadvice and expertise to all staff. Ongoing trainingis determined via the appraisal and personaldevelopment planning process at an individuallevel and by training needs analysis against keyrisk areas at a strategic level.Guidance for staff is provided through trainingprogrammes that create a learning culture withinthe organisation. Information is available in the RiskManagement Policy, which is in turn supported bythe Accident/Incident Reporting & InvestigationPolicy. All policies relating to risk managementare easily accessible and available to staff on thehospital intranet.3. Capacity to handle riskThe NHS Foundation Trust’s Board ofDirectors provides leadership and a high levelof commitment for establishing good riskmanagementsystems across the organisation.The Chairman of the Clinical ResearchGovernance and Risk Management MonitoringCommittee is also the Chair of the Board, andmembership includes Executive Directors and sixNon-Executive Directors. As a sub-group of theBoard, the Committee is responsible for approvingthe strategic management of risk and monitoringthe implementation of risk-managementarrangements within the NHS Foundation Trust.The Chief Nurse is identified as the ExecutiveDirector with responsibility for risk management.4. The risk and control frameworkThe Risk Management Policy has been approvedby the Board and is reviewed on an annualbasis. It defines the process for the systematicidentification and control of risks. It clearlydefines accountability structures, roles andresponsibilities. The policy details the processfor risk identification and evaluation using astandardised risk assessment matrix and sets outthe levels of authority for the management ofidentified risk.Risk management is firmly embedded into theactivity of the organisation and operationalresponsibility for risk identification and controlis delegated to individual Directors and SeniorManagers who have functional responsibilitywithin their areas of management.72

The policy has been disseminated throughoutthe NHS Foundation Trust and has beencommunicated to key stakeholders.The Assurance Framework was originally adoptedby the Board for 2003/04 in line with Departmentof Health guidelines and this was revised anddeveloped in 2007/08 to incorporate, for example,the Healthcare Commission Standards for BetterHealth Domains. The Assurance Framework mapsout the NHS Foundation Trust’s objectives, key risksto achieving the objectives, and the controls andassurance mechanisms in place to mitigate the risks.The NHS Foundation Trust will, during 2009/10,build upon the revised Assurance Framework,continue to monitor the assurances it receivesagainst those expected within the Framework andreview progress on the action plans drawn up toclose the gaps in both controls and assurance. TheNHS Foundation Trust is fully compliant with thecore Standards for Better Health.The NHS Foundation Trust is committed tohaving an effective structure for patient andpublic stakeholder involvement at all levels withinthe organisation, and as an NHS Foundation Trustis provided with strategic direction by theMembership Council.The NHS Foundation Trust has implementeda Patient and Public Involvement Strategy. Apublic representative has been an active memberof the Clinical Research Governance and RiskManagement Executive Committee for severalyears. A key development is the increasedinvolvement of the Patient and Carer AdvisoryGroup which acts as the focus for all local patientinvolvement initiatives.The NHS Foundation Trust complies with equality,diversity and human rights legislation.The Board reviewed the systems and proceduresfor securing personal data, including patient datain transit and were satisfied that these have beenand remain compliant with relevant informationgovernance guidance and the Data ProtectionAct 1998. A new programme highlighting therisks surrounding sensitive information has beeninitiated to reinforce awareness amongst staff.Encryption devices have been supplied to relevantmembers of staff and internal audit reviews intodata and IT systems security have been carriedout during the year, the recommendations ofwhich have been, or are in the process of being,implemented.5. Review of economy, efficiency andeffectiveness of the use of resourcesThe NHS Foundation Trust has establishedarrangements for managing its financial andother resources which demonstrate that valuefor money is being managed and achieved. TheNHS Foundation Trust:••Achieved its financial plan and efficiency targetsin 2008/09 and has an ongoing plan to improveorganisational efficiency. This is managed bythe NHS Foundation Trust’s Board of Directors.••Reviewed key processes, such as thelevels of pre-ordering of chemotherapydrugs by clinicians, to improve theefficiency of the service.••Has not considered formally the potential for‘financial’ shared services, other than for theprovision of payroll services, but has consideredcloser working with The Institute for CancerResearch and other NHS Trusts across arange of clinical and non-clinical functions.73

Our Finance••Is keen to develop its benchmarkingcapability and to gather the evidenceto be able to demonstrate differencesbetween services and organisation.••Continued to identify potentialproductivity gains to be obtained fromnew workforce contract arrangements andinternal workforce planning systems.••Completed a three year procurementprogramme to improve efficiency in purchasingacross a number of areas in the Trust,examples being the use of a single providerfor travel services and reductions in the costsof a number of maintenance contracts.6. Review of effectivenessAs Accounting Officer, I have responsibility forreviewing the effectiveness of the system ofinternal control. My review is informed by thework of internal auditors and the executivemanagers within the NHS Foundation Trust whohave responsibility for the development andmaintenance of the system of the internal controlframework, and comments made by externalauditors in their management letter and otherreports.I have been advised on the implications of theresult of my review of the effectiveness of thesystem of internal control by the Board andthe Audit Committee, and a plan to addressweaknesses and ensure continuous improvementof the system is in place.The Assurance Framework itself provides me withevidence that the effectiveness of controls thatmanage the risks to the organisation achieving itsprincipal objectives have been reviewed.My review is also informed by:••assessment of financial reportssubmitted to Monitor, the IndependentRegulator of NHS Foundation Trusts••opinions and reports made by external auditors••opinions and reports made by internal auditors••achievement of double-excellent in theHealthcare Commission Annual Health Check••achievement of Charter Mark standardfor Customer Service Excellence••ISO 9001 compliance for radiotherapyand chemotherapy••Clinical Pathology Accreditation (CPA)held for designated pathology services••Clinical Governance Annual Report••Quarterly Integrated GovernanceMonitoring Reports••Infection Control Annual Report••Clinical Audit Reports and Action Plans••Investigation Reports and Action Plans followingSerious Untoward and Red Rated Incidents••Departmental and Clinical RiskAssessments and Action Plans••results of the National Patient Survey••results of the National Staff Survey.The process that has been applied in maintainingand reviewing the effectiveness of the system ofinternal control has been reviewed by:••the Board; through consideration ofkey objectives and the managementof principal risks to those objectiveswithin the Assurance Framework••the Clinical/Research Governanceand Risk Management Committee;by reviewing all policies relating to74

governance and risk management,and monitoring the implementationof arrangements within the Trust.••the Audit Committee; by reviewing andmonitoring the opinions and reports providedby both internal and external audit••the Clinical/Research Governance andRisk Management Executive Committee;by implementing and reviewing clinicalgovernance and risk managementarrangements, and receiving reportsfrom all operational risk committees.••external assessments of services.7. NHS Pension Scheme contributionsAs an employer with staff entitled to membershipof the NHS Pension Scheme control measuresare in place to ensure all employer obligationscontained within the Scheme regulations arecomplied with.8. ConclusionAs Accounting Officer and based on the reviewprocess detailed above, I am assured that thereare no significant internal control issues.Date: 4 June 2009Cally Palmer, CBEChief Executive75

Our FinanceINDEPENDENT AUDITORS’ REPORTTO THE BOARD OF GOVERNORSAND BOARD OF DIRECTORSOF The Royal MarsdenNHS Foundation TrustWe have audited the financial statements ofThe Royal Marsden NHS Foundation Trust for theyear ended 31 March 2009 under the NationalHealth Service Act 2006 (“the Act”) whichcomprise the Income and Expenditure Account,Balance Sheet, Statement of Total RecognisedGains and Losses, Cash Flow Statement and therelated notes 1 to 25. These financial statementshave been prepared in accordance with theaccounting policies set out therein.This report is made solely to the Board ofGovernors and Board of Directors (“the Boards”)of The Royal Marsden NHS Foundation Trust, as abody, in accordance with paragraph 4 of Schedule10 of the National Health Service Act 2006. Ouraudit work has been undertaken so that we mightstate to the Boards those matters we are requiredto state to them in an auditors’ report and for noother purpose. To the fullest extent permitted bylaw, we do not, in giving our opinion, accept orassume responsibility to anyone other than theTrust and the Boards, as a body, for this report, orfor the opinions we have formed.Respective responsibilities of theAccounting Officer and AuditorsThe Accounting Officer’s responsibilities forpreparing the financial statements in accordancewith directions issued by Monitor – IndependentRegulator of NHS Foundation Trusts – are setout in the Statement of Accounting Officer’sResponsibilities.Our responsibility is to audit the financialstatements in accordance with relevant legaland regulatory requirements (including statuteand the Audit Code of NHS Foundation Trusts)and International Standards on Auditing (UK andIreland).We report to you our opinion as to whetherthe financial statements give a true and fairview in accordance with the accounting policiesdirected by Monitor – Independent Regulator ofNHS Foundation Trusts. We also report to youwhether in our opinion the information givenin the directors’ report is consistent with thefinancial statements.In addition, we report to you if, in our opinion, thefinancial statements have not been prepared inaccordance with directions made under paragraph25 of Schedule 7 of the Act, the financial statementsdo not comply with the requirements of all otherprovisions contained in, or having effect under, anyenactment applicable to the financial statements,or proper practices have not been observed in thecompilation of the financial statements.We review whether the statement on internalcontrol reflects compliance with the requirementsof Monitor contained in the NHS Foundation TrustFinancial Reporting Manual. We report if it does notmeet the requirements specified by Monitor or ifthe statement is misleading or inconsistent withother information we are aware of from our auditof the financial statements. We are not requiredto consider, nor have we considered, whetherthe statement on internal control covers all risksand controls. We are also not required to form anopinion on the effectiveness of the Trust’s corporategovernance procedures or its risk and controlprocedures.76

We read the other information contained inthe Annual Report as described in the contentssection and consider whether it is consistent withthe audited financial statements. We considerthe implications for our report if we becomeaware of any apparent misstatements or materialinconsistencies with the financial statements.Our responsibilities do not extend to any furtherinformation outside the Annual Report.Basis of audit opinionWe conducted our audit in accordance with theAudit Code for NHS Foundation Trusts issuedby Monitor, which requires compliance withInternational Standards on Auditing (UK &Ireland) issued by the Auditing Practices Board.An audit includes examination, on a test basis, ofevidence relevant to the amounts and disclosuresin the financial statements. It also includesan assessment of the significant estimatesand judgements made by the Directors in thepreparation of the financial statements, and ofwhether the accounting policies are appropriateto the Trust’s circumstances, consistently appliedand adequately disclosed.We planned and performed our audit so as toobtain all the information and explanations whichwe considered necessary in order to provideus with sufficient evidence to give reasonableassurance that the financial statements are freefrom material misstatement, whether caused byfraud or other irregularity or error. In forming ouropinion we also evaluated the overall adequacyof the presentation of information in the financialstatements.OpinionIn our opinion:••the financial statements give a true and fairview of the state of affairs of The Royal MarsdenNHS Foundation Trust as at 31 March 2009and of its income and expenditure for the yearthen ended in accordance with the accountingpolicies directed by Monitor – IndependentRegulator of NHS Foundation Trusts••the information given in the directors’ reportis consistent with the financial statements.CertificateWe certify that we have completed the audit ofthe accounts in accordance with the requirementsof Chapter 5 of Part 2 of the National HealthService Act 2006 and the Audit Code forNHS Foundation Trusts.Date: 5 June 2009Heather Bygrave FCA, BA (Hons)(Senior Statutory Auditor)For and on behalf of Deloitte LLPChartered AccountantsSt Albans77

Our FinanceIncome and Expenditure Account for the year ended 31 March 20092008/09 2007/08Note £000 £000Income from activities 2, 3 151,303 133,560Other operating income 2, 4 48,222 46,112Operating expenses 5, 6 (192,341) (172,844)OPERATING SURPLUS 7,184 6,828Gain on destruction of fixed assets 6 450 9,836Loss on disposal of fixed assets 8 (182) 0SURPLUS BEFORE NET FINANCING INCOME 7,452 16,664Net financing income 9 1,729 1,913SURPLUS FOR THE YEAR 9,181 18,577Public Dividend Capital dividends payable 21.1 (3,480) (3,630)RETAINED SURPLUS FOR THE YEAR 16 5,701 14,947Balance Sheet as at 31 March 2009FIXED ASSETS31 March200931 March2008Note £000 £000Intangible assets 10 98 91Tangible assets 11 162,913 148,101163,011 148,192CURRENT ASSETSStocks and work in progress 12 3,103 2,773Debtors 13 33,788 27,347Cash at bank and in hand 17.2 44,286 47,41181,177 77,531CREDITORS: Amounts falling due within one year 14.1 (54,946) (45,442)NET CURRENT ASSETS 26,231 32,089TOTAL ASSETS LESS CURRENT LIABILITIES 189,242 180,281CREDITORS: Amounts falling due after more than one year 14.1 0 0PROVISIONS FOR LIABILITIES AND CHARGES 15 (472) (2,008)TOTAL ASSETS EMPLOYED 188,770 178,273FINANCED BY:TAXPAYERS’ EQUITYPublic dividend capital 20 85,853 85,353Revaluation reserve 16 20,140 24,395Income and expenditure reserve 16 35,695 29,993Donated asset reserve 16 47,082 38,532TOTAL EQUITY 20 188,770 178,27378

Date: 3 June 2009Cally Palmer, CBEChief ExecutiveAlan GoldsmanDirector of FinanceStatement of Total Recognised Gains and Losses for the year ended 31 March 20092008/09 2007/08£000 £000Surplus for the financial year before dividend payments 9,181 18,577Movement in revaluation reserve on reclassification/revaluation of fixed assets (4,254) (18,264)Increase in the donated asset reserve due to receipt of donated assets 10,233 6,766Reduction in the donated asset reserve due to the depreciation,impairment and disposal of donated assets (1,683) (11,529)Total gains and losses recognised in current financial year 13,477 (4,450)Cash Flow Statement for the year ended 31 March 20092008/09 2007/08Note £000 £000OPERATING ACTIVITIESNet cash inflow from operating activities 17.1 13,318 26,571RETURNS ON INVESTMENTS AND SERVICING OF FINANCEInterest received 1,729 1,913Net cash inflow from returns on investments and servicing of finance 1,729 1,913CAPITAL EXPENDITUREPayments to acquire tangible fixed assets (25,428) (20,185)Payments to acquire intangible assets 0 0Receipts from sale of tangible fixed assets 0 0Net cash outflow from capital expenditure (25,428) (20,185)DIVIDENDS PAID (3,480) (3,630)Net cash outflow before financing (13,861) 4,669FINANCINGPublic dividend capital received 20 500 7,108Other capital receipts 16 10,236 6,766Net cash inflow from financing 10,736 13,874(Decrease)/Increase in cash 17.2 (3,125) 18,54379

Our Finance1. Accounting policiesThese financial statements have been preparedin accordance with the NHS Foundation TrustFinancial Reporting Manual 2008/09 issued byMonitor. The accounting policies contained in thatmanual follow UK generally accepted accountingpractice for companies (UK GAAP) and HMTreasury’s Resource Accounting Manual to theextent that they are meaningful and appropriateto the NHS. The accounting policies have beenapplied consistently in dealing with itemsconsidered material in relation to the accounts.1.1 Accounting conventionThese accounts have been prepared under thehistorical cost convention modified to accountfor the revaluation of tangible fixed assets.NHS Foundation Trusts are not required tocomply with the FRS 3 requirements to report‘earnings per share’ or historical profits and losses.1.2 Acquisitions anddiscontinued operationsActivities are considered to be ‘discontinued’where they meet all of the following conditions:a. The sale (this may be nil consideration foractivities transferred to another public sectorbody) or termination is completed eitherin the period or before the earlier of threemonths after the commencement of thesubsequent period and the date on whichthe financial statements are approved.b. If a termination, the former activitieshave ceased permanently.c. The sale or termination has a material effecton the nature and focus of the reportingNHS Foundation Trust’s operations andd.represents a material reduction in itsoperating facilities resulting either fromits withdrawal from a particular activity orfrom a material reduction in income in theNHS Foundation Trust’s continuing operations.The assets, liabilities, results ofoperations and activities are clearlydistinguishable, physically, operationallyand for financial reporting purposes.Operations not satisfying all these conditions areclassified as continuing.Activities are considered to be ‘acquired’ whether ornot they are acquired from outside the public sector.1.3 Income recognitionIncome is accounted for by applying the accrualsconvention. The main source of income for theNHS Foundation Trust is under contracts fromcommissioners in respect of healthcare services.Income is recognised in the period in whichservices are provided. Where income is receivedfor a specific activity which is to be deliveredin the following financial year, that income isdeferred.The NHS Foundation Trust changed the form ofits contracts with NHS Commissioners to followthe Department of Health’s Payment by Resultsfinancial flows regimen from 2004/05. From2004/05 the NHS Foundation Trust has beenreimbursed for part of its activities at a nationalset tariff rather than at locally negotiated prices.To manage the financial impact of this change onthe NHS Foundation Trust and its commissioners,the Department of Health has calculated atransition path which:80

••adjusts the financial allocations ofNHS Commissioners to ensure that theimpact on their purchasing power isphased in over a three-year period;••phases in the windfall income gain/(loss) tothe NHS Foundation Trust over a four-yearperiod, such that the full impact of the nationaltariff is not felt until Year 4. This is in the formof a claw-back payment to the Departmentof Health, or a transitional relief payment,according to whether the NHS Foundation Trusthas gained or lost income.2004/05Year 12006/07Year 22007/08Year 32008/09Year 4Proportion ofincome gain/(loss) adjustedas claw-back/(transitionalrelief)Resultingimpact on NHSFoundationTrust as % ofincome gain/(loss)75% 25%50% 50%25% 75%0% 100%end, and estimating the unbilled value of theseepisodes by prorating the number of days spentas an inpatient before and after year-end.1.4 ExpenditureExpenditure is accounted for applying the accrualsconvention.Monitor’s guidance states that there shouldbe no netting off of income and expenditure.There are a number of employees of theNHS Foundation Trust that perform work forother organisations, who in turn reimburse theNHS Foundation Trust for this work. The accountsshow the income and expense from thesearrangements under the headings ‘Other income’and ‘Staff costs’ respectively.Monitor’s guidance states that there shouldbe no netting off of income and expenditure.There are a number of employees of theNHS Foundation Trust that perform work forother organisations, who in turn reimburse theNHS Foundation Trust for this work. The accountsshow the income and expense from thesearrangements under the headings ‘Other income’and ‘Staff costs’ respectively.An estimate of the value of partially completedpatient episodes is included in Accrued Income.This estimate has been derived by assessing thepatient episodes that span both sides of the year81

Our Finance1.5 Intangible fixed assetsIntangible assets are capitalised when they arecapable of being used in a NHS Foundation Trust’sactivities for more than one year; they can bevalued; and they have a cost of at least £5,000.Intangible fixed assets held for operational useare valued at historical cost and are depreciatedover the estimated useful economic life of theasset on a straight line basis. The carrying valueof intangible assets is reviewed for impairment atthe end of the first full year following acquisitionand in other periods if events or changes incircumstances indicate that the carrying valuemay not be recoverable.Purchased computer software licences arecapitalised as intangible fixed assets whereexpenditure of at least £5,000 is incurred; theseare amortised over the shorter of the term of thelicence and their useful economic lives.1.6 Tangible fixed assetsCapitalisationTangible assets are capitalised if they are capableof being used for a period which exceeds one yearand they:••individually have a cost of at least £5,000; or••collectively have a cost of at least£5,000, where the assets are functionallyinterdependent, they had broadlysimultaneous purchase dates, are anticipatedto have simultaneous disposal dates andare under single managerial control; or••form part of the initial setting-up cost of a newbuilding or refurbishment of a ward or unit,irrespective of their individual or collective cost.ValuationTangible fixed assets are stated at the lower ofreplacement cost and recoverable amount. Oninitial recognition they are measured at cost (forleased assets, fair value) including any costs, suchas installation, directly attributable to bringingthem into working condition. The carryingvalues of tangible fixed assets are reviewed forimpairment in periods if events or changes incircumstances indicate the carrying value maynot be recoverable.Up until 31 March 2005 the value of all individualassets was indexed to reflect current costs; thismovement was taken to the revaluation reserve.As of 1 April 2005, the Trust has decided not tocontinue to index its assets.In accordance with FRS15, all land and buildingsare revalued every five years with an interimvaluation in the third year. A land and buildingsvaluation was undertaken as at 31 March 2008,and the results of this valuation form the basisfor the land and buildings values on the balancesheet as at 31 March 2008. An interim valuationwas undertaken as at 31 March 2009 due tothe significant decline in the wider economy.This valuation forms the basis of the land andbuildings values on the balance sheet as at 31March 2009.Valuations are carried out by professionallyqualified valuers in accordance with the RoyalInstitute of Chartered Surveyors (RICS) Appraisaland Valuation Manual.The valuations are carried out primarily onthe basis of depreciated replacement cost forspecialised operational property and existing usevalue for non-specialised operational property.The value of land for existing use purposes82

is assessed at existing use value. For nonoperationalproperties including surplus land, thevaluations are carried out at open market value.Assets in the course of construction are valuedat cost and are valued by professional valuers aspart of the five-yearly or three-yearly valuation orwhen they are brought into use.Operational equipment is valued at net currentreplacement cost. Equipment surplus torequirements is valued at net recoverable amount.Depreciation, amortisation and impairmentsTangible fixed assets are depreciated at ratescalculated to write them down to estimatedresidual value on a straight-line basis overtheir estimated useful lives. No depreciation isprovided on freehold land and assets surplus torequirements.Assets in the course of construction are notdepreciated until the asset is brought into use.Buildings and dwellings are depreciatedon their current value over the estimatedremaining life of the asset as advised by theNHS Foundation Trust’s professional valuer (2-74 years). Leaseholds are depreciated over theprimary lease term.Fixed asset impairments resulting from losses ofeconomic benefits are charged to the Income andExpenditure Account. All other impairments aretaken to the Revaluation Reserve and reported in theStatement of Total Recognised Gains and Losses tothe extent that there is a balance on the RevaluationReserve in respect of that particular asset.1.7 Donated fixed assetsDonated fixed assets are capitalised at theircurrent value on receipt and this value is creditedto the Donated Asset Reserve. Donated fixedassets are valued and depreciated as describedabove for purchased assets. Gains and losses onrevaluations are also taken to the Donated AssetReserve and, each year, an amount equal to thedepreciation charge on the asset is released fromthe Donated Asset Reserve to the Income andExpenditure account. Similarly, any impairmenton donated assets charged to the Income andExpenditure Account is matched by a transferfrom the Donated Asset Reserve. On sale ofdonated assets, the net book value is transferredfrom the Donated Asset Reserve to the Incomeand Expenditure Reserve.Equipment is depreciated on cost, including historicindexation, evenly over the estimated remaininglife of the asset. These are estimated as follows:Plant and machineryTransport equipmentInformation technologyFurniture and fittings5-15 years7 years5-8 years10 years83

Our Finance1.8 Government grantsGovernment grants are grants from governmentbodies other than income from Primary CareTrusts, NHS Foundation Trusts or NHS Trustsfor the provision of services. Grants from theDepartment of Health, including those forachieving three star status, are accounted foras government grants. Where the governmentgrant is used to fund revenue expenditure it istaken to the income and expenditure account tomatch that expenditure. Where the grant is usedto fund capital expenditure the grant is held asDeferred Income and released to the Income andExpenditure Account over the life of the asset ona basis consistent with the depreciation chargefor that asset.1.9 Stocks and works-in-progressStocks and works-in-progress are valued at thelower of cost and net realisable value.1.10 Cash, bank and overdraftsCash, bank and overdraft balances are recordedat the current values of these balances in theNHS Foundation Trust’s cash book. Overdraftsare disclosed within creditors. Interest earned onbank accounts and interest charged on overdraftsis recorded as, respectively, ‘interest receivable’and ‘interest payable’ in the periods to which theyrelate. Bank charges are recorded as operatingexpenditure in the periods to which they relate.1.11 Research and DevelopmentIncome is recognised when the correspondingexpenditure is incurred, in accordance with thematching principle, as required by the conditionof the contract with the contracting party.Expenditure on research and development iscapitalised if it meets the following criteria:••there is a clearly defined project••the related expenditure is separately identifiable••the outcome of the project has beenassessed with reasonable certainty as to:-- its technical feasibility-- its resulting in a product or service whichwill eventually be brought into use••adequate resources exist, or are reasonablyexpected to be available to enable theproject to be completed and to provide anyconsequential increases in working capital.Expenditure which does not meet the criteria forcapitalisation is treated as an operating cost inthe year in which it is incurred.Fixed assets acquired for use in research anddevelopment are amortised over the life of theassociated project.1.12 ProvisionsThe NHS Foundation Trust provides for legal orconstructive obligations that are of uncertaintiming or amount at the balance sheet date, onthe basis of the best estimate of the expenditurerequired to settle the obligation.84

1.13 ContingenciesContingent assets are assets arising from pastevents whose existence will only be confirmedby one or more future events not wholly withinthe entity’s control. These are not recognisedas assets, but are disclosed in note 19 where aninflow of economic benefits is probable.Contingent liabilities are provided for wherea transfer of economic benefits is probable.Otherwise, they are not recognised, but aredisclosed in note 19 unless the probabilityof a transfer of economic benefits is remote.Contingent liabilities are defined as:••possible obligations arising from past eventswhose existence will be confirmed only by theoccurrence of one or more uncertain futureevents not wholly within the entity’s control; or••present obligations arising from past eventsbut for which it is not probable that atransfer of economic benefits will arise or forwhich the amount of the obligation cannotbe measured with sufficient reliability.1.14 Clinical negligence costsThe NHS Litigation Authority (NHSLA)operates a risk pooling scheme under whichthe NHS Foundation Trust pays an annualcontribution to the NHSLA which in return settlesall clinical negligence claims. Although the NHSLAis administratively responsible for all clinicalnegligence cases the legal liability remains withthe NHS Foundation Trust. However the NHSLAwill settle all claims in relation to these legalliabilities. The total value of clinical negligenceprovisions carried by the NHSLA on behalf of theNHS Foundation Trust is disclosed at note 15.1.15 Non-clinical risk poolingThe NHS Foundation Trust participates in theProperty Expenses Scheme and the Liabilitiesto Third Parties Scheme. Both are risk poolingschemes under which the NHS Foundation Trustpays an annual contribution to the NHS LitigationAuthority and in return receives assistancewith the costs of claims arising. The annualmembership contributions, and any excessespayable in respect of particular claims are chargedto operating expenses when the liability arises.1.16 Pension costsPast and present employees are covered by theprovisions of the NHS Pensions Scheme. Detailsof the benefits payable under these provisionscan be found on the NHS Pensions websiteat www.nhsbsa.nhs.uk/pensions. The Schemeis an unfunded, defined benefit scheme thatcovers NHS employers, General Practices andother bodies, allowed under the direction of theSecretary of State, in England and Wales. Thescheme is not designed to be run in a way thatwould enable NHS bodies to identify their shareof the underlying Scheme assets and liabilities.Therefore, the Scheme is accounted for as if itwere a defined contribution scheme: the cost tothe NHS Body of participating in the Scheme istaken as equal to the contributions payable to theScheme for the accounting period.85

Our FinanceThe Scheme is subject to a full actuarial valuationevery four years (until 2004, based on a fiveyearvaluation cycle) and a FRS17 accountingvaluation every year. An outline of these follows:a) Full actuarial (funding) valuationThe purpose of this valuation is to assess thelevel of liability in respect of the benefits dueunder the scheme (taking into account its recentdemographic experience), and to recommendthe contribution rates to be paid by employersand scheme members. The last such valuation,which determined current contribution rates wasundertaken as at 31 March 2004 and covered theperiod from 1 April 1999 to that date.The conclusion from the 2004 valuation was thatthe Scheme had accumulated a notional deficitof £3.3 billion against the notional assets as at 31March 2004. However, after taking into accountthe changes in the benefit and contributionstructure effective from 1 April 2008, the Schemeactuary reported that employer contributionscould continue at the existing rate of 14% ofpensionable pay. On advice from the Schemeactuary, scheme contributions may be varied fromtime to time to reflect changes in the scheme’sliabilities. Up to 31 March 2008, the vast majorityof employees paid contributions at the rateof 6% of pensionable pay. From 1 April 2008,employees contributions have been on a tieredscale from 5% up to 8.5% of their pensionablepay depending on total earnings.b) FRS17 accounting valuationIn accordance with FRS17, a valuation of theScheme liability is carried out annually by theScheme Actuary as at the balance sheet date byupdating the results of the full actuarial valuation.Between the full actuarial valuations at a twoyearmidpoint, a full and detailed member dataset is provided to the Scheme Actuary. At thispoint the assumptions regarding the compositionof the Scheme membership are updated to allowthe Scheme liability to be valued.The valuation of the Scheme liability as at 31March 2008, is based on detailed membershipdata as at 31 March 2006 (the latest midpoint)updated to 31 March 2008 with summary globalmember and accounting data.The latest assessment of the liabilities of theScheme is contained in the Scheme Actuaryreport, which forms part of the annual NHSPension Scheme (England and Wales) ResourceAccount, published annually. These accounts canbe viewed on the NHS Pensions website. Copiescan also be obtained from The Stationery Office.Scheme provisions as at 31 March 2008The Scheme is a “final salary” scheme. Annualpensions are normally based on 1/80th of thebest of the last three years’ pensionable payfor each year of service. A lump sum normallyequivalent to three years’ pension is payableon retirement. Annual increases are appliedto pension payments at rates defined by thePensions (Increase) Act 1971, and are based onchanges in retail prices in the 12 months ending30 September in the previous calendar year. Ondeath, a pension of 50% of the member’s pensionis normally payable to the surviving spouse.86

Early payment of a pension, with enhancement,is available to members of the Scheme whoare permanently incapable of fulfilling theirduties effectively through illness or infirmity. Adeath gratuity of twice final year’s pensionablepay for death in service, and five times theirannual pension for death after retirement, lesspension already paid, subject to a maximumamount equal to twice the member’s final year’spensionable pay less their retirement lump sumfor those who die after retirement, is payable.For early retirements other than those due to illhealth the additional pension liabilities are notfunded by the scheme. The full amount of theliability for the additional costs is charged to theincome and expenditure account at the time theTrust commits itself to the retirement, regardlessof the method of payment.The Scheme provides the opportunity tomembers to increase their benefits throughmoney purchase Additional VoluntaryContributions (AVCs) provided by an approvedpanel of life companies. Under the arrangementthe employee/member can make contributionsto enhance an employee’s pension benefits. Thebenefits payable relate directly to the value of theinvestments made.Scheme provisions from 1 April 2008From 1 April 2008 changes have been made tothe NHS Pension Scheme contribution ratesand benefits. Further details of these changescan be found on the NHS Pensions websitewww.nhsbsa.nhs.uk/pensions.1.17 Value added taxMost of the activities of theNHS Foundation Trust are outside the scope ofVAT and, in general, output tax does not applyand input tax on purchases is not recoverable.Irrecoverable VAT is charged to the relevantexpenditure category or included in thecapitalised purchase cost of fixed assets. Whereoutput tax is charged or input VAT is recoverable,the amounts are stated net of VAT.1.18 Foreign exchangeTransactions that are denominated in a foreigncurrency are translated into sterling at theexchange rate ruling on the dates of thetransactions. Resulting exchange gains and lossesare taken to the Income and Expenditure Account.1.19 LeasesWhere substantially all risks and rewards ofownership of a leased asset are borne by theNHS Foundation Trust, the asset is recorded as atangible fixed asset and a debt is recorded to thelessor of the minimum lease payments discountedby the interest rate implicit in the lease. Theinterest element of the finance lease payment ischarged to the Income and Expenditure Accountover the period of the lease at a constant rate inrelation to the balance outstanding. Other leasesare regarded as operating leases and the rentals arecharged to the Income and Expenditure Accounton a straight-line basis over the term of the lease.87

Our Finance1.20 Public dividend capitalPublic dividend capital (PDC) is a public sectorequity finance based on the excess of assetsover liabilities, i.e. the net assets of a publicbenefit corporation.A charge, reflecting the forecast cost of capitalutilised by the NHS Foundation Trust, is paid overas public dividend capital dividend. The chargeis calculated at the real rate set by HM Treasury(currently 3.5%) on the average relevant netassets of the NHS Foundation Trust. Relevant netassets are calculated as the value of all assetsless the value of all liabilities, except for donatedassets and cash held with the Office of thePaymaster General. Average relevant net assetsare calculated as a simple mean of opening andclosing relevant net assets.1.21 Corporation taxThe NHS Foundation Trust has determinedthat there is no corporation tax liability due for2008/09.1.22 Financial instrumentsFinancial instruments are defined as contractsthat give rise to a financial asset of one entityand a financial liability or equity instrument ofanother entity. The Trust will commonly havethe following financial assets and liabilities: tradedebtors (but not prepayments), current assetinvestments, cash at bank and in hand, tradecreditors (but not deferred income), finance leaseobligations, loans, provisions.RecognitionFinancial assets and financial liabilities which arisefrom contracts for the purchase or sale of nonfinancialitems (such as goods or services), whichare entered into in accordance with the Trust’snormal purchase, sale or usage requirements,are recognised when, and to the extent which,performance occurs, i.e. when receipt or deliveryof the goods or services is made.Financial assets or financial liabilities in respectof assets acquired or disposed of throughfinance leases are recognised and measured inaccordance with the accounting policy for leasesdescribed above.Regular way purchases or sales are recognised andde-recognised, as applicable, using the trade date.All other financial assets and financial liabilitiesare recognised when the Trust becomes a party tothe contractual provisions of the instrument.De-recognitionAll financial assets are de-recognised when therights to receive cash flows from the assets haveexpired or the Trust has transferred substantiallyall of the risk and rewards of ownership.Financial liabilities are de-recognised when theobligation is discharged, cancelled or expires.Classification and measurementFinancial assets are classified into the followingspecified categories:••financial assets ‘at fair value throughIncome and Expenditure’••‘loans and receivables’••‘available-for-sale’ financial assets88

••‘held-to-maturity’ investments.Financial liabilities are classified as either:••financial liabilities ‘at fair value through Incomeand Expenditure’••‘other financial liabilities’.Financial assets and financial liabilities at ‘fairvalue through income and expenditure’Financial assets and financial liabilities at ‘fairvalue through income and expenditure’ arefinancial assets or financial liabilities held fortrading. A financial asset or financial liability isclassified in this category if acquired principallyfor the purpose of selling in the short-term.Derivatives are also categorised as held for tradingunless they are designated as hedges. Derivativeswhich are embedded in other contracts butwhich are not ‘closely related’ to those contractsare separated-out from those contracts andmeasured in this category. Assets and liabilities inthis category are classified as current assets andcurrent liabilities.These financial assets and financial liabilities arerecognised initially at fair value, with transactioncosts expensed in the income and expenditureaccount. Subsequent movements in the fair valueare recognised as gains or losses in the incomeand expenditure account.Loans and receivablesLoans and receivables are non-derivative financialassets with fixed or determinable paymentswhich are not quoted in an active market. Theyare included in current assets.The Trust’s loans and receivables comprise: cash atbank and in hand, NHS debtors, accrued incomeand ‘other debtors’.Loans and receivables are recognised initiallyat fair value, net of transactions costs, and aremeasured subsequently at amortised cost, usingthe effective interest method. The effectiveinterest rate is the rate that discounts exactlyestimated future cash receipts through theexpected life of the financial asset or, whenappropriate, a shorter period, to the net carryingamount of the financial asset.Interest on loans and receivables is calculatedusing the effective interest method and creditedto the income and expenditure account, exceptfor short-term receivables when the recognitionof interest would be immaterial.Other financial liabilitiesAll ‘other’ financial liabilities are recognisedinitially at fair value, net of transaction costsincurred, and measured subsequently atamortised cost using the effective interestmethod. The effective interest rate is the rate thatdiscounts exactly estimated future cash paymentsthrough the expected life of the financial liabilityor, when appropriate, a shorter period, to the netcarrying amount of the financial liability.They are included in current liabilities except foramounts payable more than 12 months after thebalance sheet date, which are classified as longtermliabilities.Interest on financial liabilities carried atamortised cost is calculated using the effectiveinterest method and charged to the income andexpenditure account.89

Our FinanceImpairment of financial assetsAt the balance sheet date, the Trust assesseswhether any financial assets, other thanthose held at ‘fair value through income andexpenditure’ is impaired. Financial assets areimpaired and impairment losses are recognisedif, and only if, there is objective evidence ofimpairment as a result of one or more eventswhich occurred after the initial recognition of theasset and which has an impact on the estimatedfuture cash flows of the asset.For financial assets carried at amortised cost,the amount of the impairment loss is measuredas the difference between the asset’s carryingamount and the present value of the revisedfuture cash flows discounted at the asset’soriginal effective interest rate. The loss isrecognised in the income and expenditureaccount and the carrying amount of the assetis reduced through the use of an allowanceaccount/bad debt provision.2. Segmental analysisThe following information segments the results of the NHS Foundation Trust by:••host organisation for the South West London Cancer Research Network (SWLCRN) activities, and••healthcare activities, being all the other activities of the NHS Foundation TrustHealthcare SWLCRN Activity Total2008/09 2007/08 2008/09 2007/08 2008/09 2007/08£000 £000 £000 £000 £000 £000Income 198,833 179,133 692 539 199,525 179,672Surplus before interest and dividend 7,440 16,664 12 -. 7,452 16,6643. Income From activities3.1 Analysis of income from activities by source2008/09 2007/08£000 £000Mandatory healthcare:Primary Care Trusts 94,424 81,954Department of Health 10,039 9,660Other NHS 3,669 3,799108,132 95,413Non - mandatory healthcare:Private patients 43,171 38,147151,303 133,560The above analysis classifies income from activities arising into mandatory and non-mandatoryservices as set out in the NHS Foundation Trust’s Terms of Authorisation.90

Income received from the Department of Health was received directly in 2008/09.3.2 Analysis of income from activities by type:2008/09 2007/08£000 £000Elective income 26,635 22,423Non-elective income 13,400 14,530Outpatient income 17,855 17,948Other types of activity income 50,242 40,391Transitional relief - 121Private patient income 43,171 38,147151,303 133,5603.3 Private patient income:Base year2002/03 2008/09 2007/08£000 £000 £000Private patient income 21,019 43,171 38,147Total patient related income 68,493 151,303 133,560Proportion (as percentage) 30.7% 28.5% 28.6%Section 44 of the 2006 Act requires that the proportion of private patient income to the total patientrelated income of the NHS Foundation Trust should not exceed its proportion whilst the body was anNHS Trust in 2002/03 (base year).4. Other operating income2008/09 2007/08£000 £000Research and development 18,417 19,288Education and training 5,111 4,188Charitable and other contributions to expenditure 8,773 6,655Transfers from donated asset reserve 2,715 2,616Non-patient care services to other bodies 1,674 1,994Services provided to associated Hospital Charities 1,673 2,032Other income includes:Salaries and wages recharged to other organisations 4,514 4,886Rents 636 778Other 4,709 3,67548,222 46,11291

Our Finance5. Operating expenses5.1 Operating expenses comprise:2008/09 2007/08£000 £000Staff costs 110,676 102,960Executive Directors’ costs 876 765Non-Executive Directors’ costs 104 103Drug costs 31,559 27,102Supplies and services - clinical 21,100 17,681Supplies and services - general 3,876 3,581Establishment 2,036 1,947Transport 1,710 1,668Premises 7,211 6,352Bad debts 952 275Depreciation and amortisation 7,202 6,660Audit services - statutory audit 62 63Audit services - other - 18Clinical negligence 506 472Other services from NHS Foundation Trusts 137 118Other services from NHS Trusts 78 76Other services from other NHS bodies 108 117Other operating expenses 4,148 2,886192,341 172,8445.2 Operating leases5.2/1 Operating lease rentals include2008/09 2007/08£000 £000Plant and machinery 783 298Buildings 468 4531,251 7515.2/2 Operating lease commitments2008/09 2007/08£000 £000Annual commitments on leases expiring:Between one and five years: Buildings 180 72Other 69 13In more than five years: Buildings 273 384Other 0 0522 46992

5.3 Salary and pension entitlements of senior managersRealincrease inpension atage 60Total accruedpension atage 60 at 31March 2009Cashequivalenttransfervalue at31 March2009Real increasein cashequivalenttransfervalue2008/09 SalaryOtherremuneration(bands of (bands of (bands of (bands ofName and title£5,000) £5,000) £2,500) £2,500)£000 £000 £000 £000 £000 £000Mrs T. GreenCBEMr C. ClarkRev Dame S.MullallyProf. P. RigbySir J. CravenMr R. TurnorMr G. AndrewsMiss C. PalmerCBEMr A.GoldsmanChairman 35 - 40 - - - - -Non ExecutiveDirectorNon ExecutiveDirectorNon ExecutiveDirectorNon ExecutiveDirectorNon ExecutiveDirectorNon ExecutiveDirector10 - 15 - - - - -10 - 15 - - - - -10 - 15 - - - - -10 - 15 - - - - -1 - 5 - - - - -10 - 15 - - - - -Chief Executive 205 - 210 - 2.5 - 5 60 – 62.5 1,236 225Director ofFinance130 - 135 - 0 - 2.5 15 – 17.5 333 69Prof. M. Gore Medical Director 10 - 15 145 - 150 0 - 2.5 60 – 62.5 1,496 281Miss S. Dolan Chief Nurse 95 - 100 - - 22.5 – 25 475 72Mr D. ProbertChief OperatingOfficer100 - 105 - 0 - 2.5 10 – 12.5 138 2293

Our Finance5.3 Salary and pension entitlements of senior managers (continued)Realincrease inpension atage 60Total accruedpension atage 60 at 31March 2008Cashequivalenttransfervalue at31 March2008Real increasein cashequivalenttransfervalue2007/08 SalaryOtherremuneration(bands of (bands of (bands of (bands ofName and title£5,000) £5,000) £2,500) £2,500)£000 £000 £000 £000 £000 £000Mrs T. GreenCBEMr J. Burke QCMr C. ClarkMr M. KhoslaRev Dame S.MullallyProf. P. RigbyMiss C. PalmerCBEProf. D. Weir-HughesMr A.GoldsmanChairman 35 – 40 - - - - -Non ExecutiveDirectorNon ExecutiveDirectorNon ExecutiveDirectorNon ExecutiveDirectorNon ExecutiveDirector10 – 15 - - - - -10 – 15 - - - - -10 – 15 - - - - -10 – 15 - - - - -10 – 15 - - - - -Chief Executive 195 – 200 - 7.5 – 10 55 – 60 892 114Deputy ChiefExecutive &Chief NurseDirector ofFinance*25 – 30 - 2.5 – 5 15 – 20 233 40125 – 130 - 2.5 – 5 15 – 20 228 39Prof. M. Gore Medical Director 10 – 15 145 – 150 2.5 – 5 55 – 60 1,068 52Miss S. Dolan Chief Nurse *60 – 65 - 2.5 – 5 20 – 25 364 41Mr D. ProbertChief OperatingOfficer*40 – 45 - 0 – 2.5 10 – 15 103 4* Part year on commencement of employment.6. Accounting for the fireat the Chelsea siteThis note summarises the accounting impactof the fire at the Chelsea site on 2 January2008. This has been presented in the accountsin accordance with FRS 3 – Reporting FinancialPerformance and FRS15 – Tangible Fixed Assets.6.1 Income and expenditureIncreased cost of working income has beenincluded under the heading ‘Income from activities’on the Income and Expenditure account. Increasedcost of working expenditure has been includedunder the heading ‘Operating Expenses’ on theIncome and Expenditure account.An accounting gain on the destruction of fixedassets of £450,000 has been recorded in theIncome and Expenditure account; this relates tothe buildings and contents damaged by the fire.94

2008/09 2008/09 2008/09 2007/08 2007/08 2007/08Increased costof workingBuildings andcontentsTotalIncreased costof workingBuildings andcontents£’000 £’000 £’000 £’000 £’000 £0Income 1,265 902 2,167 1,098 13,527 14,625Expenditure (1,265) (452) (1,717) (1,098) (3,691) (4,789)Net impact 0 450 450 - 9,836 9,836Total7 Staff costs and numbers7.1 Staff costs2008/09 2007/08£000 £000Salaries and wages 85,967 84,121Social security costs 7,425 7,134Employer contributions to NHS Pensions Agency 9,770 9,077Agency staff 8,494 3,393111,656 103,7257.2 Average number of persons employedPermanentlyemployedTemporaryand contractstaff2008/09Total2007/08TotalNumber Number Number NumberMedical and dental 289 - 289 296Administration and estates 563 - 563 590Healthcare assistants and other support staff 97 - 97 96Nursing, midwifery and health visiting staff 638 - 638 644Scientific, therapeutic and technical staff 108 - 108 118Bank and agency staff - 333 333 191Other 464 - 464 402Total 2,159 333 2,492 2,337The table above shows the average number of full time equivalent employees who worked for theNHS Foundation Trust during the year.95

Our Finance7.3 Retirements due to ill healthDuring 2008/09 there was one (2007/08 two) earlyretirements from the NHS Foundation Trust agreedon the grounds of ill health. The estimated additionalpension liability of this ill health retirement will be£0 (2007/08 £88,000). The cost of this ill healthretirement will be borne by the NHS Pensions Agency.During 2008/09 there was one (2007/08 two)early retirements from the NHS Foundation Trustagreed on the grounds of ill health. The estimatedadditional pension liability of this ill healthretirement will be £0 (2007/08 £88,000). The costof this ill health retirement will be borne by theNHS Pensions Agency.8. Loss on disposal of fixed assetsLoss on the disposal of fixed assets is made up as follows:2008/09 2007/08£000 £000Loss on disposal of plant and equipment (182) -(182) -9. Net financing income2008/09 2007/08£000 £000Interest receivable 1,729 1,9131,729 1,91310. Intangible fixed assetsSoftwareLicencesCost at 1 April 2008 153Additions 27Gross cost at 31 March 2009 180Accumulated depreciation at 1 April 2008 62Provided during the year 20Accumulated amortisation at 31 March 2009 82Net book value:- Purchased at 1 April 2008 91- Donated at 1 April 2008 -Total at 1 April 2008 91- Purchased at 31 March 2009 98- Donated at 31 March 2009Total at 31 March 2009 98£00096

11. Tangible fixed assets11.1 Tangible fixed assets at the balance sheet date comprise the following elements:LandBuildingsexcludingdwellingsAssetsunder constructionPlant &MachineryTransportEquipment TechnologyInformationFurniture& fittings£000 £000 £000 £000 £000 £000 £000 £000Cost or valuationat 1 April 2008 33,219 70,797 13,341 41,679 112 7,063 983 167,194Additions - purchased - - 15,195 - - - - 15,195Additions - donated/government granted - - 10,233 - - - - 10,233Reclassifications - 6,108 (11,016) 4,116 30 629 106 (27)Revaluation (6,707) 561 - - - - - (6,146)Disposals - - - (550) - - - (550)At 31 March 2009 26,512 77,466 27,753 45,245 142 7,692 1,089 185,899Accumulateddepreciation at1 April 2008 - (20) - 13,837 58 4,700 518 19,093Provided duringthe year - 2,953 - 3,434 11 744 40 7,182Revaluation - (2,922) - - - - - (2,922)Reclassification - - - 30 - (30) - -Disposal - - - (367) - - - (367)Accumulateddepreciation at31 March 2009 - 11 - 16,934 69 5,414 558 22,986Net book value- Purchased at31 March 2008 33,219 52,078 4,707 16,798 - 2,344 423 109,569- Donated at 31March 2008 - 18,739 8,634 11,044 54 19 42 38,532Total at 31March 2008 33,219 70,817 13,341 27,842 54 2,363 465 148,101- Purchased at31 March 2009 26,512 53,447 16,378 17,070 28 2,166 227 115,828- Donated at 31March 2009 0 24,008 11,375 11,241 45 112 304 47,085Total at 31March 2009 26,512 77,455 27,753 28,311 73 2,278 531 162,913Total97

Our Finance11.2 Analysis of tangible fixed assets:LandBuildingsexcludingdwellingsAssetsunder constructionPlant &machineryTransportequipment technologyInformationFurniture& fittingsTotal£000 £000 £000 £000 £000 £000 £000 £000Net bookvalue- Protectedassets at 31March 2009 26,512 71,211 - - - - - 97,723- Unprotectedassets at 31March 2009 - 6,244 27,754 28,310 73 2,278 531 65,190Total at 31March 2009 26,512 77,455 27,754 28,310 73 2,278 531 162,913Protected land and buildings are assets required for the provision of mandatory healthcare services.11.3 Net book value of assets held under finance leases and hire purchase contracts at thebalance sheet date2008/09 2007/08£000 £000Land - -- -11.4 The net book value of land, buildings and dwellings comprises:2008/09 2007/08£000 £000Freehold 103,967 104,036103,967 104,03612. Stocks and works-in-progress2008/09 2007/08£000 £000Stock 3,103 2,7733,103 2,77398

13. Debtors13.1 Amounts falling due within one year2008/09 2007/08£000 £000NHS trade debtors 6,779 4,083Other debtors 18,852 12,067Prepayments and accrued income 13,444 15,536Provision for irrecoverable debts (5,287) (4,339)33,788 27,34713.2 Provision for impairment of debtors2008/09 2007/08£000 £000At 1 April 4,339 3,961Increase in provision 914 347Amounts utilised 34 31At 31 March 5,287 4,33913.3 Ageing of debtors2008/09 2007/08£000 £000Ageing of impaired debtors:Up to three months 3,304 2,375In three to six months 676 1,038Over six months 1,307 9265,287 4,339Ageing of non-impaired debtors past their due date:Up to three months 18,431 11,504In three to six months 1,913 307Over six months - -20,344 11,81199

Our Finance14. Creditors14.1 Creditors at the balance sheet date are made up of:Amounts falling due within one year:2008/09 2007/08£000 £000NHS creditors 1,351 1,795Tax and social security costs 2,497 2,308Other creditors 13,904 7,877Accruals and deferred income 37,194 33,46254,946 45,442Amounts falling due after more than one year:Obligations under finance leases and hire purchase contracts - -54,946 45,44214.2 Finance lease obligations:2008/09 2007/08£000 £000Expiring:After five years - -- -15. Provisions for liabilities and chargesPensionsrelating toother staffAgendafor Change Other Total£000 £000 £000 £000At 1 April 2008 65 1,733 210 2,008Charged to I&E during the year - - - -Utilised during the year (8) (494) - (502)Released to I&E during the year (16) (908) (110) (1,034)At 31 March 2009 41 331 100 472Expected timing of cash flows:Within one year - 331 100 431Between one and five years 41 - - 41Over 5 years - - - -41 331 100 472£4,167,424 is included in the provisions of the NHS Litigation Authority at 31 March 2009 in respect ofclinical negligence liabilities of the NHS Foundation Trust (31 March 2008 £4,295,000).100

PensionsProvision for the pre-1995 pension related costson early retirements have been accounted for bythe NHS Foundation Trust.Department of Health model, based on theexperiences of early implementers of Agenda forChange. In 2008/09 the remaining provision hasbeen provided in line with the actual costs by theNHS Foundation Trust.Agenda for ChangeOtherThe NHS Foundation Trust’s provision for costsof implementing the Agenda for Change payreforms was estimated in 2004/05 using aThis provision is in respect of estimated loss ofincome and associated expenditure relating to asingle legal claim.16. Movements on reservesMovements on reserves in the year comprised the following:RevaluationreserveDonatedassetreserveOtherreservesIncome andExpenditurereserveTotal£000 £000 £000 £000 £000At 1 April 2008 24,394 38,532 - 29,994 92,920Transfer from the Income and Expenditure account - - - 5,701 5,701Revaluations and disposal of fixed assets (4,254) 1,029 - - (3,225)Impairment of fixed assets - - - - -Receipt of donated assets - 10,236 - - 10,236Transfers to the Income and Expenditureaccount for depreciation - (2,715) - - (2,715)Movements on other reserves - - - - -At 31 March 2009 20,140 47,082 - 35,695 102,917101

Our Finance17. Notes to the cash flow statement17.1 Reconciliation of operating surplus to net cash flow from operating activities2008/09 2007/08£000 £000Total operating surplus 7,184 6,828Depreciation and amortisation charge 7,202 6,660Transfer from donated asset reserve (2,715) (2,616)(Increase)/Decrease in stocks (330) (389)Increase in debtors (6,441) (13,847)Increase in creditors 9,504 20,042Increase/(Decrease) in provisions (1,536) (2,882)Net cash inflow from operating activities 12,868 13,796Surplus from fire excluding destruction of fixed assets 450 12,775Net cash inflow from activities 13,318 26,57117.2 Reconciliation of net cash flow to movement in net funds2008/09 2007/08£000 £000(Decrease)/Increase in cash in the period (3,125) 18,543Increase in non-cash balances in the period - 500Net funds at 1 April 47,411 28,368Net funds at 31 March 44,286 47,41117.3 Analysis of changes in net funds/(debt)At 31March2009Non-Cashchangesin yearCashchangesin yearAt 1 April2008£000 £000 £000 £000OPG cash at bank 43,149 - (880) 44,029Commercial cash at bank and in hand 1,137 - (2,245) 3,38244,286 - (3,125) 47,411Finance leases - - - -44,286 - (3,125) 47,41118. Capital commitmentsCommitments under capital expenditure contracts at the balance sheet date were £9,793,000 (2007/08£5,064,000). A further £16,105,000 (2007/08 £2,667,000) capital expenditure is committed to befunded by The Royal Marsden Hospital Charity and The Royal Marsden Cancer Campaign.102

19. ContingenciesThere are no contingent liabilities at balance sheet date.20. Movements in taxpayers’ equity2008/09 2007/08£000 £000Taxpayers’ equity at 1 April 2008 178,273 179,244Surplus for the financial year 9,181 18,577Public dividend capital dividends (3,480) (3,630)New public dividend capital received 500 7,108Movement in donated asset reserve 8,550 (4,763)Movement in revaluation reserve on reclassification of fixed assets (4,254) (18,263)Net addition to equity 10,497 (971)Taxpayers’ equity at 31 March 2009 188,770 178,27321. Financial performance targets21.1 Public capital dividendThe NHS Foundation Trust is required to pay anannual dividend of 3.5% of its forecast averagerelevant net assets. The actual dividend rate is thedividend paid figure in the cash flow statement,£3,480,000 (2007/08 £3,630,000), divided bythe average of relevant opening and closing netassets, £98,539,000 (2007/08 £95,711,000),expressed as a percentage. This gives an actualdividend rate for 2008/09 of 3.6% (2007/083.4%).21.2 Losses and special paymentsThere were 456 cases of losses and specialpayments (2007/08 301) totalling £39,018(2007/08 £51,303) approved during 2008/09.These payments are the cash payments made inthe year and are not calculated on an accrualsbasis.There were no clinical negligence, fraud, personalinjury, compensation under legal obligation andfruitless payment cases where the net paymentexceeded £100,000 (2007/08 nil).21.3 Prudential borrowing limitThe NHS Foundation Trust is required to complyand remain within the Prudential borrowing limitset by Monitor. This is made up of two elements:1. The maximum cumulative amount of longterm borrowing. This is set by reference to thefive ratio tests set out in Monitor’s PrudentialBorrowing Code. The financial risk rating setunder Monitor’s Compliance Frameworkdetermines one of the ratios and thereforecan impact on the long-term borrowing limit.103

Our Finance1.The amount of any working capital facility approved by Monitor.2008/09 2007/08£000 £000Maximum cumulative long term borrowing 41,100 39,600Working capital facility 14,700 14,700Prudential borrowing limit set by Monitor 55,800 54,300Actual borrowing in year - -The NHS Foundation Trust’s dividend cover ratiofor the year was 4.6 compared to a minimumdividend cover ratio required of 1 (3.9 for the yearended 31 March 2008).22. Related party transactionsThe Royal Marsden NHS Foundation Trust isa body corporate established by order of theSecretary of State for Health.During the year none of the Board Membersor members of the senior managementteam or parties related to them hasundertaken any material transactions with theNHS Foundation Trust.The Department of Health is regarded as a relatedparty. During the year the NHS Foundation Trusthas had a significant number of materialtransactions with the Department, and with otherentities for which the Department is regarded asthe parent Department. These entities are listedbelow:••NHS Pensions Agency••National Blood ServiceIn addition, the NHS Foundation Trust has hada number of material transactions with otherGovernment Departments and other central andlocal Government bodies. These include transactionswith the Royal Borough of Kensington and Chelseaand the London Borough of Sutton relating tobusiness rates.The NHS Foundation Trust has received revenueand capital payments from The Royal MarsdenHospital Charity, whose Trustees are alsomembers of the NHS Foundation Trust Board.The NHS Foundation Trust has also receivedgrants from The Royal Marsden Cancer Campaign;certain of the Trustees for which are alsomembers of the NHS Foundation Trust Board.••NHS Primary Care Trusts••NHS Foundation Trusts••NHS London••NHS Trusts••NHS Litigation Authority••NHS Supply Chain104

23. Financial instrumentsFRS 25 (Financial Instruments: Disclosure andPresentation) and FRS 29 (Financial Instruments:Disclosures), require disclosure of the role thatfinancial instruments have had during the periodin creating or changing the risks an entity faces inundertaking its activities. The Trust does not haveany complex financial instruments and does nothold or issue financial instruments for speculativetrading purposes. Because of the continuingservice provider relationship the Trust has withPrimary Care Trusts and the way those PrimaryCare Trusts are financed, the Trust is not exposedto the degree of financial risk faced by businessentities.Also financial instruments play a much morelimited role in creating or changing risk thanwould be typical of the listed companies to whichFRS 25 mainly applies. The Trust has limitedpowers to borrow or invest surplus funds andfinancial assets and liabilities are generated byday-to-day operational activities rather thanbeing held to change the risks facing the Trust inundertaking its activities.The Finance and Investment Committee managesthe Trust’s funding requirements and financialrisks in line with the Board approved treasurypolicies and procedures, and their delegatedauthorities.The Trust’s financial instruments comprise loans,finance lease obligations, provisions, cash at bankand in hand and various items, such as tradedebtors and trade creditors, that arise directlyfrom its operations. The main purpose of thesefinancial instruments is to raise finance for theTrust’s operations.23.1 Categories of financial instruments31 March200931 March2008£000 £000Financial assets:Loans and receivables (including cash) 77,385 74,162Assets at fair value through the I&E - -Held to maturity investments - -77,385 74,162Financial liabilities:Other financial liabilities (amortised cost) 29,580 30,479Liabilities at fair value through the I&E - -29,580 30,479105

Our Finance23.2 Fair valuesBookvalueFair value£000 £000Financial assets:Held to maturity investments - -Financial liabilities:Finance leases - -Provisions under contract 472 472Loans - -472 472As allowed by FRS 25, short-term trade debtors and creditors measured at amortised cost may beexcluded from the above disclosure as their book values reasonably approximate their fair values.23.3 Liquidity and interest risk tablesFinancial assets:Weightedave. interestrateLess than1 year 1-2 years 2-5 yearsMorethan 5yearsTotal% £000 £000 £000 £000 £000Non-interest bearing 33,099 - - - 33,099Fixed interest rate instrument - - - - -Variable interest rate instrument 0.25 44,286 - - - 44,286Gross financial assets at 31 March 2009 77,385 - - - 77,385Non-interest bearing 26,751 - - - 26,751Fixed interest rate instrument - - - - -Variable interest rate instrument 4.97 47,411 - - - 47,411Gross financial assets at 31 March 2008 74,162 - - - 74,16223.4 Interest-rate riskNone of the Trust’s financial assets and all ofits financial liabilities carry nil or fixed ratesof interest. The NHS Foundation Trust is not,therefore, exposed to significant interest-rate risk.23.5 Liquidity riskprovides a reliable source of funding streamwhich significantly reduces the Trust’s exposureto liquidity risk. The Trust also manages liquidityrisk by maintaining banking facilities and loanfacilities to meet its short-term and longtermcapital requirements through continuousmonitoring of forecast and actual cash flows.The Trust’s net operating costs are mainlyincurred under legally binding contracts withPrimary Care Trusts, which are financed fromresources voted annually by Parliament. This106

23.6 Credit riskCredit risk exists where the Trust can sufferfinancial loss through default of contractualobligations by a customer or counterparty.Trade debtors consist of high-value transactionswith Primary Care Trusts under contractualterms that require settlement of obligationwithin a time frame established generallyby the Department of Health. Other tradedebtors include private and overseas patientsspread across diverse geographical areas. Creditevaluation is performed on the financial conditionof accounts receivable and, where appropriate,sufficient prepayment is required to mitigate therisk of financial loss.Credit risk exposures of monetary financial assetsare managed through the Trust’s treasury policywhich limits the value that can be placed witheach approved counterparty to minimise therisk of loss. The counterparties are limited to theapproved financial institutions with high creditratings. Limits are reviewed regularly by seniormanagement.24. Third-party assetsThe NHS Foundation Trust held nil cash at bankand negligible cash in hand at 31 March 2009 (nil– 2007/08) which relates to monies held by theNHS Foundation Trust on behalf of patients.25. Post balance sheet eventsThere have been no material post balance sheetevents.107

The Royal Marsden NHS Foundation TrustChelsea:Fulham Road, London SW3 6JJ.T 020 7352 8171Sutton:Downs Road, Sutton, Surrey SM2 5PT.T 020 8642 6011Kingston:Galsworthy Road, Kingston upon Thames, Surrey KT2 7QB.T 020 8973 5030www.royalmarsden.nhs.ukPatron: Her Majesty The QueenPresident: HRH Prince William of WalesThe Royal MarsdenNHS Foundation Trust