Item 5 - Unaudited Accounts
North Lanarkshire Council · 22 June 2022
Back to Health and Social Care Integration Joint Board — 22 June 2022 and its agenda
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Page | 1 REPORT Item No: 5 SUBJECT: Unaudited Annual Accounts 2021/2022 TO: Integration Joint Board Lead Officer for Report: Ross McGuffie Chief Officer Author(s) of Report Nicola Lynch Business Finance Manager, NLC Fiona Porter Deputy Director Finance, NHSL DATE: 22nd June 2022 1. PURPOSE OF REPORT 1.1 This paper is coming to the Integration Joint Board (IJB) for: For approval For endorsement To note 1.2 This report provides an overview of the unaudited IJB Annual Accounts for the financial year 2021/2022 in line with the legislative requirements. 2. ROUTE TO THE INTEGRATION JOINT BOARD: 2.1 This paper has been: Prepared By; Business Finance Manager, NLC Deputy Director Finance, NHSL Reviewed By; Chief Officer 3. RECOMMENDATIONS 3.1 The IJB is asked to agree the following recommendations: (1) that the Annual Governance Statement and the continuous improvement actions included in the IJB Annual Accounts for 2021/2022 are endorsed; (2) that the unaudited IJB Annual Accounts for 2021/2022, as appended to this report, be noted; (3) that the arrangements for publication of the IJB Annual Accounts for 2021/2022 in line with the legislative requirements be noted; and (4) that authority is delegated to the Acting Chief Financial Officer to amend the IJB Annual Accounts for 2021/2022 before the publication date of 30 June 2022 to reflect feedback from the IJB.
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Page | 2 4. VARIATIONS TO DIRECTIONS 5. BACKGROUND/SUMMARY OF KEY ISSUES 5.1 The Public Bodies (Joint Working) (Scotland) Act 2014 was passed by the Scottish Parliament on 25 February 2014 and received Royal Assent in April 2014. The IJB is a legal entity in its own right, created by Parliamentary Order, following Ministerial approval of the Integration Scheme. 5. BACKGROUND/SUMMARY OF KEY ISSUES (CONT.) 5.2 NHS Lanarkshire and North Lanarkshire Council have delegated functions to the IJB which has the responsibility for strategic planning, resourcing and ensuring delivery of all integrated services. 5.3 The IJB is specified in legislation as a “section 106” body under the terms of the Local Government Scotland Act 1973. It is therefore expected to prepare Annual Accounts in compliance with the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/2017 (the “Code of Practice”) and the International Financial Reporting Standard (IFRS). 6. CONCLUSIONS 6.1 This report provides the unaudited IJB Annual Accounts for the financial year 2020/2021 in line with the legislative requirements. 7. IJB ANNUAL ACCOUNTS 2021/2022 7.1 The unaudited IJB Annual Accounts 2021/2022 are attached as an appendix. The Annual Accounts have been prepared in line with proper accounting practice but remain subject to audit by Audit Scotland. 7.2 As prescribed by the Local Authority Accounts (Scotland) Regulations 2014 and in line with the previous year, the unaudited Annual Accounts will be available for public inspection in the Council Offices for a three week period from Friday 1 July 2022 until Friday 22 July 2022 inclusive. The Regulations also require publication of the Annual Accounts on the IJB’s website. The unaudited Annual Accounts are therefore available online from 1 July 2022 until the date the audited Annual Accounts are published. 7.3 Under normal circumstances, the IJB Annual Accounts 2021/2022 should be published by 31 October 2022 and any further reports by External Auditor by 31 December 2022. The Independent Auditor’s Report and the External Audit Annual Report will be available by 26 October 2022. Following completion of the external audit and having taken into consideration any findings reported by Audit Scotland, the audited IJB Annual Accounts 2021/2022 will be submitted to the IJB (Performance, Finance and Audit) Committee for approval in November 2022. The IJB Annual Accounts 2021/2022 will thereafter be available in both hard copy and on the website for at least five years, together with any further reports provided by the External Auditor that relates to the audited accounts. Yes No N/A
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Page | 3 7.4 The Acting Chief Financial Officer, supported by the Director of Finance of NHS Lanarkshire and the Head of Financial Solutions for North Lanarkshire Council, is following the Audit Scotland and LASAAC guidance and will make any further changes necessary in order to ensure compliance with best practice before publication. The IJB is asked to delegate authority to the Acting Chief Financial Officer to amend the IJB Annual Accounts for 2021/2022 before the publication date of 30 June 2022 to reflect feedback from the IJB. 8. IMPLICATIONS 8.1 NATIONAL OUTCOMES This report relates to all national outcomes as effective governance arrangements will ensure that the IJB can fulfil its statutory duties. 8.2 ASSOCIATED MEASURE(S) None. 8. IMPLICATIONS (CONT.) 8.3 FINANCIAL 8.3.1 This paper has been reviewed by Finance: Yes No N/A 8.3.2 The main risk associated with the IJB is that one or both partners could overspend. The risk has been closely managed by each partner during the financial year under review. The budget monitoring arrangements in place ensured that corrective action could be taken including the use of the contingency reserve as appropriate to address increases in demand for health and social care services. 8.3.3 The Director of Finance of NHS Lanarkshire and the Head of Financial Solutions for North Lanarkshire Council were both consulted on the content of this report. 8.4 PEOPLE None 8.5 STAKEHOLDER ENGAGEMENT There has been consultation between the Chief Financial Officer and the External Auditor in respect of the External Audit Plan and the requirements to support the external audit within the agreed timeline. 8.6 INEQUALITIES & FAIRER SCOTLAND DUTY EQIA Completed & Fairer Scotland Impact Assessment Form Completed: Yes No N/A
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Page | 4 8.7 CARBON MANAGEMENT IMPLICATIONS Yes No N/A 9. BACKGROUND PAPERS None 10. APPENDICES Appendix 1: North Lanarkshire Integration Joint Board Annual Account 2021/2022 ............................................................................. CHIEF OFFICER (or Depute) Members seeking further information about any aspect of this report, please contact Ross McGuffie on telephone number 01698 752 591.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 5 NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS UNAUDITED 2021/2022
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 6 CONTENTS Management Commentary Page 3 Statement of Responsibilities 14 Remuneration Report 15 Annual Governance Statement 18 Comprehensive Income and Expenditure Statement 29 Movement in Reserves Statement 30 Balance Sheet 31 Notes to the Financial Statements 32 Audit Arrangements 44
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 7 MANAGEMENT COMMENTARY Introduction The North Lanarkshire Integration Joint Board (IJB), which was established as a body corporate by order of Scottish Ministers under the Public Bodies (Joint Working) (Scotland) Act 2014, became operational in June 2015 with integrated delivery of health and social care services commencing on 1 April 2016. The functions delegated by North Lanarkshire Council (NLC) and NHS Lanarkshire (NHSL) to the IJB are detailed in the Integration Scheme. The North Lanarkshire Health and Social Care Partnership (HSCP) refers to the joint working arrangements between the partners NLC and NHSL. The IJB is a separate legal entity which is responsible for the strategic planning and commissioning of the wide range of health and social care services across North Lanarkshire. The partnership is responsible for the operational delivery of the IJB’s strategic directions. The purpose of the IJB is to improve the wellbeing of people who use health and social care services and their carers’ and to deliver on the nine national health and wellbeing outcomes. There are multifaceted factors which impact on the demand for health and social care services across North Lanarkshire which is the fourth largest and fifth most densely populated area in Scotland with a population of 341,140. The increase in the age group of people 65 years and over is projected to be 20.2% by 2028 and 39.6% by 2043. 110,563 residents live in the worst 20% datazones and it is estimated that 36% of North Lanarkshire residents have a limiting long-term illness. This management commentary provides an overview of the key outcomes relating to the objectives and strategy of the IJB. It considers our financial performance for the year ended 31st March 2022 and provides an indication of the issues and risks which may impact upon our finances in the future. The Role and Remit of the IJB The IJB has responsibility for the strategic planning and commissioning of the following services: accident and emergency services provided in a hospital; inpatient services related to general medicine, geriatric medicine, rehabilitation medicine, respiratory medicine and palliative care services in a hospital; community health services including Lanarkshire-wide (hosted) services; and social care services. The IJB is made up of eight voting members: four Elected Members appointed by NLC and four Non-Executive Directors appointed by NHSL. Non-voting members of the Board include the Chief Officer, the Chief Social Work Officer, the Nurse Advisor, the Medical Advisor, the Chief Financial Officer, the Registered Medical Practitioner and representatives for staff, the third sector, service users and carers. In March 2019, the IJB approved the Strategic Commissioning Framework1 for the period 2019 to 2022 and issued in March 2021 IJB Directions2 for 21/22 to each of the partners to achieve safer, healthier, independent lives for the residents of North Lanarkshire. The IJB’s Business Model and Strategy 1 https://mars.northlanarkshire.gov.uk/egenda/images/att90476.pdf 2 https://mars.northlanarkshire.gov.uk/egenda/images/att93865.pdf
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 8 The business model for the IJB is managed through key leadership groups which are aligned to both partners’ objectives. Front-line service delivery continues to be carried out by NLC and NHSL across six localities in line with the directions from the IJB. The directions from the IJB to NHSL and NLC outline what the IJB requires both bodies to do, the funding allocated to these functions, and the mechanisms through which the performance in delivering the directions will be monitored. Strong financial planning and management, the achievement of best value and the allocation of resources to support sustainable models of service delivery from a whole system perspective underpin everything that the IJB and the partners do to ensure our limited resources are targeted to achieve our outcomes.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 9 The IJB’s Outcomes for the Year The 2021/22 financial year was dominated by the response to the pandemic, though performance across all key HSCP areas continued to be reported to the IJB throughout the year as set out in pages 8 and 9. Some of the key outcomes for individuals in North Lanarkshire are summarised below: Following the World Health Organisation’s declaration of a Covid-19 pandemic on 12 March 2020, command structures were initiated in North Lanarkshire Council and NHS Lanarkshire, alongside those through the Lanarkshire Resilience Partnership. The IJB exercised agile governance principles and the Chief Officer participated as a full and active member of North Lanarkshire Council and NHS Lanarkshire’s Gold Command structures and the Lanarkshire Resilience Partnership. The IJB is now included as a Category 1 Responder. The delivery of the Covid-19 vaccination programme progressed at pace throughout 2021/22, reaching over 548k individuals in Lanarkshire and delivering over 1.5m doses in total by the end of the financial year. As part of the pandemic response, the partnership hosted a pan-Lanarkshire Care Home Assurance Group, bringing together key HSCP partners, NHSL/NLC/SCL service leads and the Care Inspectorate to provide additional support and assurance around the safe delivery of care within the Care Home sector. Similarly, a joint group was formed for Care at Home services. This led to a wide range of quality and assurance activities across both sectors, whilst enabling the sharing of best practice and implementation of consistent approaches across Lanarkshire as a whole. A whole system approach has been adopted to increase the resilience of community health and social care services including statutory services, independent providers and the third and voluntary sector through the redeployment of staff, increasing existing staff capacity and the reliance on volunteers. Partners and staff have embraced different ways of working and new technologies including remote service delivery and the use of telephone and Near Me (video) consultations to minimise footfall and enable face-to-face consultations for patients and service users who need it the most. In the latter months of the 21/22 year, restrictions have continued to ease, creating opportunities to increase footfall on sites and subsequently face to face consultation, though the focus has been on ensuring that the positive gains made during the pandemic around hybrid working are maintained. This will ensure we maintain flexible and adaptable models of service delivery for staff and our service users alike. Significant work has been undertaken to continue to align the Remobilisation Plan with the Strategic Commissioning Plan 2020-2023 ambitions and the Programme of Work. 53 service reviews have been undertaken to refresh the key priorities for 2021/2022 and to build on the recovery plans. Many aspects of the Programme of Work had moved forward more quickly due to the emergency response to the Covid-19 pandemic. Engagement continued with stakeholders to develop the detail of the plan. Response, Redesign and Recovery groups have been established to remobilise services. Remobilisation plans continued to be developed and updated throughout 2021/22, with some services significantly impacted by the ongoing pandemic response.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 10 Through clinical prioritisation, some community services were paused to free staff to support service delivery within the acute sector due to the overwhelming pressures being experienced. Waiting times have continued to prove challenging across a range of services and while we have seen strong recovery in services such as Psychological Therapies and Podiatry, others like CAMHS and Children and Young People’s Speech and Language Therapy continue to be areas of high risk. Remobilisation plans have been updated accordingly. In February 2022, the IJB approved the winter plan and enhanced support business case, which focused on prevention and early intervention, empowering individuals and communities and improving efficiency by working as a whole system. Key developments contained within included: o Creation of new Home Assessment teams in each Locality to support both earlier discharge and rapid community response to prevent admission o Expanded Integrated Rehabilitation Team and Reablement capacity to enable a greater local focus on maximising independence o Expanded capacity within the Equipment and Adaptation service to support rapid deployment of equipment to enable the safe roll out of the model described above o Expanded Home Support capacity to meet growing demand o Creation of new roles within Community Nursing teams to focus additional supports on the Care Managed Caseload (those at highest risk of hospital admission within the community) o Roll out of digital community alarms and the creation of a Technology Enabled Care team to support Localities to maximise the innovative use of TEC o Extended hours and service model to include both admission prevention and discharge support within Hospital at Home o Support for the Independent Sector SDS suppliers, including support at home. In line with North Lanarkshire Council’s Delivering for Communities report, the HSCP finalised its structural changes, ensuring strong and proactive systems and processes to maximise the use of the Community Boards as a key vehicle for participation and engagement. A wider review of participation and engagement was commissioned in 21/22, led independently via Voluntary Action North Lanarkshire, with the outputs and recommendations due to be reported to the IJB for implementation in 22/23. The mixed market of provision supports genuine choice and control for people. This has seen a significant investment in the relationship with the 19 independent sector providers on the Self-Directed Support Framework. This relationship offers greater flexibility to achieving outcomes, promotes inclusion and connection and incorporates digital responses. This requires trust, co-operation and a partnership approach between all stakeholders. The operating model supporting individual budgets has also developed to ensure financial stability for providers whilst ensuring
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 11 best value for people considering the use of their indicative budget. Choice and control are further promoted through the option of people receiving their individual budget as a direct payment. The Carers (Scotland) Act 2016 came into force on 1st April 2018. North Lanarkshire Carers Together is the overarching carer information service in North Lanarkshire, overseeing a range of information and advice services relevant to carers’ needs. They work in partnership with health and social care, community and voluntary sector colleagues to identify and to support hard to reach carers. North Lanarkshire Young Carers Project also supports young carers aged 8-18 (or age 18 and still at school). They raise awareness, identify and provide direct support to children and young people who look after or help to look after someone in their family who is unwell or disabled, including children caring for parents who have mental health or substance misuse problems. Mental Health and Learning Disability Services are a hosted service which is managed and strategically led within North Lanarkshire on behalf of both HSCPs. The Lanarkshire Mental Health and Wellbeing Strategy set in progress a range of service improvements for all age groups. Access to mental health services expanded in Accident and Emergency Departments, police custody suites and prisons as a result of the availability of Action 15 funding. Through the Mental Health Recovery and Renewal Funding, a range of service developments are underway, including: o Psychological Therapies: roll out of Assessment Plus (a guided self-help intervention delivered by a range of Psychologists); roll out of ACCEPT programme (delivered by Applied Psychologists to support those living with long term conditions in the community); Psychological supports for Adults living with Learning Disabilities; expended digital interventions; expanded Neuropsychology offering; expanded Eating Disorders provision; and expanded Psychological Therapies provision. o CAMHS: roll out of the Choices and Partnership Approach (rapid triage and collaborative consulting model); full implementation of the national service specification including expanded age range; creation of a new CAHMS facility in Udston Hospital, co-designed with those with lived experience; creation of the Neurodevelopmental Service. o Perinatal and Infant Mental Health: development of perinatal and infant mental health teams including recruitment of Multi-Disciplinary Teams (MDT), training etc, with services now open to referrals; development of Maternity and Neonatal Service embedded within Maternity services with MDT recruited and open for referrals. A wide range of stakeholder engagement was undertaken to support the Alcohol and Drug Partnership (ADP) to develop its Strategic Plan and associated Investment Plan in line with national evidence, regional scoping work and learning from commissioned services. Following an in-depth review of the governance structures, the IJB approved in September 2021 the new arrangements, including five subgroups that will support delivery on the Partnership Delivery Framework; National Mission - Rights Respect and Recovery; National Alcohol Framework; and the Ministerial priorities.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 12 The development of urgent care pathways continued in 21/22, with a new single point of access through NHS24 and the Flow Navigation Centre. Mental Health hubs were developed, greatly reducing the waiting times spent within ED departments. Through opening up direct access to MH services via police triage, the percentage of individuals maintained in the community has increased substantially from 28% in 2019 to 62.5% in 2021. The IJB participated fully in the consultations on the National Care Service, working collaboratively with North Lanarkshire Council and NHS Lanarkshire as part of the process. As part of the process, the HSCP undertook a self-assessment against all aspects of the report to support identification of any potential strengths and gaps for the future. This led to some more detailed areas of work, such as a review of ethical commissioning in North Lanarkshire, which was presented to the IJB in March 2022. The IJB undertook a Best Value Audit in conjunction with the Improvement Service, in advance of future formal IJB audits on Best Value being introduced in 2022/23, running through to 2026/27. Following the self-assessment exercise, an improvement plan has been developed and will be signed off by the IJB in 22/23. New whistleblowing standards were approved by the IJB, which bring a consistent approach to how the IJB alongside its NHSL and NLC partners will manage whistleblowing cases in future. The whole system approach undertaken included joint presentation to the IJB by the NHSL and NLC leads to ensure a once for North Lanarkshire approach. In June 2021, the IJB approved the roll out of the McMillan Cancer Support Improving Cancer Journey (ICJ) programme, bringing £2m of non-recurring funding into the two Lanarkshire partnerships to develop support over a five-year period for those affected by and recovering from a cancer diagnosis. Through the Community Solutions programme, a strategic funding programme for the community and voluntary sector managed by VANL, the third sector interface in North Lanarkshire, the partnership has invested in a number of condition specific, locality based services which offer information, activities and support to carers. The Community Solutions Programme (CSP) has made a significant contribution to supporting vulnerable groups and communities during the Covid-19 pandemic. The CSP utilises eleven project hosts to guide best practice (e.g. in physical activity; healthy eating; anticipatory planning; transport etc) and six locality host organisations to ensure a truly community led approach. Crucially, the IJB has confirmed recurring funding of £1.141m to the CSP to ensure stability and continued development with VANL as a key strategic partner. In collaboration with North Lanarkshire Council and NHS Lanarkshire, a new community campus in Chryston is now under construction, that will see primary education, community and health and social care facilities created in Chryston. This will support the repatriation of a number of community health services for the Northern Corridor area that are currently provided via SLA by NHS Greater Glasgow and Clyde, creating equitable service provision across the North Lanarkshire area.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 13 The IJB’s Financial Position at 31 March 2022 The delegated funds for the IJB come from NLC and NHSL. The level of funding available to the IJB is therefore heavily influenced by these organisations’ grant settlements from the Scottish Government. The IJB Financial Plan 2021/2022 was approved by the IJB on 23 March 2021. Demographic growth, inflationary cost pressures and national priorities were originally projected to increase costs by £20.426m in 2021/2022. Additional funding invested in the HSCP totalled £18.719m. The funding gap was therefore £1.707m. In order to address this, savings totalling £1.453m within NLC were approved and the remaining £0.254m was proposed to be addressed by the achievement of the Prescribing Quality and Efficiency Programme target. The actual expenditure incurred in 2021/2022 is detailed at note 4 on page 36 and is compared to the actual expenditure incurred in 2020/2021 and 2019/2020 in the graph below. The final year-end underspend at 31 March 2022 is £74.670m (NHSL - £58.697m; NLC - £15.973m). Expenditure incurred against reserves in 2021/2022 is £8.336m (NHSL - £7.564m; NLC - £0.772m). The surplus on the provision of services and total comprehensive income and expenditure in 2021/2022 is therefore £66.334m. Information on the significant variances across health and social care services are highlighted as follows:
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 14 Of the £58.697m NHSL underspend the most significant variances are within the hosted services led by the North Lanarkshire HSCP of £16.596m which includes underspends of £10.328m in Mental Health & Learning Disability Services and £5.285m in Children and Adolescents Mental Health Services. The IJB’s Financial Position at 31 March 2022 (CONTD.) There is also an underspend in Locality and Other services (£4.549m), Addiction Services (£2.336m), Prescribing (£1.500m) and Primary Care and Mental Health Transformation Fund and the Primary Care Improvement Fund (9.796m). Of the £15.973m NLC underspend £6.400m is in relation to the Scottish Government Funding for winter planning and £0.843M across carers budgets both of which will be carried forward to ring-fenced reserves. There is also a £7.987m underspend within the care at home sector predominantly relating to staff shortages. Covid-19 funding totalling £45.098m was received from the Scottish Government in 2021/22 of which £13.412m was incurred in 2021/2022 and £31.686m will be transferred to a ring-fenced reserve to meet ongoing Covid-19 costs in 2022/2023. The planned commitments in respect of the additional funding of £6.400m which was received in December 2021 from the Scottish Government for winter planning system pressures will be incurred in 2022/2023. Additional allocations received from Scottish Government which remain unspent at year end and will be added to IJB reserves for use in future years include the following main areas: - o ADP £1.931m o CAMHS £9.109m o Multi Disciplinary teams £1.160m o Additional healthcare support workers £0.634m o MH Action 15 £3.016m o Distress brief Interventions £1.444m o MH Recovery – Facilities £1.840m The total underspend of £74.670m represents approximately 9% of the total financial envelope available. The total savings target was £2.688m and the value of the savings target achieved was £2.554m (95%). The underachievement of savings totalling £0.134m (5%) was addressed by Scottish Government funding for proposals delayed as a consequence of the Covid-19 pandemic.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 15 Annual Accounts 2021/2022 The financial outturn for the year ended 31 March 2021 is therefore a surplus of £66.334m. This is highlighted on the Comprehensive Income and Expenditure Statement on page 29 and is also included in the Movement in Reserves Statement on page 30. The total movement on reserves at 31 March 2021 is a net increase of £66.334m. The final year-end underspend of £74.670m and the movement in reserves of £66.334m are reconciled in the table below. Financial Outturn 2020/2021 Movement In Reserves Reduction / (Increase) Returned to Partner £m £m £m NLC - General Underspend 15.973 (15.973) NLC -HRA Underspend 0.302 (0.302) NLC - Net Underspend 16.275 (15.973) (0.302) NHSL Underspend 58.697 (58.697) Total As At the 31 March 2021 74.972 (74.670) (0.302) Expenditure incurred against reserves in 2020/2021 8.336 Deficit or (surplus) on provision of services and total comprehensive (income) and expenditure (Page 29 and Page 41 Note 11) (66.334) The services which are hosted by the North Lanarkshire IJB on behalf of the South Lanarkshire IJB and the hosted services which are led by the South Lanarkshire IJB on behalf of the North Lanarkshire IJB are detailed in note 10 on pages 39 to 40. In line with the Integrated Resource Advisory Group Finance Guidance, the lead partner for a hosted service is responsible for managing any overspends incurred. With the exception of ring-fenced funding, the lead partner can also retain any underspends which may be used to offset the overspends. This arrangement has been in place since 1 April 2016. The North Lanarkshire IJB and the South Lanarkshire IJB endorsed this principle in respect of 2021/2022.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 16 During the year, £8.336m was drawn from the IJB reserves. Of the total underspend of £74.670m reported at 31 March 2022, £31.686m (42%) was transferred to ring- fenced reserves, with the remainder of £42.984m (58%) being added to the earmarked reserve. The net transfer to reserves was therefore an increase of £66.334m. The balance on the IJB reserves at 31 March 2022 is £119.452m. The ring-fenced (£45.718m), earmarked (£70.050m) and contingency reserves (£3.684m) are detailed at note 11 on page 41. It is good financial management to maintain a contingency reserve. The contingency reserve represents 0.5% of the total IJB financial envelope. There continues to be a significant element of financial risk associated with the ongoing response to and consequences of the Covid-19 pandemic. The Chief Finance Officer and both partners will continue to confirm the Covid-19 pandemic costs which will require to be set against the remobilisation and recovery plan. In order to ensure financial sustainability during the pandemic and post-pandemic, the IJB Medium to Long Term Financial Plan will be updated. The North Lanarkshire IJB was established under the Public Bodies (Joint Working) (Scotland) Act 2014 and falls within section 106 of the Local Government (Scotland) Act 1973. The annual accounts are therefore prepared in accordance with the Local Authority Accounts (Scotland) Regulations 2014. Matters of Strategic Importance The IJB Financial Plan 2022/2023 was approved on 23 March 2022. Including the cost of the previously approved North Lanarkshire Winter Planning and Enhanced Supports Business Case, costs are projected to increase by a total of £56.901m and funding is projected to increase by £51.396m. The funding gap of £5.505m will be addressed by budget realignments (£3.264m), a projected recurring prescribing budget underspend (£1.493m), prescribing efficiency savings (£0.387m) and reliance on reserves (£0.361m). In respect of demographic growth and demand for services, research indicates that expenditure on healthcare would require to increase in real terms by an average of 3.3% per annum over the next 15 years to 2033 in order to maintain NHS provision at current levels. Social care funding would also require to increase by 3.9% per annum to meet the needs of the population living longer and an increasing number of younger adults living with disabilities. These projections do not take into account the impact of the Covid-19 pandemic including long-Covid, the financial cost of which continues to be uncertain but is expected to be significant. The impact of Covid-19 on health and social care services and the economy as a whole is unprecedented in recent times and has increased the risk of an overspend. Governance arrangements continue to be in place for the approval and monitoring of costs and regular updates are provided to the Scottish Government. Resilience is required within our health and social care system for the foreseeable future in response to Covid-19.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 17 The NLC and NHSL governance arrangements were reviewed and adapted as appropriate to support the response, recovery and redesign of services following the pandemic. The response, redesign and recovery of services is continuing. The aim of this next stage is to provide good corporate governance and oversight; seek out innovative solutions aligned to redesign for effectiveness and efficiencies; provide a safe working environment for essential services; and engage openly and constructively with all key stakeholders throughout the recovery planning. The IJB considers the innovative approaches and service alterations put in place out of necessity may present opportunities as we seek to re-start services within the new context in which health and social care services now need to be delivered. In doing so the IJB will continue to follow appropriate governance structures and consider equalities and human rights requirements to ensure that from the current crisis emerges a more efficient and effective health and social care system that delivers on the priorities set out in the SCP. The NLHSCP will actively seek to understand the impact of the measures implemented during the emergency response to the Covid-19 pandemic and also the remobilisation and recovery activity in order to agree which changes can be retained or adapted to improve services whilst still continuing to be person-centred and meet individual outcomes. A review will also be undertaken to identify key learning points and to share good practice.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 18 Key Strategic Risks and Uncertainties The IJB Risk Management Strategy complements the existing risk management processes within each partner. All three risk registers are reviewed regularly by the management team. It is important to note that some of the funding solutions in 2021/2022 were non- recurring and some cost pressures are expected to recur again in 2022/2023. The impact of the savings not achieved in full in 2021/2022 (£0.134m) will be taken into consideration during the review of the 2022/2023 Financial Plan. The notional set-aside budget aims to provide a mechanism for tracking the consumption of an element of hospital resources by North Lanarkshire residents. The budget for 2021/22 was agreed at £65.164m (2020/21 - £63.066m). The agreement currently in place with the NHS partner is that where a service change is agreed that alters the balance between hospital and community provision the impact of the specific change will be recosted and the set aside budget adjusted accordingly. There were no such changes in 2021/22. In the absence of changes, the agreement is that the services covered within the set aside arrangements will be provided for the agreed notional sum and that the risk of the cost of the directed services exceeding the agreed notional sum is borne by NHSL during the year. On that basis the expenditure recorded in the 2021/22 annual accounts equals the notional budget of £65.164m. This amount will be included in both the NHSL Health Board and IJB annual accounts. It is recognised that this will not necessarily reflect the actual usage of these hospital services by the IJB in 2021/2022 however it has been endorsed as an acceptable approach pending further updates from Public Health Scotland’s information services division. It is consistent with advice issued by the Scottish Government on how the sum set-aside should be recorded in the annual accounts. The complexities of this mechanism and actual information so far is explained in more detail at note 2.2 on pages 34 and 35. A whole system approach will continue to be adopted by the partners to support the use of set-aside resources. Conclusion Covid-19 has affected each and every member of our society and a robust response was implemented. Staff, partners and communities continue to work in partnership to ensure we respond effectively to this ongoing public health crisis, protect lives and keep people safe. In the face of this unprecedented challenge, partnership working continues to be critical to respond effectively to this national health and social care crisis. Available resources have, to date, been refocussed on the critical areas affected by the Covid-19 pandemic. However, our focus is increasingly moving towards recovery and remobilisation, but with the realisation that a ‘more of the same’ approach will not be sufficient. Services will require to create new and innovative solutions to support recovery, based on the new levels of demand created by the pandemic. A financial surplus totalling £66.334m was reported at 31 March 2022. This is mainly due to the additional funding received from the Scottish Government to address Covid- 19 expenditure and to take forward national and local priorities and also the essential and necessary changes across HSCP service delivery which released core funding. It
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 19 is important to note that we do not expect to receive any further Covid-19 expenditure, so the resource carried forward will require to support any future Covid-19 spend in 2022/23 and beyond. Although the current operational and financial challenges will inevitably drive the pace of change, improving outcomes for individuals will continue to underpin the IJB’s strategic commissioning intentions and the ongoing re-design and integration of health and social care services. We will do this by ensuring that we continue to adhere to sound governance arrangements and by exploring alternative pathways to divert people into more appropriate forms of support. Much of this will require a coordinated and consistent communications message to the public, together with concerted action planning with colleagues in acute services and also the third sector, independent providers and carers across the partnership. Support for all health and social care professionals, particularly those working in community settings, will be fundamental to managing service delivery while Covid-19 remains a risk. Maintaining the positive developments which have been rapidly stepped up in response to the crisis will be a priority during the recovery process. Ensuring health and social care resources are directed to best effect and achieving financial sustainability will be key to achieving this. Approved By Cllr Carragher Ross McGuffie Marie Moy Chair Chief Officer Chief Financial Officer Date Date Date
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 20 STATEMENT OF RESPONSIBILITIES Responsibilities of the North Lanarkshire Integration Joint Board The North Lanarkshire Integration Joint Board (IJB) is required to: make arrangements for the proper administration of its financial affairs and to secure that the proper officer of the IJB has responsibility for the administration of those affairs (section 95 of the Local Government (Scotland) Act 1973; Coronavirus (Scotland) Act 2020). In this IJB, that officer is the Chief Financial Officer. manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets. ensure the Annual Accounts are prepared in accordance with legislation (The Local Authority Accounts (Scotland) Regulations 2014), and so far as is compatible with that legislation, in accordance with proper accounting practices (s12 of the Local Government in Scotland Act 2003). approve the Annual Accounts for signature. Responsibilities of the Chief Financial Officer As Chief Financial Officer I am responsible for the preparation of the IJB’s statement of accounts which, in terms of the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2021/2022 (the “Code of Practice”), as supported by the International Financial Reporting Standard (IFRS), is required to give a true and fair view of the financial position of the IJB at the financial year end and its income and expenditure for the year then ended. In preparing the Annual Accounts, I am responsible for: Selecting suitable accounting policies and applying them consistently; Making judgements and estimates that are reasonable and prudent; and Complying with the Code of Practice. I am also required to: Keep proper accounting records which are up to date; and Take reasonable steps to ensure the propriety and regularity of the finances of the IJB. I certify that these Annual Accounts present a true and fair view of the financial position of the North Lanarkshire Integration Joint Board as at 31 March 2022 and the transactions for the year then ended. Certified By Ross McGuffie Acting Chief Financial Officer Date: 24 June 2022
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 21 REMUNERATION REPORT 1 Introduction The Remuneration Report has been prepared in accordance with the Local Authority Accounts (Scotland) Regulations 2014 which requires, at least, disclosure about remuneration and pension benefits of any persons whose remuneration is £150,000 or more. The Regulations also require disclosure of remuneration information for ‘relevant’ persons. A ‘relevant person’ in relation to the Remuneration Report for a financial year includes a senior officer holding office with associated authority, whether on a permanent or temporary basis, in the financial year to which that Remuneration Report relates. All information disclosed in the tables at sections 6 and 7 in this Remuneration Report is subject to audit by Audit Scotland. The other sections of the Remuneration Report will be reviewed by Audit Scotland to ensure that they are consistent with the financial statements. 2 Integration Joint Board The Standing Orders of the IJB, as prescribed by the Public Bodies (Joint Working) (Integration Joint Board) Order 2014, set out the detail regarding IJB membership, voting, calling of meetings and the quorum for meetings. The IJB comprises eight voting members, four of whom are Elected Members appointed by North Lanarkshire Council (NLC) and four of whom are Non-Executive Directors appointed by the NHS Lanarkshire (NHSL). The term of office of members is for a period of three years. There are also non-voting representatives on the IJB drawn from health and social care professionals, employees, the third sector, service users and carers. 3 Remuneration: IJB Chair and Vice Chair The Board Members do not currently receive remuneration or expenses directly from the IJB. Any remuneration or reimbursement of expenses for voting board members is governed by the relevant IJB partner organisation. The IJB does not provide any additional remuneration to the Chair, Vice Chair or any other board members relating to their role on the IJB. The IJB does not reimburse the relevant partner organisations for any voting member costs borne by the partner. During 2021/2022, the Chair of the IJB was Dr Avril Osborne and the Vice Chair was Councillor Paul Kelly. The details of the Chair and Vice Chair appointments held during 2021/2022are shown below. No taxable expenses were paid by the IJB inv2021/2022. Name Post Held Nominated by Dr. A.Osborne Chair (1 April 2021 to 31 March 2022) NHS Lanarkshire Cllr Paul Kelly Vice Chair North Lanarkshire Council
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 22 (1 April 2021 to 31 March 2022) The IJB does not have responsibilities, either in the current year or in future years, for funding any pension entitlements of voting IJB members. Therefore no pension rights disclosures are provided for the Chair or the Vice Chair. REMUNERATION REPORT (Cont.) 4 Senior officers The Chief Officer is appointed by the North Lanarkshire IJB and is employed by North Lanarkshire Council. The Chief Officer is seconded to the IJB in line with the local arrangements. The Chief Financial Officer is appointed by the North Lanarkshire IJB and is employed by South Lanarkshire Council. The Chief Financial Officer is seconded to the IJB in line with the local arrangements. 5 Remuneration policy The remuneration of the Chief Officer is set with reference to national arrangements as well as local decisions on management structures and their associated remuneration levels. The Scottish Joint Negotiating Committee for Local Authority Services sets out the spinal column salary points for Chief Officers which can be utilised in setting salary levels for such posts. 6 Remuneration: Officers of the IJB The senior officers received the following remuneration in the period: Name Salary, Fees, Allowance s 2021/2022 Total Remuneration 2020/2021 Total Remuneration Ross McGuffie, Chief Officer (1 April 2021 to 31 March 2022) £102,352 £102,352 £101,601 Marie Moy, Chief Financial Officer (1 April 2021 to 31 March 2022) £36,631 £36,631 £36,224 The Chief Financial Officer is also appointed to the South Lanarkshire IJB. The remuneration disclosed in the table above is the proportion of remuneration received
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 23 in relation to the activity of the North Lanarkshire IJB during 2021/2022. The remuneration in respect of South Lanarkshire IJB is therefore shown separately in the South Lanarkshire IJB Annual Accounts 2021/2022 The IJB does not directly employ any Health or Social Care staff. They are employed by either NHSL or NLC and remuneration for staff is reported in the employing organisation. Pay band information is not separately provided as all staff pay information has been disclosed in the information above. 7 Pension benefits In respect of officers’ pension benefits, the statutory liability for any future contributions to be made rests with the relevant employing partner organisation. On this basis, there is no pensions liability reflected on the IJB balance sheet for the Chief Officer or any other officers. The IJB however, has responsibility for funding the employer contributions for the current year in respect of the officer time spent on fulfilling the responsibilities of their role on the IJB. The senior officers are members of the Strathclyde Pension Fund which is a Local Government Pension Scheme (LGPS). The LGPS is a defined benefit statutory scheme, administered in accordance with the Local Government Scheme Regulations 2014.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 24 REMUNERATION REPORT (Cont.) 7 Pension benefits (Cont.) Costs of the pension scheme contributions for the year to 31 March 2022 are shown in the table below: Name In-year pension contributions Accrued pension benefits To 31 March 2021 To 31 March 2022 As at 31 March 2021 Move ment In Year As at 31 March 2022 £000 £000 £000 Ross McGuffie Chief Officer £19,519 £21,291 Pensio n 8 2 10 Lump Sum Nil Nil Nil Marie Moy Chief Financial Officer £6,966 £7,058 Pensio n 15 1 16 Lump Sum 22 0 22 The pension benefits detailed in the table above relate to the proportion attributable to the activity of the North Lanarkshire IJB. In respect of the Chief Financial Officer, a pro-rata approach has been adopted for 2021/2022. Approved By Cllr Carragher Ross McGuffie Chair Chief Officer Date: Date:
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 25 ANNUAL GOVERNANCE STATEMENT Introduction The Annual Governance Statement explains how the North Lanarkshire Integration Joint Board (IJB) complies with the Code of Corporate Governance and meets the requirements of the Delivering Good Governance in Local Government Framework developed by CIPFA and SOLACE in 2016. This statement reports on the effectiveness of the IJB’s governance arrangements and system of internal control. Scope of Responsibility The Public Bodies (Joint Working) (Scotland) Act 2014 (the Act) sets out the legislative responsibilities for the delivery of integrated health and social care services. The original North Lanarkshire Health and Social Care Integration Scheme was approved by the Scottish Parliament in May 2015 and the IJB became a public sector organisation in June 2015. In April 2019, the Cabinet Secretary approved an updated Integration Scheme to reflect the transfer of the discretionary delegated functions for Children, Families and Justice Services from the IJB to the newly reshaped Education and Families Service in North Lanarkshire Council (NLC). The system of internal control is proportionate to the IJB’s strategic responsibility and reliance is placed on the NHS Lanarkshire (NHSL) and NLC systems of internal control. Within a strategic context, the IJB has a statutory duty of best value. The IJB is required to ensure that risk is effectively managed and public money is safeguarded and properly accounted for. The Governance Framework The terms of reference for the IJB are formally set out in the Public Bodies (Joint Working) (Integration Joint Boards) (Scotland) Order 2014 with particular reference to the Scottish Statutory Instruments 2014 No.285. This Order sets out provisions which apply in relation to the membership, proceedings and operation of all IJBs. Article 17 also confers powers on IJBs to establish committees and delegate functions to those committees. The roles and responsibilities of the IJB and the PFAC were originally set out in the Terms of Reference3. The IJB Code of Corporate Governance4 describes the IJB’s governance arrangements. The internal control system can only provide reasonable and not absolute assurance of effectiveness. The effective operation of each partner’s financial and corporate systems, processes and internal controls are key to achieving IJB outcomes. Review of Adequacy and Effectiveness The ongoing effectiveness of the IJB’s governance arrangements in 2021/2022 was reviewed in line with the Local Authority Accounts (Scotland) Regulations 2014. The review took into consideration the changes necessary to address the Covid-19 pandemic. Improvement actions continue to be implemented to further develop controls and to achieve integration outcomes. The review is also informed by cross- 3 https://mars.northlanarkshire.gov.uk/egenda/images/att87070.pdf 4 https://mars.northlanarkshire.gov.uk/egenda/images/att86221.pdf
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 26 assurances from each of the partners, NHSL and NLC, including consideration of their relevant internal audit and external audit reports and the governance arrangements implemented in response to the Covid-19 pandemic. Ongoing service sustainability is a key priority for the IJB and both partners.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 27 Assessment of Governance Arrangements The assessment of the IJB governance framework and internal control system confirmed that no significant control weaknesses or significant failures have arisen in the expected standards for good governance, risk management and internal control. Some areas for improvement have been identified and are detailed in the continuous improvement actions on page 25 and 26. The key conclusions which contributed to this overall assessment are detailed below. 1. Response to the Covid Pandemic 1.1 There was an immediate requirement to move quickly and decisively to manage the pressures on health and social care services across North Lanarkshire and to sustain this support throughout the duration of the pandemic. The governance context within which the IJB operates has been significantly impacted by the need to implement business continuity processes to respond to the national and international public health challenge presented by the Covid-19 pandemic. The IJB governance arrangements were therefore adapted to support the planning and delivery of health and social care services during the pandemic. 1.2 In response to the pandemic, IJB governance arrangements were amended, allowing special meetings to be convened if required, with regular meetings between the Chair, Vice Chair and Chief Officer maintained throughout. During 21/22, all meetings proceeded as planned, with special meetings called in September 21 and February 22. 1.3 The IJB, the Chief Officer and the Senior Leadership Team have been key active participants and stakeholders across the range of governance structures adopted to manage the impact of the pandemic. The NLHSCP implemented new service areas and service delivery models in response to the changing levels of need as a result of the pandemic. Examples included the following: The establishment of community assessment centres Delivery of the vaccination programme. The creation of a hub to support the distribution of personal protective equipment to health and social care staff, the third and independent sector, personal assistants and carers. The requirement for mental health assessment units. The adoption of social distancing requirements. Care Home Assurance Group arrangements Care at Home Assurance Group arrangements 2. IJB Governance Developments 2.1 The IJB has arrangements in place to deal with any conflicts of interest that may arise. It is the responsibility of IJB and PFA Members to declare any potential conflicts of interest and it is the responsibility of the Chair of the relevant IJB or PFA to ensure such declarations are appropriately considered and acted upon. The IJB arrangements continue to be regarded as fit for purpose in accordance with the governance framework. 2.2 The Scottish Government are legislating for IJBs to be included as Category 1 Responders under the Civil Contingencies Act 2004. The Scottish Government
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 28 believe this status will complement the work already conducted by all of the partners. In terms of resourcing, there should be limited additional activity associated with the requirement given local partners are already working with an integrated health and social care model. Some concerns were expressed locally during the consultation with regards to the strategic role of the IJB in the context of the NLHSCP’s operational role, governance, the role of the Chief Officer and that there were no additional formal resources to undertake this activity. 2.3 The following IJB responsibilities are standing items on the IJB and PFA agendas: Financial monitoring reports Performance monitoring reports Risk management update Progress report on agreed actions 3. IJB Strategic Commissioning Intentions 3.1 The three year Strategic Commissioning Plan 2020-20235 was approved by the IJB on 24 March 2020. In line with the Community Empowerment (Scotland) Act 2015, an extensive engagement process was undertaken involving a wide a range of staff, service users, carers and over 1,000 responses to an online questionnaire. This plan is underpinned by a Programme of Work to achieve the key ambitions which details the aims of each work programme, anticipated performance impact, key deliverables, approval routes and financial implications. In order to strengthen the links to addiction and mental health services, an integrated approach within justice services continues to be embedded. 3.2 The IJB is committed to ensuring stakeholders are fully engaged. A review of participation and engagement was commissioned during 2021/222 and the outputs and recommendations will be presented to the IJB in 2022/23. In addition, the IJB approved the developments around the Delivering for Communities strategy, which will see the use of Community Boards as a key pillar of engagement activity moving forwards. 3.3 As part of the HSCP structural review, the support arrangements around the Chief Finance Officer were reviewed in conjunction with colleagues in the South Lanarkshire HSCP, with approval granted to move to both IJBs having a 1WTE Chief Finance Officer from 2022/23 onwards. Recruitment to the additional post is already underway. Section 42 of the Public Bodies (Joint Working) (Scotland) Act 2014 requires that Annual Performance Reports (APRs) are prepared by IJBs. The 2014 Act obliges that the APR should cover the preceding year’s activity and be published four months after the end of that reporting year. The purpose of the APR is to ensure that performance is open and accountable, whilst at the same time providing an overall assessment of performance in relation to planning and carrying out integration functions. In line with paragraph 8 of Schedule 6 to the Coronavirus (Scotland) Act 2020, the publication of the final North Lanarkshire IJB Annual Performance Report 2020/2021 was rescheduled to September 2021. 3.4 A genuine integrated performance culture is embedded across the NLHSCP. The IJB and PFA continue to receive reports on service performance, despite 5 https://mars.northlanarkshire.gov.uk/egenda/images/att93862.pdf
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 29 some of the operational performance systems being delayed due to the pandemic response. A continuous improvement programme is in place which relies on performance data to drive further improvement and support informed decision making in respect of strategic planning and commissioning. 3.5 A particular measure of IJB and Scottish Government focus continues to be the number of delayed discharge bed days. This was of particular critical importance during the pandemic to improve bed capacity across Acute Services. In comparison to the same period last year, performance for the period from April to March is summarised as follows: A&E attendances down by 5.5% against 2019/20 (pre-pandemic) Emergency admissions down by 9% against 2019/20 (pre-pandemic) Unscheduled bed days (Acute) down by 4% against 2019/20 (pre- pandemic) Delayed discharge (standard delay) bed days down by 22% against 2019/20 (pre-pandemic) 3.6 The Discharge Without Delay programme commenced in 2021/22, with the aim of taking a whole system approach to reducing delayed discharge. This has included the introduction of Planned Date of Discharge across all acute sites, developing relationships and teams, having an understanding of the roles of individuals, consistency of personnel attending daily ward multi-disciplinary team meetings and improving access to systems including Near Me. 3.7 The management of ‘set-aside’ budgets totalling £65.164m in 2021/2022 continues to be complex however NHSL continue to maintain an appropriate mechanism for its operation. The overspend across the set-aside service has been managed by the health partner since 2016 and this approach was maintained in 2021/2022. As highlighted at note 2.2 on pages 36 and 37, the operation of the set-aside budget for unscheduled care services is a key area of uncertainty which has been further exacerbated by the Covid-19 pandemic. These challenges will continue during the post-pandemic period. Both hospital and community services must continue to operate together to maximise the efficacy of unscheduled care services and a whole system approach is being adopted by the partners. 4. Financial Governance 4.1 The IJB Financial Plan 2021/2022 was approved by the IJB on 23 March 2021 and set out the parameters to achieve a balanced budget by 31 March 2022. The financial position of the IJB for 2021/2022 is set out at pages 8 to 10 of the management commentary and also at pages 29 to 31. 4.2 The financial impact of implementing the emergency response to the Covid-19 pandemic was, and continues to be, significant. The Scottish Government established a process whereby the necessary activity and the additional costs incurred across health and social care services as a result of Covid-19 are reported through Mobilisation Plans. The expenditure incurred by both partners in response to the Covid-19 pandemic was fully funded by the Scottish Government in 2021/2022. A balance of funding received for 2021/2022 is being retained by the IJB in reserves to meet additional Covid-19 expenditure in
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 30 2022/23. 4.3 The IJB Financial Plan 2022/2023 was approved by the IJB on 23 March 2022 and set out the parameters to achieve a balanced budget by 31 March 2023. The financial strategy will require to be reviewed to reflect the ongoing impact of the Covid-19 pandemic on operational services. 5. Risk 5.1 There has been continued focus and development around the IJB Risk Register over the financial year, undertaken by the Chief Officer, IJB Section 95 officer and the Operational & Business Manager. In line with the findings of the table top review undertaken in 2020, new and emerging risks or changes in risk level are agreed at each meeting as appropriate. Each report gives due consideration to any risks associated with the subject matter. All risks identified relating to the functions delegated to the IJB are regularly reviewed and updated. 5.2 A table top review of the existing IJB Risk Management Strategy and the IJB Risk Register6 was undertaken by the Chief Officer, IJB Section 95 officer and the Operational & Business Manager in August 2020. Following this review, a number of risks were closed with the approval of the IJB on 22 September 2020. A proactive approach to risk management is being adopted. Confirmation of new emerging risks is agreed at each meeting as appropriate. Each report gives due consideration to any risks associated with the subject matter. All risks identified relating to the functions delegated to the IJB are regularly reviewed and updated. Internal Audit also recommended that mitigating controls be separated between controls and actions. This continuous improvement action will be completed in June 2021. 5.3 10 risks are recorded on the IJB Risk Register as follows: 5.4 The two very high risks relate to the impact of Covid on the IJBs Financial plan Strategic Plans. 6 https://mars.northlanarkshire.gov.uk/egenda/images/att96291.pdf Current Risk Level No. % Very High 2 15% High 4 31% Medium 4 31% Low 3 23% Total 13 100%
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 31 5.5 The following very high risks are also recorded on the NHSL partner’s risk register: The ability to maintain the existing General Medical Services across NHSL. Sustainability of the two-site model for the Out-of-Hours Service. Acute sector bed capacity linked to availability of beds in care homes affected by the Covid-19 pandemic. CAMHS performance and recovery Staff fatigue, resilience, wellbeing and safety following sustained pandemic response Impact of analogue to digital phone line transition on the Community Alarm Service Recovery of performance 2020/2021. 5.6 The Risk Management Update was reported to the IJB on 23 March 2022. The optimum management of risks by the IJB and both partners continues to be a priority. There is a significant element of financial risk associated with Covid-19 and service recovery. Sustainable financial strategies require to be developed to meet increased demand and to maintain the innovative and beneficial changes to service delivery which have been implemented. The IJB Reserves Strategy also requires to be reviewed in response to current circumstances. 6. Partner Assurances 6.1 In recognition of the Public Health emergency, in March 2020 both partners moved from normal operating arrangements into emergency response mode in order to react quickly and effectively to the evolving Covid-19 pandemic. Each partner adopted appropriate command and control structures and resilience arrangements as the mechanism for rapid decision making in line with their respective legislative responsibilities. Key meetings were held daily at the height of the pandemic to assess the situation and to take immediate decisions. Clear lines of reporting and escalation were in place to allow rapid assessment and resolution. Action logs and a separate Covid-19 risk register were maintained. Some services had to be stood down. Risks were assessed and consideration was given to the process for ensuring services were safely stood up once Covid- 19 numbers reduced. 6.2 The pandemic impacted on the way health and social care services were delivered over the last year with many staff redeployed to critical service areas. In recent months, staff have returned to their substantive posts, though the recovery and remobilisation efforts will continue for the foreseeable future. 6.3 Within NLHSCP, a Wellbeing Group has been established to focus on supporting and developing the strategy for Staff Health and Wellbeing across the Partnership area. Of critical importance is the co-production and collaboration with multi-agency partners, representative of residential care, third sector colleagues, psychology, spiritual care and Locality Management Teams. 6.4 Both partners provided assurance to the IJB that satisfactory controls are in operation in respect of the delivery of the IJB delegated functions. Notwithstanding the changes necessary to respond to the Public Health emergency, both partners provided assurance that the governance
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 32 arrangements remained appropriate and effective. 6.5 Both partners have well established stakeholder engagement mechanisms in place which were adjusted as appropriate during the pandemic. 6.6 During the Covid-19 pandemic elective activity was curtailed. At peak times it was suspended to allow all staffing resources to be diverted to treat the surge of Covid-19 patients but, even during periods of less demand, the need for additional physical distancing and infection control measures reduced the number of people who could be seen. Given the numbers waiting and the continued impact of working in an environment with Covid-19 present, the risk to getting back to normal waiting times performance is graded very high by the NHSL partner. To reduce harm, processes are in place for regularly reviewing the waiting lists and having a structured clinical prioritisation process to ensure the most urgent cases are seen first. This is combined with a review of very long waits over 52 weeks. Remobilisation plans continue to be developed and actioned. 6.7 Following the transfer of the discretionary Children, Families and Justice Services budgets from the IJB to NLC, a hosting arrangement was agreed in respect of the cross-cutting and support services which could not be allocated to either the IJB delegated services or to the discretionary functions transferred to NLC. This hosting arrangement is being implemented and monitored. 6.8 The sustainability of GP services in its current format across NHSL since being placed on an emergency footing remains a very high risk. The South Lanarkshire IJB is the lead partner for this hosted service. Practical measures to reduce the pressure on GP practices include additional pharmacists, the transition of responsibility of vaccinations to Health Board staff, the availability of video/telephone consultations to help GP practices to continue to safely provide support to patients and the progression of a rolling programme to transfer the property responsibility to the NHS Board where GPs feel the property burden is affecting the practice’s attractiveness. Learning will also be taken from the measures put in place over the pandemic about alternative ways of accessing practice services. 6.9 The Out of Hours Service is a hosted service led by the South Lanarkshire IJB. In June 2019, the Primary Care Out of Hours service became very fragile with the inability to cover every clinical session to sustain the two-site model leading to the frequent closure of the Airdrie site. The risk level was raised to very high and this has continued at this level ever since. Active daily management has been required and business continuity plans are in place with planned redirection to A&E, improved triaging jointly with NHS 24, plans for the further recruitment of salaried GPs, increased numbers of advanced Nurse practitioners and a communication & engagement strategy. 6.10 NLC has identified the transfer of phone lines from analogue to digital as a very high risk to the Community Alarm service. The current analogue alarms will not be able to work via a digital telephone line, but with no outward notification to the user that this is the case. Following being made aware of plans of a provider to
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 33 migrate over 1700 properties over onto a digital line, contingency plans were escalated including the purchase of new alarms that can work on both analogue and digital infrastructures and liaison with providers to delay implementation. 7. External and Internal Audit Arrangements 7.1 There are currently 9 external audit actions, with 2 complete, 4 ongoing and 3 delayed and overdue due to the pandemic response. However, work to progress to completion has re-started and aims to bring all outstanding to a quick conclusion. 7.2 The Internal Audit Plan 2021/2022 was presented to the PFA for approval on 25th May 2021, at an earlier stage than in previous years, providing greater opportunity for implementation in year. 7.3 During 2020/2021, the joint internal audit arrangements were reviewed by the IJB Chief Financial Officer in consultation with both partners. The review concluded that the current skills and expertise of each Internal Audit team are being deployed to best effect to provide the independent appraisal of the functions delegated to the IJB, assess the effective management of the strategic IJB risks, contribute positively to the strategic commissioning intentions of the IJB and provide an opinion on the overall governance arrangements of the IJB. The joint approach is efficient, cost effective, minimises the complexities of accessing data to complete audit assignments and avoids unnecessary disruption to the auditees. The IJB Chief Financial Officer’s recommendation to the IJB that the joint Internal Audit service continue up to 2022/2023 was therefore approved and remains extant.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 34 Overview of Control and Governance Improvements during 2021/2022 Improvement areas to further strengthen the IJB’s governance arrangements during 2021/2022were identified in the Annual Governance Statement included in the IJB Annual Accounts 2020/2021. A progress report in respect of these actions is detailed below. Re f. Improvement Area Action Undertaken 1 Completion of previous internal and external audit actions. Ongoing Some progress was made during 2021/22, notably through completion of major actions within the Integration Review including a review of financial support arrangements and formal consultation on the updated Integration Scheme. 2 Review of Recruitment and Retention Strategies Progressed Wide range of work undertaken to support improved recruitment and retention in 2021/22, including: Expansion of staff health and wellbeing activities including creation of local budgets for teams to access Refresh of the Care Academy approach Changes to post requirements such as removal of SVQ2 requirement in Home Support, with the service then supporting individuals to achieve the qualification at work Recruitment of additional HR supports to facilitate greater recruitment capacity with partner orgs Use of skill mix to support recruitment (e.g. new Nursing workforce within CAMHS) 3 Review of Set-Aside Concept Ongoing There have been no developments nationally on this. 4 Independent Review of Adult Social Care Services Progressed While the final form of the National Care Service remains unknown, the HSCP undertook a self-assessment exercise against the 53 recommendations of the Independent Review of Adult Social Care Services, which informed the IJB’s consultation responses.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 35 Overview of Control and Governance Improvements for 2022/2023 Following consideration of the internal review of the adequacy and effectiveness of the IJB governance arrangements, in addition to the ongoing continuous improvement actions from 2021/2022, further actions will be progressed in 2022/2023 to strengthen the good governance controls. These actions, including the timeline, are highlighted in the table below. Re f. Improvement Area Action Agreed Lead Officer Timeline 1 Completion of previous internal and external audit actions Although some progress was made during 2021/22, all previously agreed internal and external audit actions were not completed. Progress was reported to each meeting of the PFA throughout 21/22, with revised timescales agreed. Chief Financial Officer March 2023 2 National Care Service To develop a sound understanding of the impact for the NLHSCP of the outputs of the National Care Service legislation. Chief Officer March 2023 3 Implementation of improvement actions identified in the Best Value Self-Assessment exercise Following a self-assessment review assisted by the Improvement Service in February 2022, an action plan is being finalised to support the IJB in demonstrating Best Value, with actions to be completed throughout 2022/23. Chief Officer March 2023 4 Review the IJBs progress in In conjunction with the Local Resilience Partnership, undertake Chief Officer March 2023
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 36 becoming a Category 1 Responder as set out within the Civil Contingencies Act a self-assessment review against the seven duties, reporting progress to the West of Scotland Regional Resilience Partnership.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 37 Internal Audit Opinion Internal control remains, primarily, a management responsibility to ensure that the partnership conducts its business in a manner that has due regard to the principles of good governance. This responsibility has continued throughout the Covid-19 pandemic and includes any changes to business processes that have been required throughout this period. Internal Audit monitor these changes. Overall, the results of all of the work undertaken by Internal Audit in 2021/2022, including shared system audits and the reports produced by External Audit, help to inform an opinion on whether the internal controls the NLHSCP has in place are adequate. The formal annual Internal Audit opinion on the soundness of the IJB’s internal control systems is presented jointly by the NLC Audit and Risk Manager and the NHSL Chief Internal Auditor. It was recognised that the IJB and both partners continue to function within a challenging environment. The additional challenges presented in 2021/2022 by the Covid-19 pandemic further increased the scale and complexity of issues. Internal Audit have a generally positive view of the IJB’s governance, internal control arrangements and progress to achieve previously agreed audit recommendations. Generally, across the IJB, there continues to be a strong recognition amongst management of the importance of appropriate governance arrangements and proportionate but effective internal controls. There are no matters that Internal Audit require to highlight in the Annual Governance Statement. Compliance with the requirements of the IJB corporate governance framework continues to be positive with no significant weaknesses, areas of concern, material frauds or irregularities resulting in financial loss to the IJB identified in 2021/2022. The joint Internal Audit opinion is therefore that reasonable assurance can be placed upon the adequacy and effectiveness of the North Lanarkshire Health and Social Care Integration Joint Board’s framework of governance, risk management and internal control for the year ended 31 March 2022. The Internal Audit work for 2022/2023 will continue to focus on key strategic and operational areas of risk for the IJB.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 38 Conclusion and Opinion on Assurance Throughout 2021/2022, in response to the Public Health emergency, the IJB and both partners revised their governance arrangements to support the most effective response to the Covid-19 pandemic. NLC and NHSL responded pro-actively to the Covid-19 pandemic and emergency arrangements were put in place to allow services to rapidly respond to each development. Normal business operations were impacted and some of the expected systems and controls have been subject to change. Risk assessments had to be updated and regularly reviewed. Against this unprecedented backdrop, the IJB has adhered to the stated principles of good governance, acted in the public interest and been committed to continuous improvement. The IJB continues to comply with the CIPFA statements on the role of the Chief Financial Officer and the practical guidance for audit committees. In respect of the role of the Head of Internal Audit and the management of fraud and corruption, the IJB continues to place reliance on the arrangements in place with each partner. The scrutiny and oversight of the North Lanarkshire IJB Performance, Finance and Audit Committee contributes effectively to these arrangements. There were no significant control weaknesses, issues or failures in the expected standards for good governance, risk management and internal control. Assurances that adequate and effective systems of internal control are in place have been exchanged between the IJB and each partner. The IJB governance arrangements are effective and consistent with the recommendations of the CIPFA/SOLACE Framework (2016). The IJB considers that review processes are in place and are effective. Making transformational change, at the same time as managing existing services and funding pressures, particularly during the Covid-19 pandemic, continues to be challenging. Both partners will experience significant challenges in recovering from the pandemic. There will be a significant backlog of activity to be addressed. Workforce and financial resources will be stretched. Response, recovery and remobilisation plans are being refreshed to ensure available resources are prioritised and new approaches, which have proven to be effective, continue to be implemented. While recognising that continuous improvement actions will be progressed during the sixth year of operation, it is the IJB’s opinion that reasonable and objective assurance can be placed upon the adequacy and effectiveness of the IJB’s governance arrangements and that any significant risks impacting on the IJB’s principal objectives will be identified and actions taken to avoid or mitigate their impact. This assurance is limited, however, to the work undertaken during the year, the assurances provided by each partner and the evidence available at the time of preparing this statement. In partnership with NHSL and NLC, the IJB continues to have effective and robust structures in place to deliver the commissioning intentions. The good governance arrangements across the NLHSCP also effectively contribute to the implementation of the objectives of both partners. Approved By
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 39 Cllr Carragher Ross McGuffie Chair Chief Officer Date: 24 June 2022 Date: 24 June 2022
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 40 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 31 MARCH 2022 This statement shows the actual cost of providing services in accordance with generally accepted accounting practices, the total funding contributions from the partners and the surplus on activities during the year. 2020/2021 2021/2022 Gross Expenditu re Gross Income Net Expenditu re Gross Expenditu re Gross Income Net Expenditu re £m £m £m £m £m £m 189.048 (1.226) 187.822 Social Care Services 202.610 (1.593) 201.017 105.773 0.000 105.773 Family Health Services 109.652 0.000 109.652 69.088 0.000 69.088 Prescribing Costs 68.739 0.000 68.739 141.034 0.000 141.034 Hosted Services (Note 10) 149.126 0.000 149.126 63.066 0.000 63.066 Hospital Acute Services (Notional Set Aside Budget) 65.164 0.000 65.164 65.557 0.000 65.557 Health Care Services 74.073 0.000 74.073 1.281 (1.281) 0.000 Housing Services 1.668 (1.668) 0.000 0.000 0.000 0.000 Transport Services 0.539 (0.539) 0.000 0.212 0.000 0.212 Corporate Services (Note 6) 0.214 0.000 0.214 21.342 0.000 21.342 Covid-19 Costs (Note 13) 13.412 0.000 13.412 656.401 (2.507) 653.894 Cost of Services 685.197 (3.800) 681.397 0.000 (666.99 1) (666.991) Taxation and Non- Specific Grant Income (Note 5) 0.000 (702.63 3) (702.633) 0.000 (23.607) (23.607) Covid-19 Funding (Note 13) 0.000 (45.098) (45.098) 656.401 (693.10 5) (36.704) Deficit or (surplus) on provision of services and total comprehensive (income) and expenditure 685.197 (751.53 1) (66.334)
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 41 (Note 4) The IJB was established on 27 June 2015. Integrated delivery of health and social care services commenced on 1 April 2016. 2021/2022 is the sixth year of operation for the IJB. There are no statutory or presentation adjustments which affect the IJB’s application of the funding received by partners. The movement in the General Fund balance is therefore solely due to the transactions shown in the Comprehensive Income and Expenditure Statement. Consequently, an Expenditure and Funding Analysis is not provided in these annual accounts.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 42 MOVEMENT IN RESERVES STATEMENT This statement shows the movement in the year on the IJB’s reserves. The movements which arise due to statutory adjustments which affect the General Fund balance are separately identified from the movements due to accounting practices. Movements in Reserves General Fund Balance £m Total Reserves £m Opening balance at 1 April 2020 16.414 16.414 Total Comprehensive Income and Expenditure (36.704) (36.704) Increase or (decrease) in 2020/2021 36.704 36.704 Opening balance at 1 April 2021 53.118 53.118 Total Comprehensive Income and Expenditure (66.334) (66.334) Increase or (decrease) in 2021/2022 66.334 66.334 Closing balance at 31 March 2022 119.452 119.452
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 43 BALANCE SHEET AS AT 31 MARCH 2022 The balance sheet shows the value as at 31 March 2022 of the IJB’s assets and liabilities at the balance sheet date. The net assets of the IJB are matched by the reserves held by the IJB. Notes 31 March 2022 £m 31 March 2021 £m Current assets Short term debtors 7 119.452 53.118 Net assets / (liabilities) 119.452 53.118 Usable reserves 11 119.452 53.118 Total reserves 119.452 16.414 The Statement of Accounts present a true and fair view of the financial position of the North Lanarkshire Integration Joint Board as at 31 March 2022 and its income and expenditure for the year then ended. The unaudited accounts were authorised for issue on 24 June 2022. Authorised by Ross McGuffie Acting Chief Financial Officer Date: 24 June 2022
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 44 NOTES TO THE FINANCIAL STATEMENTS 1. Accounting policies 1.1 General principles The financial statements summarise the transactions of the IJB for the financial year 2021/2022and its position at the year end of 31 March 2022. The IJB was established under the requirements of the Public Bodies (Joint Working) (Scotland) Act 2014 and is a section 106 body as defined in the Local Government (Scotland) Act 1973. It is a joint venture between North Lanarkshire Council and NHS Lanarkshire. The financial statements are therefore prepared in compliance with the Code of Practice on Local Authority Accounting in the United Kingdom 2021/2022, supported by the International Financial Reporting Standards (IFRS), unless legislation or statutory guidance requires different treatment. Each partner complies with their accounting policies as appropriate. 1.2 Going concern The annual accounts are prepared on a going concern basis, which assumes that the IJB will continue in operational existence for the foreseeable future. 1.3 Accounting convention The annual accounts are prepared under the historical cost convention. 1.4 Accruals of income and expenditure Activity is accounted for in the year that it relates to and not simply when financial transactions are undertaken. In particular: Expenditure is recognised when goods or services are received and their benefits are used by the IJB. Income is recognised when the IJB has a right to the income, for instance, by meeting any terms and conditions required to earn the income, and receipt of the income is probable. Where income and expenditure have been recognised but settlement in cash has not taken place, a debtor or creditor is recorded in the balance sheet. Where debts may not be received, the balance of debtors is written down. 1.5 Funding The IJB is primarily funded through funding contributions from the statutory funding partners, North Lanarkshire Council and NHS Lanarkshire, to fund its services. Expenditure is incurred as the IJB commissions specified health and social care services from the funding partners for the benefit of service recipients in North Lanarkshire. 1.6 Cash and cash equivalents The IJB does not operate a bank account or hold cash. Transactions are settled on behalf of the IJB by the funding partners. Consequently, the IJB does not present a “cash and cash equivalent” figure on the balance sheet. There is
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 45 therefore no requirement for the IJB to prepare a cash flow statement. The funding balance due to or from each funding partner as at 31 March 2022 is represented as a debtor or creditor on the IJB’s balance sheet. 1.7 Employee benefits The IJB does not directly employ staff. Staff are formally employed by the funding partners who retain the liability for pension benefits payable in the future. The IJB therefore does not present a pensions liability on its balance sheet.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 46 NOTES TO THE FINANCIAL STATEMENTS (Cont.) 1. Accounting policies (Cont.) 1.8 Corporate services The IJB has a legal responsibility to appoint a Chief Officer. A Chief Financial Officer has also been appointed to the IJB. The details in respect of these arrangements are outlined in the Remuneration Report. The charges from the employing partner are treated as employee costs within Corporate Services. The absence entitlement of both the Chief Officer and the Chief Financial Officer as at 31 March 2022 is not material and has therefore not been accrued. 1.9 Contingent Liability A contingent liability is a possible liability arising from events on or before 31 March 2022 whose existence will only be confirmed by later events. A provision that cannot be reasonably estimated, or where settlement is not probable, is treated as a contingent liability. A contingent liability is not recognised in the IJB’s balance sheet but is disclosed in a note where it is material. 1.10 Indemnity Insurance The IJB has indemnity insurance for costs relating primarily to potential claim liabilities regarding board member and officer responsibilities. NHS Lanarkshire and North Lanarkshire Council have responsibility for claims in respect of the services that they are statutory responsible for and that they provide. Unlike NHS Boards, the IJB does not have any “shared risk” exposure from participation in the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS). The IJB participation in CNORIS is therefore analogous to normal insurance arrangements. 1.11 Debtors and creditors Where income and expenditure have been recognised but cash has not been received or paid, a debtor or creditor for the relevant amount is recorded in the balance sheet. Debtors have been analysed as short term debtors which is income receivable within one year on the basis that these reserves could be utilised at any time. A bad debt provision is not assessed as necessary as the debtor balances represent usable reserves held by each partner on behalf of the IJB. There are no creditor balances. 1.12 Reserves A reserve is the accumulation of surpluses, deficits and appropriation over a number of years. Reserves of a revenue nature are available and can be spent or earmarked at the discretion of the IJB. Reserves should be split between usable and unusable on the balance sheet. As at 31 March 2022, the usable reserve balance totals £53.118million. There are no unusable reserves. 1.13 Specific Service Income
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 47 Income may be received from individuals as a contribution towards the cost of their social care services. The amount collected is allocated to the relevant expenditure category and the net cost is reported in the Comprehensive Income and Expenditure Statement. This is the basis upon which the 2021/2022annual accounts have been prepared.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 48 NOTES TO THE FINANCIAL STATEMENTS (Cont.) 2. Critical judgements and estimation uncertainty The critical judgements made in the financial statements relating to complex transactions include the following: The accounting treatment of hosted services and the hospital acute services (set-aside). Expenditure in respect of these services is included in the financial statements on the basis of estimated figures. Estimates are made taking into account the best available information, however, actual results could be materially different from the assumptions and estimates used. This is further explained at notes 2.1 and 2.2. The financial implications of the transfer of the Children, Families and Justice Services budgets back to NLC are highlighted at note 2.3. 2.1 Hosted Services In applying the accounting policies set out above, the IJB has had to make a critical judgement relating to complex transactions in respect of values included for services hosted within North Lanarkshire IJB for South Lanarkshire IJB. Within Lanarkshire, each IJB has operational responsibility for the services which it hosts on behalf of the other IJB. In delivering these services the IJB has primary responsibility for the provision of the services and bears the risk and reward associated with this service delivery in terms of demand and the financial resources required. As such, the IJB is considered to be acting as “principal” and the full costs are now reflected within the annual accounts for the services it hosts. This is the basis upon which the 2021/2022 annual accounts have been prepared. The relevant share of the pan Lanarkshire and area wide service expenditure is therefore included in the North Lanarkshire IJB on the basis of 51% of the total expenditure. 49% of the services relating to the South Lanarkshire IJB are also included as the North Lanarkshire IJB is acting as the principal for the delivery of these services. In line with the Integrated Resource Advisory Group Guidance, the IJB responsible for the management of the hosted service is also responsible for managing overspends. As a result, these are accounted for within the annual accounts of the lead IJB. The same accounting treatment was adopted where an underspend arose in respect of a hosted service. 2.2 Hospital Acute Services (Set Aside) The legislation sets out that Integration Authorities are responsible for the strategic planning of hospital services most commonly associated with the emergency care pathway along with primary and community health care and social care services. As the emergency care services in large hospitals, both within Lanarkshire and out of region, are used by the residents of multiple IJBs and are delivered using resources shared with other hospital services,
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 49 estimating the resource used each year by each IJB involves a complex allocation methodology. This is enabled by a national NHS information services division , now under NHS Public Health Scotland and involves apportioning the hospital expenditure to individual patient episodes, separating out episodes for services delegated to the IJB from those that are not , and assigning these to the relevant IJBs based on postcode. NOTES TO THE FINANCIAL STATEMENTS (Cont.) 2. Critical judgements and estimation uncertainty (Cont.) 2.2 Hospital Acute Services (Set Aside) (Cont.) The complexity of this exercise means the results are produced at a time lag of over a year with the 2019/20 data expected to be available in 2021/22. Difficulties were experienced by PHS in completing the 2019/20 exercise so this resource review has still to take place. The latest available data remains 2018/19. The results of comparing the historic budget, as increased by funding uplifts and adjusted to reflect the impact of agreed service changes , with the costed patient activity produced by the national information services function are shown in the table below. In each of the 3 years for which data is available the estimated costs of providing the services exceeded the budget and that additional cost was borne by NHSL in each year rather than recharged to the IJB. Year Notional Budget £m Actual Cost £m Underspend/(Overspend) £m 2016/2017 57.250 57.444 (0.194) 2017/2018 56.719 58.373 (1.654) 2018/2019 58.103 58.693 (0.590) There have been no developments nationally during the year which offer a more timeous complete solution. Research reported by the NHS Finance Director has revealed that some Boards use preset apportionments of their ledger costs and discussions will continue as to whether a more timely but less precise methodology like that would have merit in future. 3. Events after the reporting period The Chief Financial Officer authorised the unaudited annual accounts for issue on 24 June 2022. There have been no other material events since the date of the balance sheet which require revision to the figures in the annual accounts.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 50 NOTES TO THE FINANCIAL STATEMENTS (Cont.) 4. Expenditure and Income Analysis by Nature 2020/202 1 £m 2021/2022 £m 189.048 Social Care Services 202.610 105.773 Family Health Services 109.652 69.088 Prescribing Costs 68.739 110.374 Hosted Services - Led by the North IJB (Note 10) 114.573 30.660 Hosted Services - Led by the South IJB 34.553 141.034 Hosted Services – Total 149.126 63.066 Hospital Acute Services (Notional Set Aside Budget) 65.164 52.430 Health Care Services – Localities 58.073 8.648 Health Care Services - Area Wide 11.010 4.480 Health Care Services - Out-of Area 4.990 65.558 Health Care Services – Total 74.073 0.741 Housing Services - Housing Revenue Account 1.183 0.540 Housing Services - General Fund 0.485 1.281 Housing Services – Total 1.668 0.000 Transport Services 0.539 0.212 Corporate Services 0.214 21.342 Covid-19 Costs 13.412 656.401 Total Gross Expenditure 685.197 (518.560) Funding Contribution - NHS Lanarkshire (537.84 5) (148.431) Funding Contribution - North Lanarkshire Council (164.78 8) (2.507) Specific Service Income (3.800) (23.607) Covid-19 Funding (45.098 )
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 51 (693.105) Total (Income) (751.53 1) (36.704) Deficit or (surplus) on the provision of services (66.334 ) NOTES TO THE FINANCIAL STATEMENTS (Cont.) 5. Taxation and Non-Specific Grant Income 2020/2021 £m 2021/202 2 £m (518.560) Funding Contribution from NHS Lanarkshire (537.845) (148.431) Funding Contribution from North Lanarkshire Council (164.788) (666.991) Total (702.633) The funding contribution from the NHS Board shown above includes £65.164m in respect of the “set aside” resources relating to acute hospital and other resources. These are provided by NHS Lanarkshire which retains responsibility for managing the costs of providing these services. The IJB however, has responsibility for the consumption of, and level of demand placed on, these resources. The funding contributions from the partners shown above exclude any funding which is ring-fenced for the provision of specific services. Such ring-fenced funding is presented as income in the Cost of Services in the Comprehensive Income and Expenditure Statement. The ring fenced contributions received by the North Lanarkshire IJB are detailed as follows: 2020/2021 £m 2021/202 2 £m (0.741) Housing Revenue Account (1.183) (0.540) Garden Assistance Scheme Income (0.485)
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 52 (1.281) Housing Services Total (1.668) The funding contributions from the partners shown above also exclude specific service income contributions from individuals towards the cost of their social care services. In 2021/2022 this income totalled £1.592m and is presented as income in the Cost of Services in the Comprehensive Income and Expenditure Statement on page 31. There are no other non-ring fenced grants or contributions. 6. Corporate Services 31 March 2021 £m 31 March 2022 £m 0.182 Staff Costs 0.183 0.027 External Audit Fee 0.028 0.003 Administration Costs 0.003 0.212 Total 0.214 NOTES TO THE FINANCIAL STATEMENTS (Cont.) 7. Short Term Debtors 31 March 2021 £m 31 March 2022 £m 36.400 NHS Lanarkshire 87.533 16.718 North Lanarkshire Council 31.919 53.118 Total 114.452 All balances due to the IJB from the partner bodies have been classified as short term debtors on the basis that these reserves could be utilised at any time. 8. Contingent Liabilities The IJB is unaware of any material contingent liability as at 31 March 2022. Contingent liabilities represent items that at 31 March 2022 are not recognised in the IJB’s annual accounts because there is significant uncertainty at that date as to the necessity of the partner or IJB to make payments in respect of them. 9. VAT The IJB is not VAT registered and as such the VAT is settled or recovered by the partner agencies. The VAT treatment of expenditure in the IJB’s annual
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 53 accounts depends on which of the partner agencies is providing the service as these are treated differently for VAT purposes. Where North Lanarkshire Council is the provider, income and expenditure excludes any amounts related to VAT, as collected VAT is payable to HM Revenue & Customs and all VAT paid is recoverable from it. North Lanarkshire Council is not entitled to fully recover VAT paid on a very limited number of items of expenditure and for these items the cost of VAT paid is included within service expenditure to the extent that it is irrecoverable from HM Revenue & Customs. Where NHS Lanarkshire is the provider, expenditure incurred will include irrecoverable VAT as, generally, NHS Lanarkshire cannot recover VAT paid as input tax and will seek to recover its full cost as income from the IJB. The services provided by the Chief Officer to the IJB are outside the scope of VAT as they are undertaken under a specific legal regime.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 54 NOTES TO THE FINANCIAL STATEMENTS (Cont.) 10. Hosted Services - Principal Income and Expenditure On behalf of the South Lanarkshire IJB within the NHS Lanarkshire area, the North Lanarkshire IJB acts as the lead for a number of delegated services. It therefore commissions services on behalf of the South Lanarkshire IJB and reclaims the costs involved. The payments that are made on behalf of the South Lanarkshire IJB, and the consequential reimbursement, are included in the Comprehensive Income and Expenditure Statement, since the North Lanarkshire IJB is acting as principal in these transactions. The net amount of expenditure and income relating to these principal arrangements is shown below: 2020/2021 Delegated Services - Services hosted by the North Lanarkshire IJB On behalf of the South Lanarkshire IJB 2021/2022 Expenditure on hosted services Income from hosted services Net Expenditure Expenditure on hosted services Income from hosted services Net Expenditure £m £m £m £m £m £m 1.360 (1.360) 0.000 Sexual Health Services 1.442 (1.442) 0.000 1.057 (1.057) 0.000 Continence Services 1.099 (1.099) 0.000 0.908 (0.908) 0.000 Immunisation Services 1.077 (1.077) 0.000 2.862 (2.862) 0.000 Speech and Language Therapy Services 2.962 (2.962) 0.000 3.930 (3.930) 0.000 Children and Adult Mental Health Services 6.097 (6.097) 0.000 5.591 (5.591) 0.000 Children’s Services 5.619 (5.619) 0.000 0.253 (0.253) 0.000 Integrated Equipment and Adaptation Service 0.278 (0.278) 0.000 1.854 (1.854) 0.000 Dietetics Services 1.864 (1.864) 0.000 2.081 (2.081) 0.000 Podiatry Services 2.119 (2.119) 0.000 0.848 (0.848) 0.000 Prisoner Healthcare Services 0.984 (0.984) 0.000 0.703 (0.703) 0.000 Blood Borne Virus Services 0.739 (0.739) 0.000 1.062 (1.062) 0.000 Hospital at Home Services 1.264 (1.264) 0.000 34.988 (34.988) 0.000 Mental Health Services 38.312 (38.312) 0.000
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 55 NOTES TO THE FINANCIAL STATEMENTS (Cont.) 10. Hosted Services - Principal Income and Expenditure (Cont.) Similarly, the South Lanarkshire IJB within the NHS Lanarkshire area acts as the lead for a number of delegated services on behalf of the North Lanarkshire IJB. The payments that are made by the South Lanarkshire IJB on behalf of the North Lanarkshire IJB, and the consequential reimbursement, are included in the Comprehensive Income and Expenditure Statement, since this expenditure is incurred for the residents of North Lanarkshire. The net amount of expenditure and income relating to those principal arrangements hosted by the South Lanarkshire IJB is shown below: 2020/2021 Delegated Services - Hosted Services 2021/2022 Expenditure on hosted services Income from hosted services Net Expenditure Expenditure on hosted services Income from hosted services Net Expenditure £m £m £m £m £m £m 7.373 (7.373) 0.000 Primary Care Improvement Fund 8.870 (8.870) 0.000 3.325 (3.325) 0.000 Community Dental Services 3.758 (3.758) 0.000 4.255 (4.255) 0.000 Out of Hours Services 4.509 (4.509) 0.000 2.211 (2.211) 0.000 Diabetic Services 2.929 (2.929) 0.000 4.565 (4.565) 0.000 Occupational Therapy Services 5.180 (5.180) 0.000 3.636 (3.636) 0.000 Palliative Care Services 3.770 (3.770) 0.000 0.378 (0.378) 0.000 Primary Care Services 0.389 (0.389) 0.000 4.917 (4.917) 0.000 Physiotherapy Services 5.149 (5.149) 0.000 57.497 (57.497) 0.000 South Lanarkshire IJB Total 63.855 (63.855) 0.000 52.877 (59.843) (6.966) North Lanarkshire IJB Total 50.718 (65.994) (15.276) 110.374 (117.340) (6.966) Total services hosted by the North Lanarkshire IJB (Note 4) 114.573 (129.849) (15.276)
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 56 30.660 (30.660) 0.000 Services hosted by the South Lanarkshire IJB on behalf of the North Lanarkshire IJB (Note 4) 34.554 (34.554) 0.000
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 57 NOTES TO THE FINANCIAL STATEMENTS (Cont.) 11. Usable Reserve: General Fund The purposes of the General Fund are detailed in the IJB Reserves Policy7. Funding received for a specific purpose and not yet spent will be allocated to a ring-fenced reserve. Funding for future expenditure needs and key financial risks will be allocated to earmarked reserves. A contingency reserve is required to cushion the impact of unexpected events or emergencies. This is a key part of the risk management strategy. The table below shows the movements on the General Fund balance, analysed between these purposes and the amount held as a general contingency. 7 https://mars.northlanarkshire.gov.uk/egenda/images/att91214.pdf
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 58 Balance As At 1 April 2020 Transfers Out Transfers In Balance As At 31 March 2021 Useable Reserve Transfers Out Transfers In Balance As At 31 March 2022 £m £m £m £m Ring-Fenced Reserves £m £m £m 0.000 0.000 6.076 6.076 Integrated Authority Support 0.000 0.000 6.076 0.086 (0.086) 2.358 2.358 Mental Health and Learning Disability Services - Action 15 Funding (2.355) 0.000 0.003 0.000 0.000 2.265 2.265 Covid-19 Funding (2.265) 31.686 31.686 0.000 0.000 1.941 1.941 Winter Adult Social Care Preparedness Fund 0.000 0.000 1.941 0.000 0.000 1.298 1.298 Community Living Change Fund 0.000 0.000 1.298 0.313 0.000 0.964 1.277 Alcohol and Drug Partnership Funding (0.135) 0.000 1.142 0.000 0.000 0.900 0.900 Children and Adolescent Mental Health Services Funding 0.000 0.000 0.900 0.647 (0.127) 0.300 0.820 Mental Health and Learning Disability Services - Distress Brief Intervention (0.712) 0.000 0.108 1.290 (0.271) 2.748 3.767 Ring-fenced Reserves - Other Services (1.203) 0.000 2.564 2.336 (0.484) 18.850 20.702 Ring-Fenced Reserves Total (6.670) 31.686 45.718 Earmarked Reserves 0.000 0.000 3.988 3.988 Social Care Services (Risk Based Reserve) 0.000 0.000 3.988 3.214 (3.214) 0.000 0.000 Self Directed Support Strategy (Risk Based Reserve) 0.000 0.000 0.000 3.786 0.000 0.575 4.361 Prescribing Fund (Risk Based Reserve) 0.000 0.000 4.361 0.384 0.000 6.188 6.572 IJB Financial Plan 2022/2023 (NLC) 0.000 0.000 6.572 0.000 0.000 3.000 3.000 Long Covid Contingency (Risk Based Reserve) 0.000 0.000 3.000 0.000 0.000 1.500 1.500 Minor Capital Works (0.113) 0.000 1.387 0.000 0.000 0.807 0.807 Speech, Language and Therapy Services 0.000 0.000 0.807 0.000 0.000 0.717 0.717 Children and Adolescent Mental Health Services Funding 0.000 0.000 0.717 0.000 0.000 0.600 0.600 Digital and IT Strategy Technology Improvements Funding (0.034) 0.000 0.566 0.580 0.000 0.000 0.580 Carers Act 2018 0.000 0.000 0.580 0.000 0.000 0.000 0.000 Earmarked Reserves 2021/2022 0.000 42.984 42.984 2.430 (0.492) 4.669 6.607 Earmarked Reserves - Other Services (1.519) 0.000 5.088 10.394 (3.706) 22.044 28.732 Earmarked Reserves Total (1.666) 42.984 70.050 3.684 0.000 0.000 3.684 Contingency Reserve Total 0.000 0.000 3.684 16.414 (4.190) 40.894 53.118 General Fund Total (8.336) 74.670 119.452 0.000 3.214 (3.214) 0.000 Transfer Between Reserves 0.000 0.000 0.000 16.414 (0.976) 37.680 53.118 Movement In Reserves (Decrease)/Increase (8.336) 74.670 119.452 2020/2021 2021/2022
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 59 NOTES TO THE FINANCIAL STATEMENTS (Cont.) 12. Related Party Transactions The IJB has related party transactions with NHS Lanarkshire and North Lanarkshire Council. In particular, the nature of the partnership means that the IJB may influence, and be influenced by, its partners. The following transactions and balances included in the IJB’s annual accounts are presented to provide additional information on the relationships. 2020/202 1 £m Transactions with NHS Lanarkshire 2021/2022 £m (518.560) Funding Contributions received from NHS Lanarkshire (537.845) (23.607) Covid-19 Funding (45.098) 444.518 Expenditure on Services Provided by NHS Lanarkshire 466.753 6.145 Covid-19 Costs 5.347 0.030 Support Services 0.031 (91.474) Net Transactions with NHS Lanarkshire (110.812) Key Management Personnel: The non-voting Board members are not directly employed by NHS Lanarkshire however a contribution of 50% of the cost of the Chief Officer and the Chief Financial Officer is made by NHS Lanarkshire. This payment is included in the Corporate Services cost in the Comprehensive Income and Expenditure Statement. Details of the remuneration of these post holders is included in the Remuneration Report. NHS Lanarkshire provide a range of support services for the IJB including finance services, personnel services, planning services, audit services, payroll services and creditor services. There is no charge from NHS Lanarkshire to the IJB for these support services. 31 March 2021 £m Balances with NHS Lanarkshire 31 March 2022 £m 36.400 Debtor balances: Amounts due from NHS Lanarkshire 87.533 36.400 Net Balance with NHS Lanarkshire 87.533 2020/202 1 £m Transactions with North Lanarkshire Council 2021/202 2 £m (148.431) Funding Contributions received from North Lanarkshire Council (164.787)
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 60 (2.507) Service Income received from North Lanarkshire Council (3.800) 0.000 Covid-19 Funding 0.000 190.329 Expenditure on Services Provided by North Lanarkshire Council 204.817 15.197 Covid-19 Costs 8.065 0.182 Key Management Personnel: Non-Voting Board Members 0.183 54.770 Net Transactions with North Lanarkshire Council 44.478
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 61 NOTES TO THE FINANCIAL STATEMENTS (Cont.) 12. Related Party Transactions (Cont.) Key Management Personnel: The Chief Officer is a non-voting Board member and is directly employed by North Lanarkshire Council. The Chief Financial Officer is also a non-voting Board member and is directly employed by South Lanarkshire Council. The cost of the Chief Financial Officer post is shared equally between North Lanarkshire and South Lanarkshire Council. The total cost of the Chief Officer and the Chief Financial Officer is paid by North Lanarkshire Council. This payment is included in the Corporate Services cost in the Comprehensive Income and Expenditure Statement. A contribution of 50% of this cost is met by NHS Lanarkshire. Details of the remuneration of these post holders is included in the Remuneration Report. North Lanarkshire Council also provide a range of support services for the IJB including finance services, personnel services, planning services, legal services, audit services, payroll services and creditor services. There is no charge from North Lanarkshire Council to the IJB for these support services. 31 March 2021 £m Balances with North Lanarkshire Council 31 March 2022 £m 16.718 Debtor balances: Amounts due from North Lanarkshire Council 31.919 16.718 Net Balance with North Lanarkshire Council 31.919 The financial information contained in the IJB annual accounts excludes any values associated with transactions between each of the partners. This has been removed to prevent double counting. 13. Covid-19 Costs and Funding Additional funding was provided by the Scottish Government to respond to the Covid-19 pandemic and to support the remobilisation of services. The Covid- 19 funding and Covid-19 costs are summarised as follows: 2020/2021 Description 2021/2022 £m £m 23.607 Covid-19 Funding Total (45.098) 6.145 Allocated To NHSL Costs 5.347 15.197 Allocated To NLC Costs 8.065 21.342 Covid-19 Costs Total 13.412 2.265 Remobilisation Funding Transferred To Reserves (31.686) 14. New standards issued but not yet adopted
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 62 The Code requires the disclosure of information relating to the impact of an accounting change that will be required by a new standard that has been issued but not yet adopted. The IJB considers that there are no such standards which would have significant impact on its annual accounts.
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NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2021/2022 Page | 63 Audit Arrangements Under the arrangements approved by the Commission for Local Authority Accounts in Scotland (“The Accounts Commission”), the auditor with overall responsibility for the audit of the accounts of the North Lanarkshire IJB for the year ended 31 March 2022 is Audit Scotland, 4th Floor, 102 West Port, Edinburgh, EH3 9DN.