ITEM 8 IJB Audited Annual Accounts 2022_2023
North Lanarkshire Council · 18 October 2023
Back to IJB Performance, Finance and Audit Committee — 18 October 2023 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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1 REPORT Item No: 8 1. PURPOSE OF REPORT 1.1 This paper is coming to the Performance, Finance and Audit (PFA) Committee for: For approval For endorsement For noting 1.2 This report provides details of the unsigned audited IJB Annual Accounts 2022/2023 for approval by the PFA. 2. ROUTE TO THE PERFORMANCE, FINANCE AND AUDIT COMMITTEE 2.1 This paper has been: Prepared By: Chief Finance Officer ☒ Reviewed By: Chief Officer ☒ Endorsed By: ☐ 3. RECOMMENDATIONS 3.1 It is recommended that the PFA: (1) Acknowledge the External Auditor’s opinions; (2) Approve the IJB Annual Accounts 2022/2023 for signature; and (3) Acknowledge that the signed audited IJB Annual Accounts will be available to view electronically on the HSCP website. 4. VARIATIONS TO DIRECTIONS 5. BACKGROUND/SUMMARY OF KEY ISSUES 5.1 Following the publication of the Local Authority Accounts (Scotland) Regulations 2014, the members of the IJB have to meet to consider whether to approve the audited IJB Annual Accounts 2022/2023 for signature. 6. CONCLUSIONS 6.1 This report provides an overview of the unsigned audited IJB Annual Accounts for the financial year 2022/2023 in line with legislative requirements. SUBJECT: IJB Audited Annual Accounts 2022/2023 TO: IJB Performance, Finance and Audit Lead Officer for Report: Ross McGuffie, Chief Officer North HSCP Author(s) of Report Amanda, Kilburn, Chief Finance Officer DATE: 18 October 2023 Yes No N/A
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2 7. IJB ANNUAL ACCOUNTS 2022/2023 7.1 The IJB Annual Accounts 2022/2023 were prepared in accordance with the requirements of the Local Government (Scotland) Act 1973 and the Local Government in Scotland Act 2003. This means that suitable accounting policies were selected and applied consistently, reasonable, and prudent judgement were made, and proper accounting records were maintained. The preparation of the unaudited annual accounts also met the statutory deadline of 30 June 2023. 7.2 The unsigned audited IJB Annual Accounts 2022/2023 are attached at appendix 1. 7.3 The External Auditor has concluded that the 2022/2023 financial statements of the North Lanarkshire IJB give a true and fair view of its net expenditure for the year and have therefore issued an unqualified independent audit report. 8. IMPLICATIONS 8.1 NATIONAL OUTCOMES People are able to look after and improve their own health and wellbeing and live in good health for longer ☒ People, including those with disabilities or long-term conditions, or who are frail, are able to live, as far as reasonably practicable, independently and at home or in a homely setting in their community ☒ People who use Health and Social Care Services have positive experiences of those services, and have dignity respected ☒ Health and Social Care Services are centred on helping to maintain or improve the quality of life of people who use those services ☒ Health and Social Care Services contribute to reducing health inequalities ☒ People who use Health and Social Care Services are safe from harm ☒ People who work in Health and Social Care Services feel engaged with the work they do and are supported to continuously improve the information, support, care, and treatment they provide ☒ Resources are used effectively and efficiently in the provision of Health and Social Care Services ☒ 8.2 ASSOCIATED MEASURE(S) The IJB, the Performance, Finance and Audit Committee and both partners are required to ensure effective governance arrangements are in place. 8.3 FINANCIAL This paper has been reviewed by Finance: Yes No N/A 8.4 RISK ASSESSMENT/RISK MANAGEMENT The strategic financial risks detailed in the IJB Risk Register has been updated where necessary and are included in a separate report to the IJB. Relevant Risk Register Details Current Risk Level Risk Owner Financial Challenges High Amanda Kilburn Ineffective Governance Arrangements Low Ross McGuffie Notional Set-Aside Budget High Ross McGuffie
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3 Hosted Services Medium Ross McGuffie Prescribing Activity and Costs Very High Ross McGuffie Third and Voluntary Sector Low Ross McGuffie Ineffective Governance Arrangements due to Covid-19 Pandemic Medium Ross McGuffie 8.5 ENGAGEMENT & PARTICIPATION Please tick the engagement and participation objectives that link(s) with this piece of work and provide further details on the engagement and participation that was undertaken. Objectives Further details ☒ Involve stakeholders in the development work aimed at achieving the national outcomes The Director of Finance of NHSL and the Head of Financial Solutions of NLC both continue to be consulted on the financial position of the NL IJB. ☐ Provide stakeholders with information on how to get involved ☐ Ensure a diverse range of engagement and participation and opportunities are in place to suit different needs ☐ Measure how well we involve community stakeholders in the planning, design, and delivery of our services ☒ Provide regular feedback on how stakeholder engagement and participation is shaping and influencing service development and delivery Financial information is shared with stakeholders on a regular basis and is provided to the PFA and IJB on a quarterly basis. ☒ Provide support to enable stakeholder representatives to participate meaningfully and confidently at meetings ☐ Develop participation guidelines to ensure a common understanding and set of expectations for both stakeholders and partnership staff ☒ Support engagement planning and participation in localities, taking account of other engagement activity and local plans across the Community Planning Partnership IJB Financial Plan and Reserves Strategy aligns and supports the IJB Strategic Commissioning Plan to ensure robust financial monitoring and scrutiny. 8.6 INEQUALITIES & FAIRER SCOTLAND DUTY Equality and Diversity Impact Assessment Completed & Fairer Scotland Impact Assessment Form Completed and EQIA added to website: Yes No N/A 9. BACKGROUND PAPERS PFA 21 June 2023 Unaudited IJB Annual Accounts 2022/2023
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4 10. APPENDICES Appendix 1– Unsigned North Lanarkshire Audited IJB Annual Accounts 22/23 Chief Finance Officer Members seeking further information about any aspect of this report, please contact Amanda Kilburn on telephone number 07816 126362.
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5 Appendix 1 NORTH LANARKSHIRE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS 2022/2023 AUDITED
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6 CONTENTS Page Management Commentary Purpose 3 The Role and Remit of North Lanarkshire Integration Joint Board 3 A Profile of North Lanarkshire 4 North Lanarkshire IJB Outcomes for the Year 5 o Achievements 5 o Challenges 6 Our Priorities and Ambitions for 2023/2026 7 Medium Term Financial Plan 8 Financial Performance 10 Resources Available to the IJB 10 Summary of Financial Position 2022/2023 11 Reserves Strategy 12 Risk Management 13 Acknowledgements 14 Statement of Responsibilities 15 Remuneration Report 17 Annual Governance Statement 20 Comprehensive Income and Expenditure Statement 26 Movement in Reserves Statement 27 Balance Sheet 28 Notes to the Financial Statements Note 1: Significant Accounting Policies 29 Note 2: Critical Judgements and Estimation Uncertainty 31 Note 3: Events after Balance Sheet Date 31 Note 4: Expenditure and Funding Analysis by Nature 32 Note 5: Taxation and Non-Specific Grant Income 32 Note 6: IJB Operating Costs 33 Note 7: Short Term Debtors and Creditors 33 Note 8: Usable Reserves 33 Note 9: Related Party Transactions 34 Note 10: Hosted Services 35 Note 11: Additional Council Services Delegated to the IJB 37 Note 12: VAT 37 Note 13: External Audit Costs 37 Note 14: New Standards Issued but not yet Adopted 37 Independent Auditor’s Report 38
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7 MANAGEMENT COMMENTARY Purpose This publication contains the financial statements of North Lanarkshire Integration Joint Board (IJB) for the year ending 31 March 2023. The 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 2022/23 and looks forward, outlining our future financial plans and the challenges and risks that we will face as we strive to meet the needs of the people of North Lanarkshire. Faced with the unprecedented challenges of Covid-19, followed by the continued cost of living crisis, the IJB entered into a phase of recovery and remobilisation. By working with our partners, staff and communities, our services have responded effectively to this ongoing crisis by protecting lives and keeping people safe but also recognising that the future will require new and innovative solutions to support continued recovery and increased levels of demand created by the pandemic. The IJB and Health and Social Care Partnership (HSCP) Senior Management Team would like to extend our gratitude for the magnificent work our staff continue to undertake despite the challenges they face on a daily basis, ensuring that services to those in need continue to be delivered safely and effectively. The Role and Remit of North Lanarkshire Integration Joint Board North Lanarkshire IJB, formally established on 1 April 2016, has responsibility for the strategic planning and commissioning of a wide range of health and social care services within North Lanarkshire. These functions delegated to the IJB, under the Public Bodies (Joint Working) (Scotland) Act 2014, are detailed in the formal partnership agreement between the two partner organisations, North Lanarkshire Council (NLC) and NHS Lanarkshire (NHSL) referred to as the Integration Scheme1. The IJBs primary purpose is to set the strategic direction for the delegated functions through its Strategic Commissioning Plan and the HSCP is responsible for the operational delivery of these strategic directions. These includes: accident and emergency services provided in a hospital; inpatient services related to general, geriatric, rehabilitation, and respiratory medicine; palliative care services; community health services; and social care services. The IJB comprises of eight voting members, made up of four Elected Members appointed by NLC and four Non-Executive Directors appointed by NHSL. Non-voting members include the Chief Officer, Chief Finance Officer, service professionals, third sector, service users, carers, and staff representatives. 1 NLHSCP Integration Scheme Our Purpose People of North Lanarkshire will achieve their full potential through: living safe, healthy, and independent lives in their communities; and receiving the information, support and care they need, efficiently and effectively, at the right time and in the right way.
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8 A Profile of North Lanarkshire A full profile of North Lanarkshire IJB is set out in the Strategic Commissioning Plan 2023/2026. Some of the key population characteristics include the following: By mid-2043, the 0 to 15 age group is projected to see the largest decrease (-11%). 75 and over age group is projected to see the largest percentage increase (+53.5%). In 2021/22, 13.5% of Lanarkshire residents were living with three or more long term health conditions. North Lanarkshire has a higher rate per 1,000 population compared to Scotland for several health indicators including A&E attendances, acute emergency hospital admissions, readmissions, NHS24 calls and alcohol and drug related hospital admissions. 10% of North Lanarkshire population is identified as being in a caring role with early indication that this number is set to rise. In North Lanarkshire, life expectancy at birth was higher for females (79.2 years) then for males (74.5 years) in 2018-2020, however both male and female remains below that of the Scottish average. North Lanarkshire Population is 341,400. There are 24,796 working-age people in North Lanarkshire experiencing employment deprivation. This is 11% of the working-age population. Across North Lanarkshire 15% of people are income deprived. The Scottish average is 12%.
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9 North Lanarkshire IJB Outcomes for the Year The achievements and challenges highlighted below represent some of the common themes which emerged in our engagement activities with staff and our stakeholders. Achievements Resilience Within the System – staff, carers, and service users A common thread through all our engagement activity was the recognition of the efforts and resilience of members of staff from across the health and social care sector, volunteers, carers, service users and family members in dealing with the many challenges of the pandemic. Focus on Staff Health, Wellbeing, and Connectedness Training, practical, and psychological supports have been developed for staff wellbeing across the Health and Social Care Partnership (HSCP) over the past two to three years. These initiatives are now aligned and incorporated within the major strategic workplans of both the partnership, NLC and NHSL which will inform and shape the way we work going forward by engaging with staff, embedding good practise in our ways of working and improving our methods of supporting staff in the longer term. Care Academy The Health and Social Care Academy provides curriculum opportunities linked to the health and social care sector. These are targeted at young people in the senior phase of learning from the nine secondary schools in North Lanarkshire. It is focused on assisting pupils to gain qualifications as well as work related learning experiences which will help them in gaining employment and assist in meeting the workforce requirements of the sector. The main areas are health and social care, general nursing, and allied health professions. Community Solutions – community capacity building Community Solutions is the community led, health and social care investment programme operating across North Lanarkshire, focused on building communities where people can have full, independent lives. The programme, which has been in place since 2013, is a partnership between HSCP, Voluntary Action North Lanarkshire (VANL), the community and the voluntary sector of North Lanarkshire. Its latest Strategy and Investment Plan 2022/2025 was agreed in March 2022, setting out investment plans within the programme to strengthen community capacity and resilience and deliver person-centred, community-based support and services to priority groups. Enhanced Capacity and Resilience In February 2022, the IJB approved a £20m business case utilising both recurring and non- recurring funding to transform the whole health and social care system by building capacity and resilience within it. Building on the wider approach to recovery and renewal across the sector, investment has started to be made in supports and approaches which: maximise capacity through new staffing, resources, and services; ensure staff wellbeing; ensure system flow by improving planned discharge from hospital and increasing access to care in a range of community settings; and improve outcomes through collective investment in people, systems, services and supports which deliver the right care in the right setting.
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10 Use of Technology – within a variety of settings The use of technology has expanded considerably over the past three years, and the experience of the Covid-19 restrictions resulted in the acceleration of our plans to use technology more in relation to online appointments and consultations, technology enabled care and also as a key element of our communication and day-to-day management. Mental Health Renewal and Recovery The recovery and renewal of our mental health services continues to progress and the importance of linking these efforts with our new priorities was reflected in engagement discussions and feedback. Challenges Demographic Growth and Demand Health and social care services are experiencing increasing demand due to demographic growth, an ageing population, complexity of care needs, and deprivation. It remains to be seen how detrimental the lasting impacts of Covid-19 will have on our communities, but we project this will result in negative impacts on the health of our residents in the future and subsequently as a direct result, an increase in pressures on our services. Cost of Living Crisis and Widening Inequalities Given the current challenges in relation to the cost-of-living crisis, the wider issues of poverty and income deprivation were highly prevalent in discussions which emerged in our engagement activities. There are significant and persistent inequalities in outcomes across the North Lanarkshire population that have a significant impact on people’s life opportunities and life chances. There is strong evidence to suggest the experience of the pandemic has widened inequalities with some sectors of society disproportionately affected by the disruption and restrictions. The current cost of living crisis will also disproportionately affect those with lower incomes. The volatility of the UK inflation, impacted by the record global energy costs, will present a considerable challenge to the IJB over the short to medium term. Currently at 8.4%, inflation is at one of its highest levels in 30 years far exceeding the Bank of England 2% target. Such pressures will impact on the sustainability of our external providers who will struggle to cope with the rising cost of goods and services, our service users as they battle with the concept of ‘heat’ or ‘eat’ and the IJB directly due to rising costs from providers and increased demand on all services as we continue to help those most in need. Staff Recruitment and Retention The wider health and social care sector have experienced challenges related to the recruitment and retention of staff for some time, with the recent experiences of the pandemic and the withdrawal from the European Union placing further pressure on an already challenging situation. There is a need to invest in the workforce through training and development with clear career pathways, to ensure we make employment within the sector as attractive as possible. Through a values-based approach the HSCP need to offer flexible and positive working environments with an embedded culture of staff wellbeing.
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11 National Care Service The independent review of Adult Social Care recommended the creation of a National Care Service (NCS) and a system of care which took a human right based approach with a focus on incorporating the views of those with lived experience about what needs to change to make real and lasting improvements. The aspirations of the NCS represent a progression from the Scottish Government’s Health and Social Care Delivery Plan and supports their long-standing desire to shift the balance of care and support from hospital to a community care setting. The outcome of this review is currently subject to ongoing consultation and will be used to shape and develop the new legislation, with the intention that the NCS will be fully functioning by the end of the Parliamentary term in 2026. This will impact on the delivery of services and over the next 2 – 3 years, proposed changes will have a direct impact on colleagues working in health and social care resulting in uncertainty and increased work challenges as we prepare for the implementation of the NCS. Our Priorities and Ambitions for 2023/2026 The long-term vision for North Lanarkshire HSCP which was set out in the original Strategic Plan 2016/20262 remains relevant and will continue as our over-arching vision. Our Strategic Commissioning Plan 2023/20263 sets out our commitment to achieve our long-term ambitions. Only by working together, can we bring about real change to improve the overall health and wellbeing for the people of North Lanarkshire. We continue to experience the long-term and lasting impact of the Covid-19 pandemic, whilst working with people to ensure they can access the support and treatment they require following a sustained period of disruption and restriction. This new plan will help to inform financial planning and how we allocate our resources to the programme of work 2023/2026. To enable us to measure how well we are doing, our achievements will be measured and reported against a range of national and local performance measures including the nine national health and wellbeing outcomes below. NATIONAL HEALTH & WELLBEING OUTCOMES People are able to look after and improve their own health and wellbeing and live in good health for longer. People, including those with disabilities or long-term conditions or who are frail, are able to live as far as reasonably practicable, independently and at home or in a homely setting in their community. People who use health and social care services have positive experiences of those services, and have their dignity respected. People who work in health and social care services feel engaged with the work they do and are supported to continuously improve the information, support, care, and treatment they provide. People who provide unpaid care are supported to look after their own health and wellbeing, including to reduce any negative impact of their caring role on their own health and wellbeing. Health and social care services are centred on helping to maintain or improve the quality of life of people who use those services. Resources are used effectively and efficiently in the provision of health and social care services. Health and social care services contribute to reducing health inequalities. People using health and social care services are safe from harm. 2 Strategic Plan 2016-2026 3 Strategic Commissioning Plan 2023-2026
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12 Following our engagement with stakeholders, taking into account the experience of the past three years and the current and future challenges facing the partnership, we have revised our ambitions to the following: Clearly, these priorities are interlinked, and we expect them to influence and shape each other as we progress our implementation. Under each priority area we will develop an agreed set of medium-term goals that we plan to address between 2023 and 2026. The Programme of Work will set out in detail the programmes that will be progressed over the next three years and will be annually updated to ensure that we stay on track, and at the same time, be able to respond to any new or emerging issues that we need to address. We will closely monitor our progress and continue to seek feedback from service users, carers, and families on the impact we are making. Medium Term Financial Plan 2023/2026 The North Lanarkshire IJB Medium to Long Term Financial Plan 2020/2030, outlined the anticipated financial challenges and opportunities that the partnership expected over the ten- year period and provided a framework which would support the partnership to remain financially sustainable. The impact of Covid-19 on health and social care services and the economy created considerable unanticipated pressures, and therefore the partnerships governance arrangements were reviewed and adapted to support the response, and redesign of services. Whilst many of the elements in the previous financial plan remain, the pandemic and ensuing cost of living crisis has accelerated the delivery of some of our objectives, made others increasingly important and lowered the priority of some of our previously agreed actions. Alongside the development of the new Strategic Commissioning Plan 2023/2026, it is consequently necessary to update our supporting plan to a Medium-Term Financial Plan (MTFP). The new MTFP 2023/20264 reflects the impact of recovering from Covid-19 and other challenging factors facing the IJB. It has been condensed to a three-year plan rather than the original ten- year plan due to the pending formation of the National Care Service and the continuing uncertainty around future funding. 4 Medium Term Financial Plan 2023-2026 Strategic Commissioning Plan 2023/2026 Do the right thing first time Increased focus on prevention, early intervention and tackling inequalities Improve mental health and wellbeing Develop and support a workforce for the future Support people through a whole family approach
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13 By linking the MTFP to the plans and actions below, we ensure that consideration is given to all areas of our business, rather than concentrating on standalone objectives: As was the case prior to the pandemic, the IJB’s financial planning arrangements remain subject to active review, to enable us to continue to plan for a range of potential outcomes and scenarios. This helps us to manage emerging financial risks and challenges and the likely impact these could have on the financial position of the IJB. The financial position for public services continues to be challenging and it is therefore important that the IJB’s ambitions are set within the content of the funding available. The aspiration to prepare a balanced budget covering a longer term will support the development of strategic savings plans and ensure the available resources are allocated effectively across competing priorities. This aspiration however is dependent on the certainty of the financial settlement from the Scottish Government. Both partners have a proven track record of managing budgets effectively over many years. A clear strategy is required to ensure the IJB continue to remain financially sustainable over the medium term. The limited financial and workforce resources will require to be focussed on services which are sustainable and are targeted to those with the greatest need. In preparing the financial plan, a co-ordinated and strategic approach across the partnership has been adopted with both partners including the cost pressures in relation to their delegated functions. A range of outcomes will continue to be analysed and the financial planning assumptions updated as the most likely scenarios emerge for future years. The Scottish Government aspiration to move to multi-year settlements in the future is welcome and would reduce the uncertainty which is currently impacting on strategic commissioning activity across the health and social care partnership. Medium Term Financial Plan Reserves Strategy Engaging with Partner Bodies Supporting Transformation Workforce Planning Strategic Commissioning Plan Financial Management and Planning Budget Setting Process
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14 Financial Performance The financial year 2022/2023 has brought a fresh set of challenges including continued recovery from the pandemic, the current cost of living crisis, a changing demographic profile, staffing shortages and increased demand for services. Through regular updates to the IJB from the Chief Finance Officer (CFO) and by ensuring decisions made throughout 2022/2023 were taken to support financial sustainability, the HSCP has successfully managed to deliver year on year financial balance. This has been achieved through a combination of: Flexible use of recurring and non-recurring resources. Creation and use of reserves for specific commitments. Delivery of approved savings through service redesign and removing duplication. Workforce planning and focusing on services that are sustainable in line with our Strategic Commissioning Plan. Implementing a co-ordinated and strategic approach across the partnership. Effective governance and audit controls. Resources Available to the IJB North Lanarkshire IJB delivers and commissions a range of health and social care services to our local population. This is funded through budgets delegated from both NHS Lanarkshire and North Lanarkshire Council. The level of funding available to the IJB is therefore heavily influenced by these organisations grant settlement from Scottish Government. The Scottish Government allocated funding in March 2022 for Covid-19 costs incurred in 2021/2022 and for future years. The balance of the Covid-19 funding at the end of March 2022 was £31.686m which was transferred to a ring-fenced reserve to fund Covid-19 costs in 2022/2023. In September 2022, due to significant changes to Public Health policies in relation to Covid-19, the Scottish Government advised that surplus Covid-19 reserves funding would be reclaimed and redistributed across the sector to meet revised Covid-19 priorities. The Scottish Government reclaimed the Covid-19 reserve balance of £25.916m. This was achieved through a reduction in the Scottish Government funding allocation to the NHSL Health Board in 2022/2023 of £25.916m which was subsequently transferred through to the IJB. The combined recurring and non-recurring budgets available to the IJB in 2022/2023 to take forward the commissioning intention in line with the Strategic Commissioning Plan, is circa £764m. Included within the resources available is a ‘Large Hospital Services’ (Set Aside) budget totalling £69.120m. This budget is in respect of the functions delegated by the Health Board which are carried out in a hospital setting. The Set Aside budget for delegated services provided in acute hospitals is determined by 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 IJB based on postcode.
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15 Summary of Financial Position 2022/2023 Throughout 2022/2023 the CFO financial monitoring report to the IJB projected an underspend, prior to the transfer of year end balances to reserves. The year end underspend totalled £35.495m. Adjustments incurred against reserves in 2022/2023 totalled £57.001m leaving a deficit on the provision of services of £21.506m as shown in the Comprehensive Income and Expenditure Statement on page 26 and Movement in Reserves on page 27. North Lanarkshire HSCP Final Outturn 2022/2023 £m HSCP Underspend as at 31 March 2023 (35.495) Adjustments to Reserves: Drawdown of Reserves for IJB Use COVID-19 Funding Reduction by Scottish Government In Year Adjustment 31.193 25.916 (0.108) Deficit on Provision of Services (Page 25) Movement in Reserves (Page 26) 21.506 The following provides a high-level summary of the key pressures and the main reasons why the IJB’s final outturn resulted in an underspend against its budget in 2022/2023: 25% 9%66% NORTH LANARKSHIRE IJB RESOURCES AVAILABLE 2022/2023 North Lanarkshire Council £188.180m National Set Aside £69.120m NHS North Lanarkshire 506.968m Employee Costs net underspend of £17.377m is in relation to ongoing challenges in terms of recruitment and retention of staff across all service areas. This underspend also includes Scottish Government funding of £8.270m allocated to help address the current staffing pressures. This funding will be carried forward into 2023/2024 within specific ring-fenced reserves to be used in 2023/2024. Payments to Other Bodies net underspend of £1.511m is primarily due to the staff shortages and vacancies within the Care at Home sector who provide services to individuals via the self-directed support commissioning framework. Admin Costs net underspend of £1.431m. This is ring-fenced carers funding that will be transferred to a dedicated earmarked reserve to fund carers pressures in 2023/2024. Mental Health, Alcohol and Drug Partnership and HSCP Planning combined net underspend in non-pays totalling £13.330m. This is due to additional funding received from Scottish Government (£13.141m) which will be carried forward into 23/24 and allocated against new spending plans. Supplies and Services net overspend of £2.531m is due to additional purchases of PPE and staff uniform due to the increase in home support staff and costs associated with winter planning. There has also been additional expenditure in relation to aids and adaptations to meet current demand. £1.550m additional income was drawn down from earmarked reserves to offset some of this overspend and is showing in the over recovery of income.
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16 The cost of services incurred in 2022/2023 is compared to the previous two years in the table below: Reserves Strategy The IJB has the same legal status as a local authority and is therefore able to hold reserves under section 106 of the Local Government (Scotland) Act 1973. A reserve strategy was developed to provide security against unexpected cost pressures and to aid financial stability. The IJB Reserves Strategy 2022/2023 allows for flexibility in terms of potential fluctuations. This allows for the IJB to increase contingency reserve balances significantly where resources permit providing future financial resilience for those years where the level of resources available to the IJB may be significantly constrained and will require a draw down from these reserves in order to deliver financial balance. To protect the financial resilience of the IJB in the context of an increased financial risk profile, the IJB transferred £7.885m from the 2022/2023 in year underspend to contingency reserves. This provides a total contingency reserve of 3% of our financial envelope and aligns to the recommendation in our IJB Reserve Strategy of holding a 3% contingency reserve where possible. The IJB also has committed actions attached to the Strategic Commissioning Plan and funding is therefore earmarked to specific projects to allow spend to be managed in a way that represents best value for the IJB to achieve its national outcomes. It is also important that in year funding available for government priorities are able to be ring-fenced and carried forward into the following financial year. As these funding allocations are to meet specific commitments, they must be carried forward to meet the conditions attached to their receipt. The table below shows the breakdown of the underspend transferred to reserves at year end: 2020/2021 2021/2022 2022/2023 £m £m £m Social Care Services 189.048 202.610 236.972 Health Care Services 65.557 74.073 74.527 Family Health Services 105.773 109.652 115.625 Delegated Services 1.281 2.207 2.437 Hosted Services 141.034 149.126 159.642 IJB Operating Costs 0.212 0.214 0.247 Prescribing Costs 69.088 68.739 71.332 Covid-19 Costs 21.342 13.412 7.072 Set Aside 63.066 65.164 69.120 Income (2.507) (3.800) (4.717) COST OF SERVICES 653.894 681.397 732.256 North Lanarkshire HSCP Services Prescribing net overspend of £1.750m is due to activity and cost per item being 3.19% higher compared to 2021/2022. Due to the uncertainty around costs and prescribing activity, the volatility experienced within prescribing is likely to continue for the foreseeable future. Income over-recovery of £6.031m for Social Care is due to the drawdown of earmarked reserves to offset expenditure relating to winter planning, adaptations, digital and IT and staffing costs.
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17 Risk Management The IJB Risk Management Strategy, which was updated and approved by the IJB in March 2023, complements the existing risk management processes within each partner by ensuring risk reports form a substantial item of business at all IJB meetings. There are three main risk registers across the partnership: IJB risk register outlining the strategic risks to the IJB; Health operational risk register, hosted within the NHS Lanarkshire system; and Social Work operational risk register, hosted within North Lanarkshire Council system. Strong ties have been maintained with the corporate risk managers in both partner organisations and the IJB Risk Management Strategy, has been developed in conjunction with these leads, linking closely to both the North Lanarkshire Council and NHS Lanarkshire Risk Management Strategies. At time of writing, there are currently seventeen open risks identified within our North Lanarkshire IJB Risk Register with two of these risks rated as very high and eight rated as high. The table below shows a summary of these: Category Description of Risk Summary Current Risk Level Financial Financial Challenges: There are a range of financial challenges which will impact on the IJB’s ability to deliver the Strategic Commissioning Plan with the financial envelope available. High Financial Ineffective Governance Arrangements: There is a risk that the IJB is unable to prevent and detect fraud and corruptions within services due to inadequate governance arrangements and internal controls. Low Financial Set-Aside Budget: There is a risk that the resources will not be transferred from Acute Services to the HSCP in line with the shift in the balance of care. High Financial Hosted Services: There is a risk of dispute between the North and South Lanarkshire IJB in respect of the financial allocations underpinning the Hosted Services budget. Medium Financial Prescribing: Prescribing costs may escalate due to the increases in activity and price volatility, new drugs becoming available, the response to Covid-19 and the impact of the EU withdrawal. Very High Financial Third and Voluntary Sector: There is a risk our third sector organisations are vulnerable because of lack of certainty in respect of long-term funding, leading to instability and recruitment and retention challenges. Low Financial Ineffective Governance Arrangements Due to Covid-19 Pandemic: There is a risk that the intensity of the required response to Covid-19 could result in a failure of governance. Medium Performance Oversight of Performance Activity: There is a risk the IJB is not provided with adequate or sufficient performance information to enable it to discharge its scrutiny and oversight role. Low Performance Staff Health & Wellbeing: There is a risk to the delivery of the Strategic Commissioning Plan as a result of sustained pressures on staff availability due to pressures, sickness, and redeployment. High Performance Care Homes: Inability of care homes to sustain service due to staffing or Covid outbreaks resulting in closure to new placements. Medium Analysis of Transfer to IJB Reserves £m Ring-Fenced Reserves 21.411 Earmarked Reserves 6.199 Contingency Reserves 7.885 Total 35.495
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18 Performance Service Sustainability: There is a risk that the IJB will be unable to implement the strategic plan. Failure to achieve the desired IJB strategic aims poses a risk on operational service delivery. High Performance Workforce Sustainability: It is becoming increasing difficult to recruit to particular roles across Health and Social Care. Gaps in the workforce can result in reduction of service provision, increase in staff workload and inability to deliver the strategic plan. High Category Description of Risk Summary (Continued) Current Risk Level Strategic & Performance Children and Adolescent Mental Health Services: There is a risk that the CAMHS service cannot meet the increasing clinical demands due to a significantly high number of staff vacancies and recruitment challenges. High Strategic & Performance Cost of Living: There is a risk that the Strategic Commissioning Plan will be unable to be delivered or not have the desired impact due to the cost-of-living increases being faced by residents. High Strategic & Performance Unscheduled Care: There is a risk that we cannot sustain whole system patient flow through peak winter pressures due to increased front door demand, hospital workforce capacity, delays in onward movement of patients and HSCP workforce capacity. Very High Strategic & Performance Community Alarms: There is a risk the community alarm system will be destabilised due to the national change from analogue to digital telephony by 2025. Medium Strategic National Care Service: The ongoing work around the NCS could destabilise current service delivery due to significant change activity, time demands and staff uncertainty. High Acknowledgements We would like to acknowledge the significant effort required to both produce the annual accounts and successfully manage the finances of the IJB and to record our thanks to the Finance teams in both North Lanarkshire Council and NHS Lanarkshire and colleagues in other services within the Partnership for their continued hard work and support. Brian Moore Vice Chair, North Lanarkshire Integration Joint Board and Chair, North Lanarkshire Integration Joint Board Performance, Finance and Audit. Date: Ross McGuffie Chief Officer Date: Amanda Kilburn FCCA Chief Finance Officer Date:
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19 STATEMENT OF RESPONSIBILITIES Responsibilities of the North Lanarkshire Integration Joint Board The North Lanarkshire Integration Joint Board is required to: Make arrangements for the proper administration of its financial affairs and to ensure that the proper officer of the board has responsibility for the administration of those affairs (section 95 of the Local Government (Scotland) Act 1973). In this IJB, that officer is the Chief Finance 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 (section 12 of the Local Government in Scotland Act 2003). Approve the Annual Accounts. I confirm that these Annual Accounts were approved for signature at a meeting of the North Lanarkshire Integration Joint Board on 18 October 2023. Signed on behalf of the North Lanarkshire Integration Joint Board Brian Moore Date: Vice Chair, North Lanarkshire Integration Joint Board and Chair, North Lanarkshire Integration Joint Board Performance, Finance and Audit.
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20 Responsibilities of the Chief Finance Officer The Chief Finance Officer is responsible for the preparation of the Integration Joint Board’s Annual Accounts in accordance with proper practices as required by legislation and as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (Accounting Code). In preparing the Annual Accounts, the Chief Finance Officer has: Selected suitable accounting policies and then applied them consistently. Made judgements and estimates that were reasonable and prudent. Complied with legislation. Complied with the Local Authority Code (in so far as it is compatible with legislation). The Chief Finance Officer has also: Kept proper accounting records which were up-to date. Taken reasonable steps for the prevention and detection of fraud and other irregularities. 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 2023 and the transactions for the year then ended. Amanda Kilburn FCCA Date: Chief Finance Officer
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21 REMUNERATION REPORT The Local Authority Accounts (Scotland) Regulations 2014 (SSI No. 201/200) require local authorities and IJBs in Scotland to prepare a Remuneration Report as part of the annual statutory accounts. The information in the tables below is subject to external audit. The explanatory text in the Remuneration Report is reviewed by Audit Scotland to ensure it is consistent with the financial statements. Voting Board Members Voting IJB members constitute councillors nominated as board members by constituent authorities and NHS representatives nominated by the NHS Board. The voting members of North Lanarkshire IJB were appointed through nomination by North Lanarkshire Council and NHS Lanarkshire. The regulations require disclosure of remuneration information for ‘relevant’ persons. A ‘relevant’ person in relation to the Remuneration Report 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. The Board Members do not 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 by the partner. Vice Chair vacant from 1 April 2022 to 21 June 2022. Councillor Ayeshah Khan vacated the position of IJB Chair on 30th June 2023. As Vice Chair, Brian Moore is currently Chairing the IJB until the new Chair can uptake post. Taxable Expenses 2021/2022 £ Name Post Held* Nominated by Taxable Expenses 2022/2023 £ IJB Chair (1 April 2021 to 31 March 2022) IJB Chair (1 April 2022 to 21 June 2022) IJB Chair (22 June 2022 to 24 August 2022) IJB Chair (25 August 2022 to 31 March 2023) IJB Vice Chair (1 April 2021 to 31 March 2022) IJB Vice Chair (22 June 2022 to 31 March 2023) - -Cllr Paul Kelly North Lanarkshire Council - Cllr Paul Kelly North Lanarkshire Council - - - - - - - - - Cllr Ayeshah Khan North Lanarkshire Council Brian Moore NHS Lanarkshire Cllr Tracy Carragher North Lanarkshire Council Dr A Osborne NHS Lanarkshire
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22 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. There were no exit packages payable during the financial year. Officers of the IJB The IJB does not directly employ any staff in its own right however specific post-holding officers are non-voting members of the Board. The Chief Officer and the Chief Finance Officer are appointed by the North Lanarkshire IJB and employed by North Lanarkshire Council. Both posts are seconded to the IJB in line with the local arrangements. The senior officers received the following remuneration in the period: M Moy, Chief Finance Officer was also appointed to the South Lanarkshire IJB from 1 April 2021 to 6 May 2022. Therefore, the remuneration disclosed above for this post, is the proportion of remuneration received solely in relation to the activity of the North Lanarkshire IJB. FYE: Full Year Estimate includes an estimate of the full year salary from 1 April 2022 for Amanda Kilburn who started as Chief Finance Officer on 22 August 2022 and a proportion of full year salary to 31 March 2023 for Marie Moy who left as Chief Finance Officer on 6 May 2022. Pay band information is not separately provided as all staff pay information has been disclosed in the information above. 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 pension liability reflected on the IJB balance sheet for the Chief Officer or the Chief Finance Officer. Total Earnings Total Earnings * 2021/2022 2022/2023 £ £ Ross McGuffie Chief Officer 1 April 2022 to 31 March 2023 Marie Moy Chief Finance Officer 1 April 2022 to 6 May 2022 Amanda Kilburn Chief Finance Officer 22 August 2022 to 31 March 2023 - 45,844 (FYE 74,370) Name and Post Title* 102,352 112,098 36,631 3,645 (FYE 38,004)
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23 The IJB however, has responsibility for funding the employee contributions for the current year in respect of the officer time spent fulfilling the responsibilities of their role on the IJB. The following table shows the IJB’s funding during the year to support officers’ pension benefits. The table also shows the total value of the accrued pension benefits which may include benefits earned in other employment positions and from each officer’s own contributions. The pension contribution and benefits for M Moy, Chief Finance Officer relate to the proportion attributable to the activity of the North Lanarkshire IJB based on a pro-rata approach. Brian Moore Vice Chair, North Lanarkshire Integration Joint Board and Chair, North Lanarkshire Integration Joint Board Performance, Finance and Audit. Date: Ross McGuffie Chief Officer Date: For Year to 31/03/2022 For Year to 31/03/2023 As at 31/03/2022 As at 31/03/2023 £ £ £000 £000 Pension 10 12 Lump Sum - - Pension 16 - Lump Sum 22 - Pension - 15 Lump Sum - - Amanda Kilburn Chief Finance Officer - 8,848 Name and Post Title In Year Pension Contribution* Accrued Pension Benefits* Marie Moy Chief Finance Officer Ross McGuffie Chief Officer 21,291 21,635 7,058 365 Description
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24 ANNUAL GOVERNANCE STATEMENT The Annual Governance Statement reports on the effectiveness of the IJB’s governance arrangements and system of internal control and explains how the 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. Scope of Responsibility The IJB is responsible for ensuring that its business is conducted in accordance with the law and appropriate standards, that public money is safeguarded, properly accounted for, and used economically, efficiently, and effectively. The IJB also aims to foster a culture of continuous improvement in the performance of the IJB’s functions and to make arrangements to secure best value. To meet this responsibility, the IJB has established arrangements for governance which includes a system of internal controls. The system is intended to manage risk to support the achievement of the IJB’s policies, aims and objectives. Reliance is also placed on the North Lanarkshire Council and NHS Lanarkshire systems of internal control which support compliance with both organisations’ policies and promotes achievement of each organisations aims and objectives, as well as those of the IJB. This system can only provide reasonable and not absolute assurance of effectiveness. Purpose of the Governance Framework The governance framework comprises the systems and processes, and culture and values, by which the IJB is directed and controlled. It enables the IJB to monitor the achievement of the objectives set out in the IJB’s Strategic Commissioning Plan. The governance framework is continually updated to reflect best practises, new legislative requirements, and the expectations of stakeholders. The system of internal control is based on an ongoing process designed to identify and prioritise the risks in the achievement of the IJB’s objectives, to evaluate the likelihood of those risks being realised, the impact should they be realised, and to manage them effectively. Governance Framework and Internal Control System The IJB comprises of eight voting members, with one from each partner organisation assuming the role of Chair and Vice Chair. Four are Council Members nominated by North Lanarkshire Council and four are Non-Executive Members appointed by NHS Lanarkshire. The term of office is for a period of three years. There are also a number of non-voting professional and stakeholder members on the IJB board. Stakeholder members currently include third sector, carers, staff representatives, service users and professional members including the Chief Officer and Chief Finance Officer. The IJB, via a process of delegation from NHS Lanarkshire and North Lanarkshire Council, has responsibility for the planning, resourcing and operational delivery of all delegated health and social care within its geographical area. The main features of the governance framework are: Principles The IJB follows the principles set out in the Convention of Scottish Local Authorities (COSLA) and the Accounts Commission in 1996 Code of Guidance on Funding External Bodies and
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25 Following the Public Pound for both resources delegated to the IJB, and resources paid to its Local Authority and Health Service partners. Formal Frameworks The IJB is formally constituted through the Integration Scheme agreed by North Lanarkshire Council and NHS Lanarkshire and approved by Scottish Ministers. The IJB operates within an established procedural framework. The roles and responsibilities of board members and officers are defined within standing orders, scheme of delegation and financial governance arrangements which are subject to regular review. The IJB Code of Corporate Governance5 was approved by the IJB on 18 July 2017 which is subject to ongoing updates as required. Board members adhere to an established Code of Conduct and are supported by induction and ongoing training and development. Staff ‘Personal Development Plan’ (PDP) schemes are also in place, the aim of which is to focus on performance and development that contributes towards achieving service objectives. The HSCP has robust structures which are based on service delivery, care and interventions that are person centred, timely, outcome focused, equitable, safe, efficient, and effective. Reports are presented to the IJB throughout the year which provides evidence to demonstrate the delivery of our core components within our frameworks and the Clinical and Care Governance principles specified by Scottish Government. Strategic Planning The overarching strategic vision and objectives of the IJB are detailed in the IJB Strategic Commissioning Plan which sets out the key outcomes the IJB is committed to delivering with its partners. The Strategic Planning Group sets out the IJB’s approach to engage with stakeholders. Consultation on the future vision and activities of the IJB is undertaken with its Health Services and Local Authority partners. The IJB regularly publishes information regarding its performance. The Medium-Term Financial Plan 2023/2026 outlines the financial challenges and opportunities the HSCP faces over the next three years and provides a framework which will support the HSCP to remain financially sustainable. It complements the IJB Strategic Commissioning Plan 2023/2026, highlighting how the financial plan will support the delivery of the IJB’s strategic objectives and priorities. Oversight Effective scrutiny and service improvement activities are supported by the formal submission of reports, findings and recommendations by Inspectorates and the appointed Internal Audit Service to the IJB’s Senior Management Team, the main IJB board and the Performance, Finance and Audit Committee, as appropriate. Performance management, monitoring of service delivery and financial governance is provided by the HSCP to the IJB, who are accountable to both the Health Board and Local Authority. It reviews reports on the effectiveness of the integrated arrangements including the financial management of the integrated budget. This ensures there is a regular scrutiny at senior management, committee, and board level. Information on performance can be found in the Annual Performance Report published on our North Lanarkshire HSCP website6. 5 IJB Code of Corporate Governance 6 Health & Social Care North Lanarkshire Website
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26 Risk Management In line with the continued and ongoing review of the IJB Risk Register, new and emerging risks or changes in risk level are agreed at each Senior Management Team, IJB and PFA meeting as appropriate. The current risks at time of writing are summarised in the Management Commentary on pages 12-13. Financial Control Responsibility for maintaining and operating an effective system of internal financial control rests with the Chief Finance Officer. The system of internal financial control is based on a framework of regular management information, Financial Regulations and Standing Financial Instructions, administrative procedures, including segregation of duties, and management and supervision including delegation and accountability. Development and maintenance of these systems is undertaken by managers within the HSCP supported by North Lanarkshire Council and NHS Lanarkshire in relation to the operational delivery of health and social care services. Transformational Change The Medium-Term Financial Plan and the Strategic Commissioning Plan recognises the need to transform the way in which the HSCP delivers services to ensure the sustainability of health and social care services going forward. Together with the IJB Reserves Strategy, both plans are regularly reviewed over their lifespan, and amended as necessary to reflect the current challenges and pressures the partnership face. Review of Adequacy and Effectiveness Due to the nature of the IJB membership, a conflict of interest can arise between individual board and committee members and the responsibilities they have to the IJB. It is the responsibility of board and committee members to declare any potential conflicts of interest, and it is the responsibility of the Chair of the relevant board or committee to ensure such declarations are appropriately considered and acted upon. The IJB has responsibility for conducting, an annual review of the effectiveness of the system of internal control and the quality of data used throughout the organisation. The review is informed by the work of the Senior Management Team who have the responsibility for the development and maintenance of the internal control framework, the work of the internal and external audit teams and other independent inspectorates. Internal Audit undertake an annual programme following an assessment of risk completed during the strategic audit planning process. The appointed NHS Lanarkshire Chief Internal Auditor in conjunction with the North Lanarkshire Council Chief Officer (Audit and Risk), provide an annual report to the IJB PFA giving an independent opinion of the adequacy and effectiveness of the governance framework, risk management and internal controls. Based on the audit work undertaken directly on behalf of the IJB and being informed by internal audit, work undertaken independently by each respective internal audit function within North Lanarkshire Council and NHS Lanarkshire, the NHS Lanarkshire Chief Internal Auditor and the North Lanarkshire Council Chief Officer of Audit and Risk are able to conclude that a reasonable level of assurance can be placed upon the adequacy and effectiveness of the IJB’s framework of governance, risk management and internal controls. Roles and Responsibilities
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27 The Chief Officer is the Accountable Officer for the IJB and has day-to-day operational responsibility to monitor delivery of integrated services, with oversight from the IJB. The IJB complies with the CIPFA statement on ‘The Role of the Chief Finance Officer in Local Government 2014’. The IJB Chief Finance Officer has responsibility for North Lanarkshire HSCP financial arrangements and is professionally qualified and suitably experienced to lead and advise the IJB finance function. The IJB complies with the requirements of the Public Internal Audit Standards (PSIAS) and the approved Internal Audit Charter for the IJB. The appointed North Lanarkshire IJB Chief Internal Auditor has responsibility for the IJB internal audit function and is professionally qualified and suitably experienced to lead and direct internal audit staff. The Internal Audit service operates in accordance with the CIPFA ‘Public Sector Internal Audit Standards 2017’. Board members and officers of the IJB are committed to the concept of sound internal control and the effective delivery of health and social care services. The IJB Performance, Finance and Audit Committee operates in accordance with CIPFA Audit Committee Principles in Local Authorities in Scotland and Audit Committees ‘Practical Guidance for Local Authorities’. The Committee core function is to provide the IJB with independent assurance on the adequacy of the risk management framework, the internal control environment, the integrity of the financial reporting and governance arrangements. In March 2023, the IJB approved a revision to the IJB Performance, Finance and Audit Committee Terms of Reference, delegating the power to approve the IJB Annual Accounts effective from the financial year 2022/2023 and each year thereafter. The PFA Terms of Reference have been revised to account for this change. An update to the North Lanarkshire IJB Governance Document was approved by the IJB on 17 May 2023 which includes IJB Programme of Reports, Equality Impact Assessment, Code of Conduct and Declaration of Interest, Directions, IJB Risk Reporting Process and Risk Reporting Template7. Action Plan To ensure continual improvement of the IJB’s governance arrangements, the following action plan has been agreed. Also included are improvement areas identified by Audit Scotland within their Annual Audit Report. Regular updates on progress of the agreed actions will be presented to and monitored by the IJB Performance, Finance and Audit Committee. 2021/2022 Ref Improvement Area Agreed Action Responsible Person Date 1 Review of Set-Aside Concept Due to the complexity of the data surrounding this area, it has been reviewed and agreed with the partner that the current process will remain as described in note 2 Critical Judgments and Estimation Uncertainty, until a decision is taken at a national level. Chief Finance Officer Complete 7 North Lanarkshire IJB Governance Document 2023
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28 2 Website Refresh HSCP working group have completed the development of the new IJB website which reflects the current operating model. There is a dedicated team who will take ownership and responsibility for maintaining and updating it. The new website launched at the end of February 2023 with endorsement by the IJB on 22 March 2023. IJB Chief Officer Complete 3 Medium Term Financial Plan The new Medium Term Financial Plan 2023/ 2026 reflects the impact of recovering from Covid-19 and other challenging factors facing the IJB. The plan was approved by the IJB on 22 March 2023 and aligns to the new Strategic Commissioning Plan 2023/ 2026 and the current IJB Reserves Strategy. Chief Finance Officer Complete 2022/2023 Ref Improvement Area Agreed Action Responsible Person Date 1 Completion of previous internal and external audit actions. All external and internal audit actions have been completed apart from the Service Level Agreement (SLA) with Children, Families and Justice. This SLA will be revisited once further clarity has been obtained around what services will be part of the new National Care Service. Progress was reported to the PFA Committee in November 2022 and April 2023. Chief Finance Officer Complete (Pending National Care Service) 2 National Care Service To develop a sound understanding of the impact for the NLHSCP of the outputs of the National Care Service legislation. Due to the uncertainty and lack of detail currently available, the revised date of completion has been moved to March 2024. Chief Officer Updated timescale: March 24 3 Implementation of improvement actions identified in the Best Value Self-Assessment exercise. Both the Strategic Commissioning Plan 2023/2026 and the Medium-Term Financial Plan 2023/2026, approved at the IJB on 22 March 2023, align to strengthen outcomes against resources. By ensuring good practise and lessons learned, both plans have aligned to future funding and reserves to link with outcomes around the improvement actions in the Best Value Self-Assessment exercise. Head of Planning, Performance and Quality Assurance Complete 4 Review the IJBs progress in becoming a Category 1 Responder as set out within the Civil Contingencies Act In conjunction with the Local Resilience Partnership, undertake a self-assessment review against the seven duties, reporting progress to the West of Scotland Regional Resilience Partnership. Report submitted and reviewed by the IJB on 22 March 2023. Chief Officer Complete 5 Accounts Inspection The IJB should ensure it has procedures in place to ensure the accounts inspection advert is published in line with criteria set out in the Local Authority Accounts (Scotland) Regulations 2014. Chief Finance Officer June 2023
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29 6 2022/23 Reserves Strategy The IJB 2022/23 Reserves Strategy was presented and approved by the IJB Committee on 22 March 2023. The Reserves Strategy will continue to be updated in line with the new Strategic Commissioning Plan 2023/2026 and the new Medium Term Financial Plan 2023/2026. Chief Finance Officer Complete 7 Review of Financial Regulations Revised Financial Regulations were approved at the Performance, Finance and Audit Committee on 15 February 2023 and include the services currently delegated by each partner to the IJB and the principal method of accounting for Hosted Services. Chief Finance Officer Complete 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. Overall, the results of the work undertaken to provide assurance include reports produced by External Audit and a range of governance reports undertaken jointly with the partner organisations, to help to inform an opinion on whether the internal controls the North Lanarkshire HSCP has in place are adequate. The joint internal audit opinion is that reasonable assurance can be placed upon the adequacy and effectiveness of the North Lanarkshire IJB’s framework of governance, risk management and internal control. Conclusion and Opinion on Assurance It is our opinion that reasonable assurance can be placed upon the adequacy and effectiveness of the IJB’s governance arrangements. The IJB has adhered to the stated principles of good governance, acted in the public interest, and been committed to continuous improvement. The scrutiny and oversight of the 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. We consider that the internal control environment provides reasonable and objective assurance that any significant risks impacting on the IJB’s principal objectives will be identified and actions taken to avoid or mitigate their impact and are consistent with the recommendations of the CIPFA/SOLACE Framework (2016). Brian Moore Vice Chair, North Lanarkshire Integration Joint Board and Chair, North Lanarkshire Integration Joint Board Performance, Finance and Audit. Date: Ross McGuffie Chief Officer Date:
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30 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 31 MARCH 2023 This statement shows the actual cost of providing services in accordance with generally accepted accounting practices. It includes, on an accrual basis, all expenses and related income. There are no statutory or presentation adjustments which affect the IJB’s application of the funding received from 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. Gross Expenditure Gross Income Net Expenditure Gross Expenditure Gross Income Net Expenditure £m £m £m £m £m £m 202.610 (1.593) 201.017 Social Care Services 236.972 (2.280) 234.692 74.073 74.073 Health Care Services 74.527 74.527 109.652 109.652 Family Health Services 115.625 115.625 149.126 149.126 Hosted Services 10 159.642 159.642 1.668 (1.668) 0.000 Housing Services 1.886 (1.886) 0.000 0.539 (0.539) 0.000 Transport Services 0.551 (0.551) 0.000 0.214 0.214 Corporate Services 6 0.247 0.247 68.739 68.739 Prescribing 71.332 71.332 65.164 65.164 Set Aside for Hospital Acute Services 69.120 69.120 13.412 13.412 Covid-19 Costs 7.072 7.072 685.197 (3.800) 681.397 Total Cost of Services 736.974 (4.717) 732.256 (747.731) (747.731) Taxation and Non-Specific Grant Income 5 (710.750) (710.750) 685.197 (751.531) (66.334) (Surplus) or Deficit on Provisions of Services (Movement in Reserves) 736.974 (715.467) 21.506 2021/2022 2022/2023 North Lanarkshire Health & Social Care Partnership Integration Joint Board Note
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31 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. General Fund Balance Total Reserves £m £m Opening Balance at 1 April 2021 (53.118) (53.118) Total Comprehensive Income and Expendiutre (Increase) or decrease in 2021/22 (66.334) (66.334) Closing Balance at 31 March 2022 (119.452) (119.452) Opening Balance at 1 April 2022 (119.452) (119.452) Total Comprehensive Income and Expendiutre (Increase) or decrease in 2022/23 21.506 21.506 Closing Balance at 31 March 2023 (97.946) (97.946) Movement in Reserves during 2021/2022: Movement in Reserves during 2022/2023: North Lanarkshire Health & Social Care Partnership Integration Joint Board
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32 BALANCE SHEET AS AT 31 MARCH 2023 The balance sheet shows the value of the IJB’s assets and liabilities as at 31 March 2023. The net assets of the IJB (assets less liabilities) are matched by the reserves held by the IJB. The Statement of Accounts presents a true and fair view of the financial position of the North Lanarkshire Integration Joint Board as at 31 March 2023 and its income and expenditure for the year then ended. Notes to the Financial Statements numbers 1 to 14 found on pages 29 – 37, form part of the financial statements. The unaudited accounts were authorised for issue on 21 June 2023. These audited accounts certified by the Chief Finance Officer on 18 October 2023 replace the unaudited accounts. Balance Sheet signed by: Amanda Kilburn FCCA Chief Finance Officer Date: 31 March 2022 31 March 2023 £m £m 119.452 Current Assets Short Term Debtors 7 97.946 - Current Liabilities Short Term Creditors 7 - 119.452 Net Assets 97.946 119.452 Usable Reserves: General Fund 8 97.946 119.452 Total Reserves 97.946 North Lanarkshire Health & Social Care Partnership Integration Joint Board Notes
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33 NOTES TO THE FINANCIAL STATEMENTS Note 1. Significant Accounting Policies General Principles The financial statements summarise the transactions of the IJB for the financial year 2022/2023 and its position at 31 March 2023. 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 2022/2023, 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. The accounts are prepared on a going concern basis, which assumes that the IJB will continue in operational existence for the foreseeable future. The historical cost convention has been adopted. Accruals of Income and Expenditure Activity is accounted for in the year that it takes place, not simply when settlement in cash occurs. 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. Funding The IJB is primarily funded through funding contributions from its statutory funding partners, North Lanarkshire Council and NHS Lanarkshire. 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 and service recipients in South Lanarkshire, for services that are delivered under hosted arrangements and on a pan-Lanarkshire basis. The funding relating to the year under review is recognised as income in the Comprehensive Income and Expenditure Statement and will normally be income added to the General Fund. There are no statutory or presentation adjustments which affect the IJB’s application of the funding received by partners. The movement in General Fund balance is therefore solely due to the transactions shown in the Comprehensive Income and Expenditure Statement. Cash and Cash Equivalents
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34 The IJB does not operate a bank account or hold cash. All 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 therefore no requirement for the IJB to produce a cash flow statement. The funding balance due to or from each funding partner as at 31 March 2023 is represented as a debtor or creditor on the IJB’s balance sheet. Employee Benefit 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. The IJB has a legal responsibility to appoint a Chief Officer. A Chief Finance Officer has also been appointed to the IJB. More details on these arrangements are provided in the remuneration report. The charges for the employing partners are treated as employee costs. Where material, the absence entitlement at 31 March is accrued, for example in relation to annual leave earned but not yet taken. In the case of North Lanarkshire IJB any annual leave earned by the Chief Officer and Chief Finance Officer, but not yet taken is not considered to be material. Provisions, Contingent Liabilities and Contingent Assets Provisions are liabilities of uncertain timing or amount. A provision is recognised as a liability on the balance sheet when there is an obligation on 31 March due to a past event, settlement of the obligation is probable, and a reliable estimate of the amount can be made. Recognition of a provision will result in expenditure being charged to the Comprehensive Income and Expenditure Statement and will normally be a charge to the General Fund. A contingent liability is a possible liability arising from events on or before 31 March, 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. A contingent asset is a possible asset arising from events on or before 31 March, whose existence will only be confirmed by later events. A contingent asset is not recognised in the IJB’s balance sheet but is disclosed in a note only if it is probable to arise and can be reliably measured. Indemnity Insurance / Clinical and Medical Negligence The IJB has indemnity insurance for costs relating primarily to potential claim liabilities regarding board member and officer responsibilities through the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS). North Lanarkshire Council and NHS Lanarkshire have responsibility for claims in respect of the services for which they are statutorily responsible for and that they provide. Unlike NHS Boards, the IJB does not have any ‘shared risk’ exposure from participation in CNORIS. The IJB participation in the scheme is therefore analogous to normal insurance arrangements. Known claims are assessed as to the value and probability of settlement. Where it is material, the overall expected value of known claims taking probability of settlement into consideration, is provided for in the IJB balance sheet.
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35 The likelihood of receipt of an insurance settlement to cover any claims is separately assessed and where material, presented as either a debtor or disclosed as a contingent asset. Debtors and Creditors Financial instruments are recognised in the balance sheet when an obligation is identified and released as that obligation is fulfilled. Debtors are held at fair value and represent funding due from partner bodies that was not utilised in year. There are no creditor balances. 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 2023, the usable reserve balance totals £97.946m. There are no unusable reserves. Specific Service Income Income may be received from individuals as a contribution towards the cost of their social care service. 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 2022/2023 annual accounts have been prepared. Note 2. Critical Judgements and Estimation Uncertainty In preparing the 2022/2023 financial statements, the IJB has had to make certain judgements about complex transactions or those involving uncertainty about future events. The critical judgments made in the annual accounts are: Hosted Services Within Lanarkshire, each IJB has operational responsibility for the services which it hosts on behalf of the other IJB. In delivering these services each 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 ‘principle’, and the full costs are reflected within the annual accounts for the services which it hosts. This is the basis on which North Lanarkshire IJB 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. Note 3. Events After the Balance Sheet Date The Chief Finance Officer authorised the unaudited annual accounts for issue on 21 June 2023. Events after the balance sheet date are those events that occur between the end of the reporting period and the date when the statements are authorised for issue. Where events take place before the date of authorisation and provide information about conditions existing as at 31 March 2023, the figures in the financial statements and notes would be adjusted in all material aspects to reflect the impact of this information. There have been no
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36 material events since the date of the balance sheet which require revision to the figures in the annual accounts. Note 4. Expenditure and Funding Analysis by Nature The following table shows the gross expenditure and funding for North Lanarkshire IJB against subjective headings: Note 5. Taxation and Non-Specific Grant Income The following table shows the funding contribution from the two partner organisations: The funding contribution from the NHS Board shown above includes £69.120m in respect of ‘Set Aside’ resources relating to acute hospital services. 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 and level of demand placed on these resources. Funding to meet the cost of the emergency response to the Covid-19 pandemic was nil in 2022/2023 (2021/2022: £45.098m). Excluded from the funding contribution from the partners above is any specific service income contributions from clients towards the cost of their social care services. In 2022/2023 this 2021/2022 2022/2023 £m £m Social Care Services 202.610 236.972 Health Care Services - Localities 58.073 58.422 Health Care Services - Area Wide 11.010 11.189 Health Care Services - Out of Area 4.990 4.917 Family Health Services 109.652 115.625 Housing Services 1.668 1.886 Transport Services 0.539 0.551 Hosted Services - Led by North IJB 114.573 125.402 Hosted Services - Led by South IJB 34.553 34.240 IJB Operating Costs 0.214 0.247 Prescribing Costs 68.739 71.332 Covid-19 Costs 13.412 7.072 Set Aside 65.164 69.120 Income (3.800) (4.717) Total Cost of Services 681.397 732.256 Partners Funding Contributions and Non-Specific Grant Income (747.731) (710.750) (Surplus)/Deficit on Provision of Services (66.334) 21.506 Expenditure and Funding Analysis by Nature 2021/2022 2022/2023 £m £m Funding Contribution from NHS Lanarkshire (582.943) (523.649) Funding Contribution from North Lanarkshire Council (164.788) (187.101) Total (747.731) (710.750) Taxation and Non-Specific Grant Income
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37 income totalled £2.280m and is presented as gross income in the Cost of Services within the Comprehensive Income and Expenditure Statement on page 26. Note 6. IJB Operating Costs North Lanarkshire Council and NHS Lanarkshire provide a range of support services for the IJB including finance, personnel, planning, audit, payroll, debtor, and creditor services. There is no charge to the IJB for these support services. The costs associated with running the IJB are shown in the following table: Note 7. Short Term Debtors and Creditors At 31 March 2023, North Lanarkshire IJB had short term debtors of £97.946m relating to the reserves held in the Balance Sheet. There were no short-term creditors. Amounts owed by funding partners are stated on a net basis and are classified as short-term debtors on the basis that these reserves could be utilised at any time. Note 8. Usable Reserves: General Fund The purposes of the General Fund are detailed in the IJB Reserves Policy8 and summarised below: Funding received for a specific purpose and not yet spent will be allocated to a ring-fences 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. At 31 March 2023 the IJB created earmarked reserves to support the delivery of projects which span financial years and ring-fenced reserves to enable the IJB to deliver on specific Scottish 8 North Lanarkshire IJB Reserves Policy 2021/2022 2022/2023 £m £m Staff Costs 0.183 0.213 Audit Fees 0.028 0.031 Administration Costs 0.003 0.003 Total 0.214 0.247 IJB Operating Costs (Corporate Services) 2021/2022 2022/2023 £m £m NHS Lanarkshire 87.533 62.180 North Lanarkshire Council 31.919 35.766 Total 119.452 97.946 2021/2022 2022/2023 £m £m NHS Lanarkshire - - North Lanarkshire Council - - Total - - Short Term Debtors Short Term Creditors
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38 Government funded programmes. In addition, the contingency reserve has been increased as part of the financial strategy of the IJB. This will be used to manage the risk of any future unanticipated events and support service provision that may materially impact on the financial position of the IJB in later years. The following table shows how reserves are allocated: Note 9. Related Party Transactions The IJB has related party transactions with North Lanarkshire Council and NHS Lanarkshire. In particular the nature of the partnership means that the IJB may influence and be influenced by its partners. Scottish Government Ring-Fenced Reserves £m £m £m Adult Social Care Winter Preparedness Fund 1.941 -1.941 - Alcohol and Drug Partnership Funding 1.142 2.206 3.348 Blood-Borne Viruses Services - 0.171 0.171 Children and Adolescent Mental Health Services 0.900 3.201 4.101 Community Living Change Fund 1.298 - 1.298 Covid-19 Funding 31.686 -30.915 0.771 District Nursing - Scottish Government Funded - 0.376 0.376 Hospital at Home Services - Support Development - 0.621 0.621 Integrated Authority Support 6.076 -6.076 - Mental Health and Learning Disability Services 0.111 11.179 11.290 North Planning Band 2-4 Posts & Pharmacy Training - 1.106 1.106 Ring-Fenced Reserves - Other Services 2.564 1.931 4.495 Scottish Government Ring-Fenced Reserves Total 45.718 -18.141 27.577 Adult Social Care Winter Preparedness Fund - 1.941 1.941 Carers Act Support 0.580 2.063 2.643 Children and Adolescent Mental Health Services 0.717 -0.371 0.346 Digital and IT Strategy 0.566 5.064 5.630 Earmarked Reserves - Other Services 48.072 -42.809 5.263 Home Support Resilience - 3.498 3.498 Integrated Authority Support - 4.926 4.926 IJB Financial Plan 2023/2026 6.572 2.375 8.947 Long Covid Contingency 3.000 -1.051 1.949 Minor Repair and Replacement Programme of Works 1.387 2.003 3.390 Prescribing Fund 4.361 - 4.361 Social Care Services 3.988 1.228 5.216 Speech, Language and Therapy Services 0.807 -0.807 - Winter Funding Business Case - 5.608 5.608 Earmarked Reserves Total 70.050 -16.332 53.718 Contingency Reserve Total 3.684 12.967 16.651 Total North Lanarkshire IJB Reserves 119.452 -21.506 97.946 Earmarked Reserves USEABLE RESERVES Net Transfers during 2022/2023 Balance as at 31 March 2023 Balance as at 31 March 2022
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39 Non-voting board members are not directly employed by NHS Lanarkshire however, a contribution of 50% of the cost of the Chief Officer is made by NHS Lanarkshire along with the full cost of the Chief Finance Officer. This payment is included in the IJB Operating Costs (Corporate Services) in the Comprehensive Income and Expenditure Statement and detailed at Note 6. 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. The following transactions and balances included in the IJB annual accounts are presented to provide additional information on related party relationships. There are elements of expenditure which are shown against North Lanarkshire Council but where the resource is provided by NHS Lanarkshire. Resource Transfer which includes the Social Care Fund are therefore part of the NHS Lanarkshire budget but are used to deliver social care services supplied by North Lanarkshire Council. Note 10. Hosted Services North Lanarkshire IJB act as the lead for a number of delegated services on behalf of South Lanarkshire IJB. It therefore commissions services on behalf of South Lanarkshire IJB and 2021/2022 2022/2023 £m £m NHS Lanarkshire - - North Lanarkshire Council (3.800) (4.717) Total (3.800) (4.717) 2021/2022 2022/2023 £m £m NHS Lanarkshire 472.132 496.010 Resource Transfer to North Lanarkshire Council 59.679 52.993 NHS Lanarkshire Total 531.811 549.003 North Lanarkshire Council 213.065 240.964 Resource Transfer from NHS Lanarkshire (59.679) (52.993) North Lanarkshire Council Total 153.386 187.971 2021/2022 2022/2023 £m £m NHS Lanarkshire (582.943) (523.649) North Lanarkshire Council (164.788) (187.101) Total (747.731) (710.750) 2021/2022 2022/2023 £m £m NHS Lanarkshire 87.533 62.180 North Lanarkshire Council 31.919 35.766 Total 119.452 97.946 Income Received Expenditure on Services Provided Funding Contributions Received Debtors
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40 reclaims the costs involved. Since North Lanarkshire IJB is acting as ‘principle’ in these transactions, the total gross expenditure and the consequential reimbursement is included in the Comprehensive Income and Expenditure Statement even though 49% of the hosted budget is consumed by South Lanarkshire. Similarly, South Lanarkshire IJB acts as the lead for a number of delegated services on behalf of North Lanarkshire IJB. The value consumed by North Lanarkshire equates to 51% of South Lanarkshire IJB hosted budget. As this expenditure is incurred for the residents of North Lanarkshire, it is included in the Comprehensive Income and Expenditure Statement. North Lanarkshire Services 2021/2022 Consumed by South Lanarkshire 2021/2022 North Lanarkshire Services 2022/2023 Consumed by South Lanarkshire 2022/2023 £m £m £m £m 1.364 0.739 Blood Borne Virus Services 1.535 0.764 7.157 6.097 Children and Adolescents Mental Health Services 11.127 7.193 11.513 5.619 Childrens Services 12.220 6.035 2.216 1.099 Continence Services 2.452 1.177 3.519 1.864 Dietetics Services 3.753 1.996 2.178 1.264 Hospital at Home 2.166 1.277 3.564 1.077 Immunisation Services 2.473 0.940 - 0.278 Integrated Equipment and Adaptation Store - 0.278 68.844 38.312 Mental Health and Learning Disability Services 74.366 41.490 4.045 2.118 Podiatry Services 4.434 2.250 1.724 0.984 Prisoner Healthcare Services 1.908 0.874 2.809 1.442 Sexual Health Services 2.974 1.541 5.640 2.962 Speech and Language Therapy Services 5.994 3.195 114.573 63.855 Total Services Hosted by North Lanarkshire IJB 125.402 69.010 Host: North Lanarkshire Service Consumed by North Lanarkshire 2021/2022 South Lanarkshire Services 2021/2022 Consumed by North Lanarkshire 2022/2023 South Lanarkshire Services 2022/2023 £m £m £m £m 3.758 6.508 Community Dental Services 4.007 7.081 - - Brain Injury Unit 1.396 1.856 2.929 3.960 Diabetic Services 2.649 5.113 - - Improving Cancer Journey 0.024 0.047 5.180 9.057 Occupational Therapy Services 4.350 7.909 4.509 8.126 Out of Hours Services 4.806 9.003 3.770 7.541 Palliative Care Services 3.738 7.412 5.148 9.632 Physiotherapy Services 5.536 10.427 - - Telehealth 0.362 0.319 0.389 0.657 Primary Care Services 0.452 0.810 8.656 7.177 Primary Care Improvement Fund 6.920 10.973 0.214 0.420 Primary Care Transformation Fund - - 34.553 53.078 Total Services Hosted by South Lanarkshire IJB 34.240 60.950 Host: South Lanarkshire Service
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41 The table below shows the total of hosted services included in the Comprehensive Income and Expenditure Statement: 2021/2022 £m Hosted Services 2022/2023 £m 114.573 Total Services Hosted by North Lanarkshire IJB 125.402 34.553 Total Services Hosted by South Lanarkshire IJB 34.240 149.126 Total Included in Comprehensive Income and Expenditure Statement 159.642 Note 11. Additional Council Services Delegated to the IJB The following table shows the costs of North Lanarkshire Council services delegated to the IJB. Under the Public Bodies (Joint Working) (Scotland) Act 2014, the IJB is accountable for these services however, they continue to be delivered by North Lanarkshire Council. HSCP monitor the delivery of these services on behalf of the IJB. Note 12. VAT The IJB is not VAT registered and does not charge or recover VAT on its functions. The VAT treatment of expenditure and income within the accounts depends on which of the partner is providing the service as these bodies are treated differently for VAT purposes: Where North Lanarkshire Council is the provider, income and expenditure exclude any amounts related to VAT, as collected VAT is payable to HM Revenue & Customs and all VAT paid is recoverable from it. On a very limited number of items that North Lanarkshire Council are not entitled to fully recover VAT, expenditure for these specific items will include the full cost to the IJB. Where NHS Lanarkshire is the provider, expenditure will include the full cost to the IJB as generally, NHS Lanarkshire cannot recover VAT. 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. Note 13. External Audit Costs Fees payable to Audit Scotland in respect of external audit services undertaken in accordance with Audit Scotland’s Code of Audit Practice in 2022/23 are £31,470. Audit Scotland did not undertake any non-audit services. Note 14. New Standard Issued but Not Yet Adopted 2021/2022 2022/2023 £m £m 1.668 Housing Services 1.886 0.539 Transport Services 0.551 2.207 Gross Expenditure 2.437 (2.207) Income (2.437) - Net Expenditure - Council Services
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42 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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43 Independent auditor’s report to the members of North Lanarkshire Integration Joint Board and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements I certify that I have audited the financial statements in the annual accounts of North Lanarkshire Integration Joint Board for the year ended 31 March 2023 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet, and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2022/23 (the 2022/23 Code). In my opinion the accompanying financial statements: give a true and fair view of the state of affairs of North Lanarkshire Integration Joint Board as at 31 March 2023 and of its income and expenditure for the year then ended; have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2022/23 Code; and have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. My responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of my report. I was appointed by the Accounts Commission on 2 December 2022. My period of appointment is five years, covering 2022/23 to 2026/27. I am independent of North Lanarkshire Integration Joint Board in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to North Lanarkshire Integration Joint Board. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
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44 Conclusions relating to going concern basis of accounting I have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on Noth Lanarkshire Integration Joint Board’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on North Lanarkshire Integration Joint Board’s current or future financial sustainability. However, I report on the North Lanarkshire Integration Joint Board’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement I report in my Annual Audit Report the most significant assessed risks of material misstatement that I identified and my judgements thereon. Responsibilities of the Chief Finance Officer and North Lanarkshire Integration Joint Board for the financial statements As explained more fully in the Statement of Responsibilities, the Chief Finance Officer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Chief Finance Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Chief Finance Officer is responsible for assessing North Lanarkshire Integration Joint Board’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue North Lanarkshire Integration Joint Board’s operations. North Lanarkshire Integration Joint Board is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
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45 influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. I design procedures in line with my responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: using my understanding of the local government sector to identify that the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of North Lanarkshire Integration Joint Board; inquiring of the Chief Finance Officer as to other laws or regulations that may be expected to have a fundamental effect on the operations of the North Lanarkshire Integration Joint Board; inquiring of the Chief Finance Officer concerning North Lanarkshire Integration Joint Board’s policies and procedures regarding compliance with the applicable legal and regulatory framework; discussions among my audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which my procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of North Lanarkshire Integration Joint Board’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of my auditor’s report.
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46 Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited parts of the Remuneration Report I have audited the parts of the Remuneration Report described as audited. In my opinion, the audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Chief Finance Officer is responsible for the other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited part of the Remuneration Report. My responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In my opinion, based on the work undertaken in the course of the audit: the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016).
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47 Matters on which I am required to report by exception I am required by the Accounts Commission to report to you if, in my opinion: adequate accounting records have not been kept; or the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or I have not received all the information and explanations I require for my audit. I have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to my responsibilities for the annual accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in my Annual Audit Report. Use of my report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. John Boyd Audit Scotland 8 Nelson Mandela Place Glasgow G1 2BT