Agenda Document Pack - Midlothian Integration Joint Board - 19/09/2024
Midlothian Council · 19 September 2024
Back to Midlothian Integration Joint Board — 19 September 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Notice of Meeting and Agenda Midlothian Integration Joint Board Venue: Council Chambers/Hybrid, Midlothian House, Dalkeith, EH22 1DN Date: Thursday, 19 September 2024 Time: 14:00 Morag Barrow Chief Officer Contact: Clerk Name: Democratic Services Clerk Telephone: 0131 271 3160 Clerk Email: democratic.services@midlothian.gov.uk Further Information: This is a meeting which is open to members of the public. Page 1 of 76
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1 Welcome, Introductions and Apologies 2 Order of Business Including notice of new business submitted as urgent for consideration at the end of the meeting. 3 Declaration of Interest Members should declare any financial and non-financial interests they have in the items of business for consideration, identifying the relevant agenda item and the nature of their interest. 4 Minute of Previous Meeting No items for discussion 5 Public Reports 4.1 Chair’s Update – Councillor McManus For Decision 4.2 MIJB Annual Accounts 2023/24 (Final Position) Paper presented by David King, Interim Chief Financial Officer 3 - 76 6 Private Reports No items for discussion 7 Date of Next Meeting The next meeting will be held on Thursday 17th October 2024, 14:00-16:00. Midlothian Integration Joint Board Full Board Meeting. Page 2 of 76
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Midlothian Integration Joint Board Thursday 19th September 2024 2023/24 Audited Annual Accounts Executive summary As a statutory body, the IJB is required to produce a set of annual accounts at the end of its financial year (31 March). These accounts are then reviewed by the IJB’s external auditors who report their opinion of the IJB’s annual accounts to the IJB’s Audit and Risk Committee. The Independent auditors have given the accounts an ‘unqualified’ opinion which means that they meet the requirements of the regulations and give a fair and true view of the IJB’s financial position in 2023/24. The accounts are required to be signed off by 30 September and signed by the Chair of the IJB, the Chief Officer of the IJB, the Chief Finance Officer of the IJB and the Independent Auditor. The Independent Auditor reported her view to the meeting of the IJB’s Audit and Risk committee on 12th September 2024. The IJB’s Audit and Risk committee is satisfied with the report of the Independent Auditor and recommends that the Annual Accounts are approved by the IJB. Board members are asked to: 1. Note the report of the independent auditor 2. Approve the IJB’s annual accounts for 2023/24 # Item number: 4.2 Page 3 of 76
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Midlothian Integration Joint Board Report 2023/24 Audited Annual Accounts 1 Purpose 1.1 The IJB has prepared annual accounts for the financial year 2023/24, these have now been audited by the IJB’s Independent Auditors and the auditors have reported their view to the IJB’s audit and risk committee of 21 September 2024. 2 Recommendations 2.1 As a result of this report Members are being asked to:- • Note the report of the independent auditor • Approve the IJB’s annual accounts for 2023/24 3 Background and main report 3.1 As a body governed by section 110 of the Local Government Scotland Act (1973) and the appropriate regulations and subsequent Acts, the IJB must prepare a set of annual accounts. The accounts must fulfil the requirements of the Act and the regulations and must give a true and fair view of the IJB’s financial position. 3.2 The accounts must then be reviewed by an Independent Auditor who will report their findings to the Audit and Risk committee which will allow the auditors to bring any matters to the committee’s attention. 3.3 In summary the auditor’s report is unqualified - that is that they consider that the accounts meet the regulations and requirements of the Act and that the accounts are a true and fair view of the IJB’s financial position. 3.4 The IJB’s Audit and Risk Committee has received the report of the appointed auditors and recommend that the IJB accepts these Accounts and that the Accounts are signed on the IJB’s behalf by the appropriate members of the IJB. 3.5 The draft unaudited annual accounts for 23/24 were approved by the IJB at its 20h June meeting. As a result of the audit work there have been no materiel changes to that draft although there has been some revision to the text along with the correct of a few typographical and arithmetical errors. 4 Policy Implications 4.1 There are no policy implications from this report. Page 4 of 76
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Midlothian Integration Joint Board 5 Directions 5.1 There are no implications on directions from this report. 6 Equalities Implications 6.1 There are no equalities implications from this report 7 Resource Implications 7.1 There are no resource implications from this report. 8 Risk 8.1 The risks raised by this report are already included within the IJB risk register. 9 Involving people 9.1 The IJB’s annual accounts will be published on the IJB website. 10 Background Papers 10.1 None. AUTHOR’S NAME David King DESIGNATION Interim Chief Finance Officer CONTACT INFO David.king4@nhslothian.scot.nhs.uk DATE September 2024 Appendices: Appendix 1 – Independent Auditors report Appendix 2 – 2023/24 Annual Accounts Page 5 of 76
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Prepared for Midlothian Integration Joint Board and the Controller of Audit September 2024 Midlothian Integration Joint Board 2023/24 Annual Audit Report – Draft Page 7 of 76
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2023/24 Annual Audit Report – Draft| 2 Contents Key messages 3 Introduction 4 1. Audit of 2023/24 annual accounts 6 2. Financial management and sustainability 11 3. Vision, leadership, and governance 16 4. Use of resources to improve outcomes 18 Appendix 1. Action plan 2023/24 20 Page 8 of 76
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Key messages | 3 Key messages 2023/24 annual accounts 1 Audit opinions on the annual accounts of Midlothian Integration Joint Board are unmodified. 2 The unaudited accounts and supporting working papers, including assurance letters from the constituent bodies, were provided within the agreed timescale. However, similar to 2022/23, further working papers were required to enable agreement of social care figures between the unaudited accounts and the ledger. 3 There is scope to improve the narrative in the annual report and accounts. Financial management and sustainability 4 Midlothian IJB returned a planned deficit in 2023/24 and utilised £12 million of reserve funding to commission services from partner bodies. The transfer of £12 million from reserves reduced the overall balance from £13 million at 1 April 2023 to £1 million at 31 March 2024. 5 A medium-term financial strategy is in place which is forecasting a £52 million cumulative budget gap from 2024/25 to 2028/29. Recovery plans have been identified to bridge £10 million of the funding gap for 2024/25 but the IJB is finding it significantly challenging to identify plans to bridge the remaining gap of £42 million. Vision, leadership, and governance 6 Governance arrangements are appropriate and support effective scrutiny, challenge and informed decision making though there is scope to further enhance arrangements. Use of resources to improve outcomes 7 Midlothian IJB has effective arrangements for managing and reporting performance. 8 Good progress has been made in demonstrating compliance with the duty of best value through the new Best Value Framework which will form part of an annual assessment of the board’s Best Value arrangements. Page 9 of 76
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Introduction | 4 Introduction 1. This report summarises the findings from the 2023/24 annual audit of Midlothian Integration Joint Board (Midlothian IJB). The scope of the audit was set out in an Annual Audit Plan presented to the audit and risk committee meeting on 7 March 2024. This Annual Audit Report comprises: • significant matters arising from an audit of Midlothian IJB’s annual accounts • conclusions on the following wider scope areas that frame public audit as set out in the Code of Audit Practice 2021: o Financial Management o Financial Sustainability o Vision, Leadership, and Governance o Use of Resources to Improve Outcomes. • conclusions on Midlothian IJB’s arrangements for meeting its Best Value duties. 2. This report is addressed to the board of Midlothian IJB and the Controller of Audit and will be published on Audit Scotland's website www.audit- scotland.gov.uk in due course. Audit appointment 3. Claire Gardiner has been appointed by the Accounts Commission as auditor of Midlothian IJB for the period from 2022/23 until 2026/27. 4. We would like to thank management, particularly those in finance, for their cooperation and assistance this year and we look forward to working together constructively over the course of the remainder of the five-year appointment. Responsibilities and reporting 5. Midlothian IJB has primary responsibility for ensuring the proper financial stewardship of public funds. This includes preparing annual accounts that are in accordance with proper accounting practices. Midlothian IJB is also responsible for compliance with legislation and putting arrangements in place for governance and propriety that enable it to successfully deliver its objectives. 6. The responsibilities of the independent auditor are established by the Local Government (Scotland) Act 1973, the Code of Audit Practice, and supplementary guidance and International Standards on Auditing in the UK. Page 10 of 76
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Introduction | 5 7. Weaknesses or risks identified are only those which have come to our attention during our normal audit work and may not be all that exist. Communicating these does not absolve management of Midlothian IJB from its responsibility to address the issues raised and to maintain adequate systems of control. 8. This report contains an agreed action plan at Appendix 1. This sets out specific recommendations, the responsible officers, and dates for implementation. Auditor Independence 9. We can confirm that we comply with the Financial Reporting Council’s Ethical Standard. We can also confirm that we have not undertaken any non-audit related services and therefore the 2023/24 audit fee of £33,360 as set out in the 2023/24 Annual Audit Plan remains unchanged. We are not aware of any relationships that could compromise our objectivity and independence. Adding value through audit 10. The annual audit adds value to Midlothian IJB by: • identifying and providing insight on significant risks, and making clear and relevant recommendations • providing clear and focused conclusions on the appropriateness, effectiveness and impact of corporate governance, arrangements to ensure the best use of resources and financial sustainability. • sharing intelligence and good practice identified. Page 11 of 76
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1. Audit of 2023/24 annual accounts | 6 1. Audit of 2023/24 annual accounts Public bodies are required to prepare annual accounts comprising financial statements and other related reports. These are the principal means of accounting for the stewardship public funds. Main judgements Audit opinions on the annual accounts of Midlothian IJB are unmodified. The unaudited accounts and supporting working papers, including assurance letters from the constituent bodies, were provided within the agreed timescale. However, similar to 2022/23, further working papers were required to enable agreement of social care figures between the unaudited accounts and the ledger. There is scope to improve the narrative in the annual report and accounts. Audit opinions on the annual accounts are unmodified 11. The Board approved the annual accounts for Midlothian IJB for the year ended 31 March 2024 on 19 September 2024. As reported in the independent auditor’s report, in my opinion as the appointed auditor: • the financial statements give a true and fair view and were properly prepared in accordance with the financial reporting framework. • the audited part of the Remuneration Report was prepared in accordance with the Local Authority Accounts (Scotland) Regulations 2014. • the Management Commentary and Annual Governance Statement were consistent with the financial statements and properly prepared in accordance with the applicable requirements. Overall materiality was assessed on receipt of the annual accounts as £3.9 million 12. The concept of materiality is applied by auditors to determine whether misstatements identified during the audit could reasonably be expected to influence the economic decisions of users of the financial statements, and hence impact their opinion set out in the independent auditor’s report. Auditors set a monetary threshold when considering materiality, although some issues Page 12 of 76
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1. Audit of 2023/24 annual accounts | 7 may be considered material by their nature. It is ultimately a matter of the auditor’s professional judgement. 13. My initial assessment of materiality was carried out during the risk assessment phase of the audit. This was reviewed and revised on receipt of the unaudited annual accounts and is summarised in Exhibit1. Exhibit 1 Materiality values Materiality level Revised Amount Overall materiality £3.9 million Performance materiality £2.7 million Reporting threshold £0.2 million Source: Audit Scotland 14. The overall materiality threshold for the audit of the annual accounts of Midlothian IJB was set with reference to gross expenditure, which we judged as the figure most relevant to the users of the financial statements. 15. Performance materiality is used by auditors when undertaking work on individual areas of the financial statements. It is a lower materiality threshold, set to reduce the probability of aggregated misstatements exceeding overall materiality. Performance materiality was set at 70% of overall materiality, reflecting a history of no significant matters arising, audit recommendations, adjusted or unadjusted errors. 16. It is my responsibility to request that all misstatements, other than those below the reporting threshold are corrected. However, the final decision on making the correction lies with those charged with governance. Significant findings and key audit matters 17. Under ISA (UK) 260, we communicate significant findings from the audit to the Board, including our view about the qualitative aspects of the body’s accounting practices. 18. The Code of Audit Practice also requires me to highlight key audit matters, which are defined in ISA (UK) 701 as those judged to be of most significance. The significant findings are summarised in Exhibit 2. Page 13 of 76
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1. Audit of 2023/24 annual accounts | 8 Exhibit 2 Significant findings from the audit of the annual accounts Issue Resolution 1. Constituent body working papers The unaudited accounts and supporting working papers, including assurance letters from the constituent bodies, were provided within the agreed timescale. However, similar to 2022/23, further working papers and revisions to the Midlothian Council assurance letter were required to enable agreement of social care figures between the unaudited accounts and the ledger. This led to a delay in the audit process and increasing pressure for the audit team and finance staff to complete the audit by the agreed deadline of 19 September. Additional working papers and a revised assurance letter were provided by Midlothian Council and reviewed by external audit. We are satisfied that the figures in the unaudited accounts have been agreed to constituent bodies ledgers and assurance letters. Recommendation 1 Working papers and assurance letters should be reviewed by management, prior to submission to audit. It is the IJB’s responsibility working with partner bodies, to ensure assurance letters agree to the unaudited accounts and provide sufficient detail to enable external audit to agree the figures to the ledger. (Refer Appendix 1 action plan). Our audit work responded to the risks of material misstatement identified in the annual accounts 19. We have obtained audit assurances over the identified significant risks of material misstatement in the annual accounts. Exhibit 3 sets out the significant risks of material misstatement to the financial statements we identified in the 2023/24 Annual Audit Plan. It also summarises the further audit procedures performed during the year to obtain assurances over these risks and the conclusions from the work completed. Exhibit 3 Significant risks of material misstatement in the annual accounts Audit risk Assurance procedure Results and conclusions 1. Risk of material misstatement due to fraud caused by management override of controls As stated in International Standard on Auditing (UK) 240, management is in a unique position to perpetrate fraud because of management’s ability to override controls that Agreement of balances and transactions to Midlothian Council and NHS Lothian financial reports/ledger and correspondence. Constituent body auditor assurances will be obtained over the completeness, accuracy and allocation of income and expenditure to Midlothian Integration Joint Additional working papers and a revised assurance letter from Midlothian Council were obtained and have been assessed as satisfactory. We obtained satisfactory assurances from the external auditors of NHS Lothian and Midlothian Council. Page 14 of 76
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1. Audit of 2023/24 annual accounts | 9 Audit risk Assurance procedure Results and conclusions otherwise appear to be operating effectively. Board activities included in the annual accounts. Review of year-end transactions and journals. No significant weaknesses in the systems of internal control have been identified that impact on Midlothian IJB. We reviewed adjustments at year end and financial monitoring reports. Conclusion: No incidents of management override of controls were identified. There were no identified misstatements in the audited annual accounts 20. It is our responsibility to request that all misstatements, other than those below the reporting threshold, are corrected. However, the final decision on making the correction lies with those charged with governance considering advice from senior officers and materiality. 21. Our audit identified no misstatements above our reporting threshold. The unaudited annual accounts were received in line with the agreed audit timetable 22. The unaudited annual accounts were received in line with the agreed audit timetable on 21 June 2024. However, there is scope to improve the narrative in the annual report and accounts. The management commentary in the unaudited accounts did not fully tell the story of the IJB, give good performance detail or transparently set out financial information (e.g. detail on use of earmarked reserves and gross expenditure which was include din the prior year accounts was excluded this year). Recommendation 2 The management commentary should be reviewed to ensure it provides a clear summary of performance during the year and transparently sets out financial information. There were no objections to the annual accounts 23. The Local Authority Accounts (Scotland) Regulations 2014 require local government bodies to publish a public notice on their website that includes details of the period for inspecting and objecting to the annual accounts. This must remain on the website throughout the inspection period. Midlothian IJB complied with this requirement and there were no objections to the 2023/24 annual accounts. Page 15 of 76
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1. Audit of 2023/24 annual accounts | 10 Progress was made on prior year recommendations 24. Midlothian IJB has made some progress in implementing and partially implanting two of the four agreed prior year audit recommendations. For actions not yet implemented, revised responses and timescales have been agreed with management, and are set out in Appendix 1. Page 16 of 76
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2. Financial management and sustainability | 11 2. Financial management and sustainability Financial management means having sound budgetary processes, and the ability to understand the financial environment and whether internal controls are operating effectively. Financial Sustainability means being able to meet the needs of the present without compromising the ability of future generations to meet their own needs. Conclusion Midlothian IJB returned a planned deficit in 2023/24 and utilised £12 million of reserve funding to commission services from partner bodies. The transfer of £12 million from reserves reduced the overall balance from £13 million at 1 April 2023 to £1 million at 31 March 2024. A medium-term financial strategy is in place which is forecasting a £52 million cumulative budget gap from 2024/25 to 2028/29. Recovery plans have been identified to bridge £10 million of the funding gap for 2024/25 but the IJB is finding it significantly challenging to identify plans to bridge the remaining gap of £42 million. Work is currently underway at the IJB to map the financial strategy to the Strategic Plan. We carried out audit work in response to risks relating to financial management and sustainability identified in the 2023/24 Annual Audit Plan 25. Exhibit 4 sets out the wider scope risks relating to financial management and sustainability identified in the 2023/24 Annual Audit Plan. It summarises the audit procedures we performed during the year to obtain assurances over these risks and the conclusions from the work completed. Page 17 of 76
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2. Financial management and sustainability | 12 Exhibit 4 Risks identified from my wider responsibility under the Code of Audit Practice Audit risk Assurance procedure Results and conclusions Financial sustainability Midlothian IJB has developed a rolling five-year financial plan for the period 2023/24 to 2028/29. The latest plan is forecasting a cumulative funding gap of £27 million to 2028/29. The latest partner funding levels, cost pressures and inflation figures have been applied in the financial plan but these pressures will continue to present significant challenges to financial planning and the ability of the Integration Joint Board to deliver quality services. We performed a review of the five-year financial plan, providing comment in our Annual Audit Report The cumulative funding gap has now increased significantly to £52 million to 2028/29. Recovery plans have been identified to bridge £10 million of the funding gap for 2024/25 but the IJB is finding it significantly challenging to identify recovery actions to bridge the remaining gap of £42 million. We conclude at paragraph 42 a funding gap of this magnitude, coupled with a very low reserves balance of £1 million presents an increasing risk to financial sustainability and the ability of the IJB to deliver quality services. The 2023/24 budget included contributions of £12 million from reserves 26. The 2023/24 budget was approved by Midlothian IJB in June 2023. The IJB agreed a balanced budget of £152 million based on agreed funding contributions from constituent bodies. During the year additional funding allocations of £35 million were received from the Scottish Government, increasing the annual budget to £187 million. 27. As part of the budgeting process Midlothian IJB approved total contributions of £12 million from reserves (£2 million from NHS earmarked reserves, £4 million from social care earmarked reserves and £6 million from general fund reserves). 28. The transfer of £12 million from reserves reduced the overall balance from £13 million at 1 April 2023 to £1 million at 31 March 2024. 29. The current level of reserves falls below the Midlothian IJB Reserve Policy, approved by members in 2017, which indicates that a general reserve of 2% of net expenditure should be maintained. General reserves are held to provide flexibility where unexpected events or emergencies occur. Looking forward, the reduction in reserves may result in difficult decisions. The IJB may have to commission a lower level of services from partner bodies or may require additional financial support from partner bodies to alleviate financial pressures. Page 18 of 76
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2. Financial management and sustainability | 13 Recommendation 3 Midlothian IJB should ensure reserves are held in line with approved policy. The Board should ensure the policy is reviewed with due consideration of risk and revised if appropriate. Midlothian IJB returned a planned deficit on the provision of services of £12 million in 2023/24 30. Funding levels of £187 million were provided to the IJB in 2023/24 and Midlothian IJB expenditure totalled £199 million for the year. The health budget returned a planned deficit of £4 million and social care returned a planned deficit of £8 million for 2023/24. The deficit was met through planned use of reserves as outlined at paragraphs 26-29. 31. The main overspends in health arose from the cost pressures related to set aside budgets for those functions delegated to the IJB which are managed by the Acute Management Teams at the Royal Infirmary of Edinburgh and the Western General Hospital and from the prescribing budget which was driven by increased demand and demographic pressures. Social care overspends related to inflationary pressures including pay awards, demographic pressures from the fast-growing Midlothian population and associated service changes that have arisen from Covid-19. Exhibit 5 Performance against budget IJB budget summary £ million Cost of Services 199 NHS Lothian Health Care Services 133 Midlothian Council Social Care Services 66 Taxation and Non-Specific Grant Income 187 Deficit on Provision of Services 12 Reserves brought forward 13 Reserves used in year 12 Earmarked Reserves at 31 March 2024 1 Source: Midlothian IJB Accounts Page 19 of 76
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2. Financial management and sustainability | 14 Budget monitoring arrangement were appropriate 32. Budget monitoring reports were submitted to the Midlothian IJB throughout the year. The outturn to date and projected year-end outturn position were clearly stated in these reports, with the actual year-end outturn position being in line with expectations. 33. Through attending committee meetings, we observed that senior management and members receive regular and accurate financial information on Midlothian IJB’s financial position and have concluded the IJB has appropriate budget monitoring arrangements. Financial systems of internal control operated effectively 34. Midlothian IJB does not have any assets, nor does it directly incur expenditure or employ staff, other than the Chief Officer. All funding and expenditure are incurred by constituent bodies and processed in their accounting records. Midlothian IJB does not have its own financial systems and instead relies on the financial systems of its constituent bodies, NHS Lothian and Midlothian Council. 35. As part of our audit approach, we obtained assurances from the external auditors of NHS Lothian and Midlothian Council. The assurances confirmed that there were no significant weaknesses in the systems of internal control for either body which would impact on the IJB. Standards of conduct and arrangements for the prevention and detection of fraud and error were appropriate 36. Midlothian IJB does not maintain its own policies relating to the prevention and detection of fraud and error but instead depends on those in place at its constituent bodies. Midlothian IJB has a Code of Conduct for members and could improve transparency further by making all Members’ Registers of Interest publicly available on Midlothian IJB’s website as currently interests relating only to those members who are also members of Midlothian Council are available. 37. As part of our audit approach, we obtained assurances from the external auditors of NHS Lothian and Midlothian Council. The assurances confirmed that there were no significant weaknesses in the arrangements for the prevention and detection of fraud at either body. Midlothian IJB has an agreed five year financial strategy and work is ongoing to ensure that it is aligned to the Strategic Plan scheduled for publication in April 2025 38. Financial sustainability looks forward to the medium and longer term to consider whether the body is planning effectively to continue to deliver its services or the way in which they should be delivered. 39. Midlothian IJB has an agreed five year financial strategy (MTFS) which is reviewed and refined annually at December Board meetings and is derived from the information provided by the IJB’s partners along with further consideration of the impact of demographic changes and other upcoming pressures such as the Page 20 of 76
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2. Financial management and sustainability | 15 costs of transitions from children’s services to adult services. Work is currently underway at Midlothian IJB to ensure that the MTFS is fully mapped to the Strategic Commissioning Plan. 40. At the beginning of April 2024 the MTFS was forecasting a cumulative budget gap of £39 million to 2028/29. By August 2024, the budget gap was forecast to increase to £52 million, noting that some of the pressures identified are based on indicative costs that require further review and refinement. Recovery plans have been identified to bridge £10 million of the funding gap for 2024/25 but the IJB is finding it significantly challenging to identify recovery actions to bridge the remaining gap of £42 million. 41. A funding gap of this magnitude, coupled with a low reserves balance of £1 million presents an increasing risk to financial sustainability and the ability of the IJB to deliver quality services. It will be increasingly important for the IJB to work with partners to explore all potential actions to move towards financial balance. Page 21 of 76
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3. Vision, leadership, and governance | 16 3. Vision, leadership, and governance Public sector bodies must have a clear vision and strategy and set priorities for improvement within this vision and strategy. They work together with partners and communities to improve outcomes and foster a culture of innovation. Conclusion Governance arrangements are appropriate and support effective scrutiny, challenge and informed decision making though there is scope to further enhance arrangements. Governance arrangements are appropriate and support scrutiny 42. The Midlothian IJB Board met seven times during 2023/24 and the audit and risk committee met five times in the same period. The meetings have been held virtually since 2020 but have now moved to being held in person with the option for members to join virtually. Our observations at committee meetings have found that these are conducted in a professional manner and there is a reasonable level of scrutiny and challenge by members. 43. An annual review of the effectiveness of the governance framework, informed by the work of Internal Audit in 2023/24 identified three areas where further improvements could be made within Midllothian IJB to enhance compliance with the Local Code of Governance. The issues highlighted were: • further developing the MTFS and making a more explicit link to the Midlothian IJB Strategic Plan • ensuring governance arrangements are in place for monitoring against financial recovery plans • improving the publication scheme to ensure that the Register of Interests for members, the Public Engagement Statement and the financial information is accessible through the Midlothian IJB publication scheme. 44. The Annual Governance Statement highlights these issues as improvement actions to be taken forward in 2024/25. 45. We consider that governance arrangements are appropriate and support effective scrutiny, challenge and decision making. Page 22 of 76
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3. Vision, leadership, and governance | 17 Change in Chief Finance Officer 46. The IJB is required to appoint a s95 officer and this role was carried out by the Chief Finance Officer (CFO) in 2023 to the end of September. Following the resignation of CFO at the end of September an interim CFO was appointed from 1 October 2023 and we have been advised that the interim CFO will remain in post until a new permanent CFO is appointed. 47. A permanent CFO is crucial for providing long term strategic vision and leadership. This is particularly important when considering the financial challenges faced by the IJB. The appointment of a permanent CFO should therefore be a priority for Midlothian IJB. Page 23 of 76
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4. Use of resources to improve outcomes | 18 4. Use of resources to improve outcomes Public sector bodies need to make best use of their resources to meet stated outcomes and improvement objectives, through effective planning and working with strategic partners and communities. Conclusion Midlothian IJB has effective arrangements for managing and reporting performance. The Annual Performance Report is expected to be published three months after the required deadline. Midlothian IJB has appropriate arrangements in place for securing Best Value. Performance reporting is regularly monitored throughout the year but overall performance is not detailed in the Management Commentary 48. The Public Bodies (Joint Working) (Scotland) Act 2014 requires Midlothian IJB to produce an annual performance report covering areas such as assessing performance in relation to national health and wellbeing outcomes, financial performance, and best value, reporting on localities, and the inspection of services. The Ministerial Strategic Group for Health and Community Care has agreed a core suite of integration indicators against which all IJBs should report in their annual performance reports. 49. Midlothian IJB Board has continued to monitor key performance throughout the year. The 2023/24 Annual Performance Report is being progressed through the Strategic Planning Group and is expected to be submitted to the board for approval in October 2024 following detailed scrutiny by the Performance Assurance and Governance Group and the Senior Management Team. This will be later than the required deadline of 31 July. Recommendation 4 The IJB should make every effort to publish by deadlines going forward. Page 24 of 76
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4. Use of resources to improve outcomes | 19 50. Underneath the nine National Health and Wellbeing Outcomes sit integration indicators which all Health and Social Care Partnerships use to report their performance. The National Indicators 1-9 are taken from the Health and Care Experience Survey (HACE) which is conducted every 2 years. 2023/24 is a reporting year for the HACE Survey and National survey results are published on the Scottish Government website. Published data shows Midlothian is above the national average for performance in 7 out of 9 of the integration indicators. These indicators can be compared to the Scottish national averages but cannot be compared with previous years data because of changes in the way the Experience Survey commissioned by the Scottish Government was designed. Midlothian IJB has developed a meaningful performance framework 51. Midlothian IJB developed a new Performance Framework in 2022/23 and have built on this in 2023/24 through work on an innovative integrated performance framework across health and social care which is expected to create meaningful outcome focused performance reporting and align strategic aims, national outcomes, operational planning and governance and assurance. Work to date on the integrated framework through outcome mapping has been recognised by a number of bodies, including the Scottish Government and Healthcare Improvement Scotland, as sector leading and pioneering and features as a case study in the July 2024 report prepared by Audit Scotland on Integration Joint Boards – finance and performance. 52. The Audit Scotland report on Integration Joint Boards’ Finance and Performance 2024 was presented to the audit and risk committee meeting in September 2024. Midlothian IJB has appropriate arrangements in place for securing Best Value 53. Integration Joint Boards have a statutory duty to have arrangements to secure Best Value. To achieve this, IJBs should have effective processes for scrutinising performance, monitoring progress towards their strategic objectives and holding partners to account. 54. Midlothian IJB, although previously demonstrating best value in a range of areas including partnership working and performance reporting are currently formalising the mechanism for monitoring and reviewing best value arrangements. The performance outcome map has been mapped to the seven themes of best value and key activities identified. This will shortly be presented to the audit and risk committee to provide assurance in relation to performance against the best value themes and the intention is to include this best value framework within the annual performance report. Page 25 of 76
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Appendix 1. Action plan 2023/24 | 20 Appendix 1. Action plan 2023/24 2023/24 recommendations Issue/risk Recommendation Agreed management action/timing 1. Constituent body working papers The unaudited accounts and supporting working papers, including assurance letters from the constituent bodies, were provided within the agreed timescale. However, similar to 2022/23, further working papers and revisions to the Midlothian Council assurance letter were required to enable agreement of social care figures between the unaudited accounts and the ledger. This led to a delay in the audit process and increasing pressure for the audit team and finance staff to complete the audit by the agreed deadline of 19 September. Working papers and assurance letters should be reviewed by management, prior to submission to audit. It is the IJB’s responsibility working with partner bodies, to ensure assurance letters agree to the unaudited accounts and provide sufficient detail to enable external audit to agree the figures to the ledger (refer paragraph 21 / exhibit 2). Accepted This reconciliation will now be part of the review of the IJB's accounts prior to the preparation of the Annual Accounts. Responsible officer: Chief Finance Officer Agreed date:31 March 2025 2. Management Commentary The unaudited annual accounts were received in line with the agreed audit timetable on 21 June 2024. However, there is scope to improve the narrative in the annual report and accounts. The management commentary did not fully tell the story of the IJB, give good The management commentary should be reviewed to ensure it provides a clear summary of performance during the year and transparently sets out financial information (refer paragraph 22). Accepted the accounts have been updated for the financial position and the MC has been expanded. Responsible officer: Chief Finance Officer Agreed date:31 March 2025 Page 26 of 76
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Appendix 1. Action plan 2023/24 | 21 Issue/risk Recommendation Agreed management action/timing performance detail or transparently set out financial information (e.g. detail on use of earmarked reserves and gross expenditure which was include din the prior year accounts was excluded this year). 3. Financial Management – Reserves Policy The current level of reserves falls below the Midlothian IJB Reserve Policy, approved by members in 2017, which indicates that a general reserve of 2% of net expenditure should be held to cushion financial risk. Financial management will be more challenging without an adequate reserves cushion to support increases in expenditure and reduced funding levels. Midlothian IJB should review its reserves policy to ensure it is up to date and takes in to account the fiscal challenges which the public sector is currently facing (paragraphs 26-29). Partially accepted At this time there is no opportunity to generate further general reserves. The IJB recognises this. A report will be made to the IJB clarifying the current position on reserves. Responsible officer: Chief Finance Officer Agreed date: 31 December 2024 4. Delay in publication of the Annual Performance Report The Board of Midlothian IJB has continued to monitor key performance throughout the year. The 2023/24 Annual Performance Report is being progressed through the Strategic Planning Group and is expected to be submitted to the board for approval in October 2024 following detailed scrutiny by the Performance Assurance and Governance Group and the Senior Management Team. This will be later than the required deadline of 31 July. The IJB should make every effort to publish by deadlines going forward (refer paragraph 48-49). Partially accepted In principle we accept this recommendation on the basis that the legislation is clear about this timescale. However, in practice such a timescale is simply not deliverable. The data to complete the APR is often not available until late July. The APR report then has to be prepared, submitted to the SPG for comment and approval and then submitted to the IJB for comment and approval. This will not be completed until the meeting of the IJB in October 2024. This is not simply a Midlothian issue - we understand that other IJBs share the same challenges Page 27 of 76
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Appendix 1. Action plan 2023/24 | 22 Issue/risk Recommendation Agreed management action/timing with this timeline. We have, and we will continue to discuss these challenges with the Scottish Government Responsible officer: Chief Officer Agreed date:31 December 2024 Follow-up of prior year recommendations Issue/risk Recommendation and agreed action Progress b/f 1. Governance - Transparency The nationally validated PHS Members’ Register of Interests is not accessible to local citizens as it is not published on the Midlothian IJB website. There is a lack of transparency in governance arrangements. The Members Register of interests should be available from the Midlothian IJB website. Original agreed action: Agreed for implementation by Integration Manager by March 2024 but this has only been completed for members who are also members of Midlothian Council. Work in progress The register of interests has been published for all elected members and work is progressing to complete the disclosures for all members of the IJB. Revised action: Agreed for full implementation. Responsible officer: Chief Officer Revised date: 31 December 2024 b/f 2. Changes in Chief Finance Officer The IJB is required to appoint a s95 officer and this role was carried out by the Chief Finance Officer in 2022/23. However, the Chief Finance Officer is due to resign from the IJB and a replacement has not yet been identified for the post. It is crucial that a replacement s95 Officer is appointed to ensure continued financial management arrangements and compliance with the Public Bodies (Joint Working) (Integration Joint Boards) (Scotland) Order 2014 Original agreed action: Agree, interim and future Chief Finance Officer post arrangements for the IJB will be presented to the next IJB Board meeting. Superseded This point has been superseded by events as set out in paragraphs 46-47. Page 28 of 76
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Appendix 1. Action plan 2023/24 | 23 Issue/risk Recommendation and agreed action Progress Original officer / timeline: Chief Officer December 2023 b/f 3. Financial Sustainability Midlothian IJB agreed a 5- year financial plan in December 2022. This plan is projecting a budget gap for the IJB of £12.3 million over the five year period to 2026/27. By February 2023 financial recovery plans were in place to bridge £4 million of the £6 million forecast deficit for 2023/24. To support effective decision making it is crucial that the 5- year financial plan is updated to reflect current funding levels, and the latest cost pressures. Financial recovery plans also need to be identified to bridge any projected budget gap. Original agreed action: Agree, the IJBs financial plan will be updated in line with both Partners financial planning processes and presented to the next IJB meeting. Original officer / timeline: Chief Finance Officer December 2023 Superseded This point has been superseded, please refer to 2023/24 action plan point 3 above. b/f 4. Best Value There is evidence of best value being demonstrated by Midlothian IJB across a range of areas including partnership working and performance reporting, however the mechanism for reviewing and reporting on the arrangements to secure Best Value has not been formalised or published. To demonstrate full compliance with the duty of best value an annual assessment of the board’s Best Value arrangements should be completed with the outcome of each assessment reported to the board. Original agreed action: Agreed, an annual assessment on Best Value in relation to the IJB will be reported. Original officer / timeline: Chief Finance Officer March 2024. Complete Page 29 of 76
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Appendix 1. Action plan 2023/24 | 24 Midlothian Integrtion Joint Board 2023/24 Annual Audit Report Audit Scotland’s published material is available for download on the website in a number of formats. For information on our accessibility principles, please visit: www.audit-scotland.gov.uk/accessibility For the latest news follow us on social media or subscribe to our email alerts. Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 Email: info@audit-scotland.gov.uk www.audit-scotland.gov.uk AS.4.0 Page 30 of 76
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1 Midlothian Integration Joint Board (IJB) Audited Annual Accounts 2023/24 The Annual Accounts of Midlothian Integration Joint Board for the period from 1 April 2023 to 31 March 2024, prepared pursuant to Section 105 of the Local Government (Scotland) Act 1973 and in accordance with the terms of the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2023/24. Page 31 of 76
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2 Contents Audit Arrangements ............................................................................................... 3 Management Commentary ..................................................................................... 4 Statement of Responsibilities ................................................................................ 22 Remuneration Report ........................................................................................... 24 Annual Governance Statement 2023/24 ................................................................. 27 Independent Auditor’s Report ............................................................................... 32 Comprehensive Income and Expenditure Statement ................................................ 37 Movement in Reserves Statement ......................................................................... 38 Balance Sheet ..................................................................................................... 39 Notes to the Financial Statements ......................................................................... 40 Page 32 of 76
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3 Audit Arrangements Under arrangements approved by the Accounts Commission of Local Authority Accounts in Scotland, the auditor with responsibility for the audit of the accounts of Midlothian Integration Joint Board for the period 1 April 2023 to 31 March 2024 is Audit Scotland, 102 West Port, Edinburgh EH3 9DN. Page 33 of 76
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4 Management Commentary Introduction The management commentary considers the work that the Integration Joint Board (IJB) has undertaken during the financial year 2023/24, and then describes the financial performance for the financial year ended 31 March 2024. It provides an overview of the key messages relating to the role, remit, members, objectives, and the strategy of the IJB. The Role and Remit of the Integration Joint Board The IJB is an Integration Authority set up under the Public Bodies (Joint Working) (Scotland) Act (2014). It is a ‘body corporate’, that is a separate legal entity. The IJB is constituted through its Integration Scheme which was prepared by Midlothian Council and NHS Lothian and presented to Scottish Ministers in March 2015. The Integration Scheme was approved by the Scottish Parliament in June 2015 and the first meeting of the IJB took place on 20 August 2015. A review of the Integration Scheme was undertaken during 2022 and approved by Midlothian Council and NHS Lothian in June 2022 and has been approved by the Scottish Government. The IJB’s role and responsibility is to plan for the delivery of the functions that have been delegated to the IJB by Midlothian Council and NHS Lothian. These functions are - • Adult Social Care • Primary Care Services (GP Practices, Community Dentists, Community Pharmacies and Community Opticians) • Mental Health Services • Physical and Learning Disabilities Services • Community Health Services • Community Hospital Services • Unscheduled Care Services (services that are generally delivered from the Royal Infirmary of Edinburgh, the Western General Hospital and St. John’s Hospital). The IJB assumed formal responsibility for these functions in April 2016 including the budgets for the delivery of these functions. The strategic plan of each IJB must be reviewed and approved by the IJB every 3 years. During March and April 2022 the IJB considered and approved its third Strategic Plan which covers April 2022 to March 2025. Page 34 of 76
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5 Membership of Integration Joint Board The IJB met 7 times in 2023/24 for formal business meetings and there was one workshop. The members of the IJB as of March 2024 Member Nominated/Appointed by Role Conor McManus Nominated by Midlothian Council Voting Member, Chair Val de Souza Nominated by NHS Lothian Voting Member, Vice Chair and Chair of the Audit and Risk Committee Pauline Winchester Nominated by Midlothian Council Voting Member Derek Milligan Nominated by Midlothian Council Voting Member Kelly Parry Nominated by Midlothian Council Voting Member Angus McCann Nominated by NHS Lothian Voting Member Andrew Fleming Nominated by NHS Lothian Voting Member Nadin Akta Nominated by NHS Lothian Voting Member Morag Barrow Appointed by the IJB Chief Officer David King Appointed by the IJB Interim Chief Finance Officer Joan Tranent Nominated by Midlothian Council Chief Social Worker Fiona Stratton Nominated by NHS Lothian Chief Nurse Johanne Simpson Nominated by NHS Lothian Medical Practitioner Rebecca Green Nominated by NHS Lothian General Practitioner Grace Chalmers Appointed by the IJB MLC Staff Side Representative Claire Ross Appointed by the IJB Head Allied Health Professional Marlene Gill Appointed by the IJB User Representative Keith Chapman Appointed by the IJB User Representative/Carer Representative Wanda Fairgrieve / Jordan Miller Appointed by the IJB NHS Staff Side Representative Note. Claire Flanagan was the IJB’s Chief Finance Officer until 30th September 2023 when she resigned to take up another appointment. David King has been appointed as interim Chief Finance Officer until a permanent appointment can be made. Page 35 of 76
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6 Integration Joint Board’s Vision and Objectives The IJB’s vision and objectives are laid out in the IJB’s Integration Scheme, and these reflect the nine national health and wellbeing outcomes which apply to integrated health and social care. These are: 1. People are able to look after and improve their own health and wellbeing and live in good health for longer. 2. 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. 3. People who use health and social care services have positive experiences of those services, and have their dignity respected. 4. Health and social care services are centred on helping to maintain or improve the quality of life of people who use those services. 5. Health and social care services contribute to reducing health inequalities. 6. 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. 7. People using health and social care services are safe from harm. 8. 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. 9. Resources are used effectively and efficiently in the provision of health and social care services. The IJB also contributes to the achievement of the national criminal justice outcomes because the Parties have elected to delegate criminal justice social work. Page 36 of 76
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7 The Integration Joint Board’s Operations for the Year 2023/24 The Strategic Plan is delivered through the IJB’s Directions to its partners (Midlothian Council and NHS Lothian). The IJB issued Directions for 2023/24 to the Chief Executives of both partners on 30th March 2023. A report was presented to the IJB at its meeting in September 2023 which updated the IJB on the half year status regarding the delivery of the Directions for 2023/24. This will be considered further as part of the publication of the IJB’s Annual Performance Report which is due to be published by October 2024. Progress in 2023/24 against the delivery of the Integration Joint Board’s goals. 1. Health and Wellbeing – people are able to look after and improve their health and wellbeing and live in good health for longer. The Health Inclusion Team has continued to provide outreach and carried out health assessments with 171 people since April 2023. Most assessments were in the person’s home and the most frequent intervention was in relation to healthcare and lifestyle, followed by advocacy / liaison with / referral to partner agencies. Representation has been provided to a number of key working groups to promote a public health agenda, including the trauma training steering group, Mid & East Lothian Drug and Alcohol Partnership Group, Midlothian Suicide Prevention Group, Equally Safe Strategy Leadership Group, Midlothian will be Healthier Thematic Group, Lothian Green Health Network and the Third Sector Summit. Local and regional efforts have continued within the whole systems approach to Type II diabetes, ensuring alignment with NHS Lothian’s public health priorities and the partnership’s objectives. This has included the evaluation of funded projects to help the people of Mayfield and Easthouses have more access to healthy food options, keep physically active and have more money in their pockets. 2. Living in the Community – People are able to live, as much as possible, independently and at home or in a homely setting. Mental Health services for adults aged 18+ have 33 digital on-line self-help platforms used across the service. Midspace is one example and there has been a 33% increase in access. Page 37 of 76
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8 The national transfer of phone lines from analogue to digital means that all MidCare equipment, including falls alarms, needs to be updated. So far, 35% of this equipment in peoples’ homes has been replaced. 3. Positive Experiences and Dignity – People who use health and social care services have positive experiences of those services, and have their dignity respected. Good progress has been made in relation to our ability to use outcome mapping to better inform service redesign that is person led. The Dietetics hosted service has provided representation to the NHS Lothian Strategic Falls Group and the local Midlothian Community Hospital Falls Group. An initial organisation-wide Frailty Event has taken place with representation and engagement from all relevant service stakeholders, including Head of Primary Care & Older People, Clinical Director, Chief Nurse and Chief Allied Health Professional. All staff working in Community Justice have been trained to Level 2 Trauma (National Education for Scotland), and all Adult Support and Protection and Duty staff have completed Level 1 Trauma training. It should be noted, and this applies to goals 4 and 5 below, that the externally produced, fully validated indicators are not available at the time of the preparation of these accounts. However, all of this information will be available in the IJB’s Annual Performance Report for 2023/24 which will be approved by the IJB at its October 2024 meeting. 4. Quality of Life – Health and social care services help to maintain or improve the quality of life of people who use those. A number of services have collated feedback from patients and relatives on their experiences including: • The wards and Allied Health Professionals within Midlothian Community Hospital – looking at experiences of care and rehabilitation. • Highbank Intermediate Care Facility – looking at respite. • Occupational Therapy and Physical Disabilities service – looking at the impact of their service. People have fed back that even a small piece of equipment or change to their home environment can make a huge difference to the quality of their life. Page 38 of 76
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9 • Mid & East Lothian Drug and Alcohol Partnership – looking at prevention, children and families services, treatment service and recovery. • All Mental Health services, CAPS Advocacy, substance use services VOCAL – looking at Medication Assisted Treatment standards, and trauma-focused support. • The Duty Social Work Team – looking at experiences of all people in contact with them. • Community Justice – looking at experiences of community-based sentences. • Spring Service and women who are supported as part of the Caledonian system – looking at their experience of support. • The Care at Home team – looking at experiences of people with a package of care. • The 0-5 Immunisations Service – looking at experience of the winter Flu campaign. • The Health Visiting service – looking at experiences of care. • The Dietetics hosted service – looking at experience of patients newly discharged on home enteral feeding. • Musculoskeletal Physiotherapy and General Practice Advanced Practice Physiotherapists – looking at patient experience. 5. Health Inequalities - Health & social care services contribute to reducing health inequalities. Following Midlothian’s lead role in the pan-Lothian efforts to improve data visualisation, improved mechanisms have been put in place that allow increased disaggregation of NHS data, including the ability to better understand the impact of economic deprivation. 6. Support for Carers - People who provide unpaid care are supported to look after their health and wellbeing. A new model of respite has been introduced at Highbank Intermediate Care Facility to meet the changing needs of people who require support, and their unpaid carers. To date, 13 referrals have resulted in 16 respite bookings. The Duty Social Work Team have continued to work with colleagues and Vocal to identify and support unpaid carers. Within this quarter there were a total of 64 referrals received with the reason for making contact noted as ‘Carer Stress’. Page 39 of 76
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10 An initial meeting was held between Carer and Home First Service Leads to connect the relevant Health and Social Care Partnership, Health and Voluntary Sector partners to take forward mapping/planning, establishing stakeholders, services, processes and timescales involved in the discharge process, to re-establish referral pathways and connections. Work has started to scope the feasibility of a cooperative to support carers in Midlothian. Key stakeholders have met to understand and establish priority focus areas as part of this scoping exercise and to agree a timeline. 7. Safe from Harm - People using health & social care services are safe from harm. The Adult Support and Protection Team have undertaken a range of duties to identify, minimise and manage risk and ensure that all suspicions, disclosures or incidents of actual harm are acted upon. Health Visiting have engaged in appropriate activity to ensure the safety of mothers of children under 5 years who are at risk of harm. This included ensuring the Equally Safe Strategy, and the NSPCC Harmful Sexual Behaviours Framework and Action Plan, are all in place. Within Substance Use services, the percentage of people commencing treatment within 21 days of referral reached 100% at the end of 2023/24. The Pharmacy Service has established Medicine Reconciliations support to all Midlothian GP practices to ensure safe, effective and timely access to medicines. The locally designed hub model has increased Immediate Discharge Letter (IDL) output from the Pharmacy team by 323% from 2021/22. 100% of IDLs are now completed by pharmacy, with 97% completed within the 48-hour target turnaround time. 8. Workforce - Staff are engaged with their work and are supported to continuously improve the information, support, care and treatment they provide. iMatter is the survey used to capture and measure Health and Social Care Partnership (HSCP) staff engagement levels. The survey is run on an annual basis in July. Midlothian HSCP has increased iMatter Employee Engagement Scores over the last three years. Response rate to iMatter Employee Engagement Scores Page 40 of 76
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11 Year Response Rate Employee Engagement Rate Action Plans Agreed 2023 55% 80 69% 2022 48% 78 35% 2021 50% 77 2% Response rates for 2023 were higher than during the previous two years, and work has continued in 2023/24 to achieve the response rate target of 60%. Examination across all domains described in the 2023 Midlothian HSCP Directorate report has helped identify opportunities for targeted action to improve staff engagement and wellbeing. We have completed a full review of the functionality, effectiveness and uptake of Health and Social Care specific LearnPro modules. The ‘Haven’ staff wellbeing space has opened on site. The Soup Stop (this being a drop-in facility at Midlothian Community Hospital for HSCP staff support by donation) has continued to play a key role in supporting staff wellbeing, with over 200 staff benefitting. Between April and September 2023, a consultative and collaborative process was undertaken to establish the governance structure of the Midlothian Integrated Workforce Governance Board which commissions and oversees the work of two Subgroups: Workforce Planning (Access and Demand) and Staff Engagement (Staff Governance & Development). The Midlothian Integrated Workforce Governance Board has provided oversight of the work required to deliver the HSCP Integrated Workforce Plan 2022-25. This strategic workforce plan forms a key part of the work to align strategic, financial, and operational plans to ultimately support the delivery of right staff, in the right place, at the right time, within budget. The iMatter survey results for 2024 are not available at the time of the preparation of these accounts. 9. Use of Resources - Resources are used effectively and efficiently. All services have attended a series of three Financial Recovery Workshops hosted by Midlothian Health and Social Care Partnership with support from NHS Lothian’s Sustainability & Value Team. All services were required to submit Financial Recovery Templates. Page 41 of 76
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12 Ongoing work has continued to connect the strategic and financial ambitions of the IJB, to operational strategic and financial planning, through Midlothian HSCP’s Operational Transformation Group, alongside Midlothian HSCP’s Finance and Performance Group. Examples of work already completed / currently underway include the Midlothian Bed- Based Care Review, the redesign of Home First, and a review of the strategy and vision for Newbyres Care Village. The Tableau Dashboard that provides management data relating to emergency / unscheduled care has been further developed and can now be fully interrogated at Health and Social Care Partnership (HSCP) level (including SIMD filters). Pan-Lothian work has continued to improve the quality and consistency of protected characteristic cohort data. The 0-5 Immunisations Midlothian data has shown an uptake rate of 61.5% for seasonal flu, compared to a 54.2% pan-Lothian update (Midlothian has the highest uptake across the Lothians). The Health Visiting service has worked alongside data analysts to build a way of linking assessments over time to demonstrate effective early intervention. Outcome Mapping Outcome Mapping is used to understand how our services contribute to our strategic aims and the outcomes that matter to people. The Outcome Mapping approach was developed by our partners, Matter of Focus and the bespoke design and architecture for Midlothian Health and Social Care Partnership was designed by the Planning and Performance team. Each ‘stepping-stone’ of the outcome map framework includes a set of success criteria aligned to the Care Inspectorate joint inspection framework. The outcome map is colour- coded to show an evaluation of the extent to which the service is making progress towards personal outcomes and confidence in how strong the evidence is to support that progress rating. This results in a two-factor rating system for each stepping-stone in the outcome map. Midlothian IJB has been asked to share this work with Audit Scotland, Healthcare Improvement Scotland (HIS), the Blavatnik School of Government at Oxford University, the Scottish Government team developing the National Improvement Framework for Adult Social Care and Community Health and most recently the team developing a new improvement framework for health that will support person centred care. Governance The IJB has continued to review and update its governance during the financial year ensuring that the IJB’s Strategic Plans are fully compliant with best practice and the Scottish Page 42 of 76
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13 Government’s latest guidance. The following were presented to and agreed by the IJB during the year: • April 2023 – Mainstreaming Equalities Report and Action Plan 2023-25 • June 2023 – Integrated Impact Assessment Process Review • August 2023 - Governance Plan • December 2023 – Scheme of Publication • February 2024 – Self-Improvement development plan The IJB has moved from holding its meetings virtually to a hybrid model where the meeting is held face to face but members may join virtually if they wish. Plans for next year and beyond. Reflecting on the current challenging financial position, the IJB is not proposing to issue a new set of Directions in 2024/25 to allow the IJB and the partners further time to consider the impact of the current overall financial position. The Directions will clearly reflect the IJB’s budget setting actions ensuring that the partners understand that these have to be delivered. During the financial year (2024/25) financial reporting and planning will be progressed with the ambition of moving towards a balanced five year financial plan. This work will be part of the review of the IJB’s Strategic Commissioning Plan to ensure that the IJB’s financial plan will clearly articulate, in financial terms, how the IJB’s Strategic Commissioning Plan will be delivered. The IJB’s partners (Midlothian Council and NHS Lothian) also have a range of significant financial challenges in 2024/25 and thereafter, and the IJB will continue to work closely with the partners to review and revise the Strategic Commissioning Plan and its operational delivery through its Directions. Page 43 of 76
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14 Integration Joint Board’s Financial Performance in 2023/24 For the year ending 31 March 2024 the IJB recorded a deficit of £12,358,000. That meant that costs incurred in delivering the IJB’s functions by Midlothian Council and NHS Lothian were greater than the income received from those partners in the financial year. The IJB has used its reserves to underpin this deficit and has broken-even in the financial year. Summary of the IJB’s financial position for the year ending 31 March 2024 Year-end Position Health £000’s Social Care £000’s Total £000’s Income £129,168 £57,416 £186,584 Income received from the partners Midlothian Coun- cil and NHS Lothian in 2023/24 Expenditure £132,906 £66,036 £198,942 Expenditure incurred by the partners in the delivery of the IJB’s delegated functions for 2023/24. Surplus/ (Deficit) -£3,738 -£8,620 -£12,358 Planned Use of reserves £1,497 £4,679 £6,176 The IJB carried funding from 2022/23 which it planned to use in 2023/24 through its reserves. This funding has been used as planned in 2023/24. Unplanned Use of reserves £2,241 £3,941 £6,182 At this point the IJB still was in deficit. The IJB has therefore used the entirety of its available reserves to achieve break-even in 2023/24. Position at Year end £0 £0 £0 During the financial year 2023/24 the IJB has an in-year deficit in both its health and social care functions. The deficit in the health services is being driven by pressures within GP prescribing services as a result of increased demand, and within the costs of the functions delegated to the IJB delivered in Acute Hospitals (The Royal Infirmary of Edinburgh and the Western General hospital) also as a result of increased demand. Within the IJB’s social care services, pressures are largely due to increased demand although there were also funding issues in year. The funding issues are discussed further below. There is an impact in both the IJB’s Health and Social Care budgets from the recent Covid 19 pandemic. The pandemic has increased the costs of the delivery of both social care and health services but there has not been any additional funding to support this pressure. Page 44 of 76
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15 Funding for the Integration Joint Board The IJB is funded exclusively by its partners – Midlothian Council and NHS Lothian. The funding is to support the delivery of the functions that the partners have delegated to the IJB. For the sake of clarity, these functions are now called ‘services’. NHS Lothian’s funding is split into three broad areas – • Core Funding – this is funding for health services delivered directly in Midlothian. This includes the running costs of the local hospitals, the community health services, the running costs of the Medical General Practitioners services (the local GPs) and a share of other primary care services (General Ophthalmic Services, General Dental Services and General Pharmaceutical services). • Hosted Funding – the funding for the Midlothian Share of services delivered and managed on a pan-Lothian basis by NHS Lothian. For example Mental Health in- patients beds at the Royal Edinburgh Hospital. • Set Aside Funding – this is a budget ‘set aside’ by NHS Lothian on behalf of the IJB representing Midlothian’s share of delegated unscheduled care services managed by NHS Lothian’s Acute Services and delivered at the Royal Infirmary of Edinburgh, the West General Hospital and St. John’s Hospital at Howden. Midlothian Council’s funding is for the delivery of Adult Social Care services. Budget offers (representing the funding) are made to the IJB by the partners prior to the start of each financial year. The IJB then assesses these offers and bases its acceptance of these offers on the guidance from the Scottish Government which it issues as part of its own budget setting process. At its March 2023 meeting the IJB accepted the indicative budget offer from NHS Lothian but did not accept the budget offer from Midlothian Council, on the basis that it did not meet the criteria laid out by the Scottish Government guidance. After further discussions the Council was unable to amend its offer and the IJB then accepted the position but had to deliver further savings plans to address the shortfall. Reserves There has been a very significant reduction in the IJB’s reserves during the financial year from an opening balance of £13.1M at 1 April 2023, to a closing balance of £0.8M as at 31 March 2024. Of this reduction in reserves, £6.2M was planned - these reserves had been carried forward from the previous financial year to support ‘earmarked’ projects in 2023/24. A further £6.2M of available reserves was required to be used to underpin the IJB’s financial position in year. The IJB has a reserves policy with the intention to hold an available reserve (a general reserve) of c. 2% of its net expenditure. The resolution to the 2023/24 financial position means that the IJB now has no available reserves. This creates an additional financial risk to the delivery of the 2024/25 financial position. Page 45 of 76
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16 Integration Joint Board spend in 2023/24. Analysis of the Financial Statements The Financial Statement are all presented on a net basis. The table below lays out the performance of the services that are delegated to the IJB for 2023/24 Health Social Care Health Social Care Variance Note Budget Budget Expendi- ture Expendi- ture £000’s £000’s £000’s £000’s £000’s Direct Midlothian Services Community AHPS £3,504 £3,437 £67 Community Hospitals £7,967 £7,933 £34 District Nursing £8,649 £8,700 -£51 General Medical Services £17,956 £18,040 -£84 Health Visiting £2,623 £2,683 -£60 Mental Health £3,039 £3,379 -£340 Other £5,201 £8,013 -£2,812 1 Prescribing £21,195 £21,917 -£722 Resource Transfer £6,928 £6,928 £0 2 Older People £25,451 £30,816 -£5,365 Learning Disabilities £19,166 £22,424 -£3,258 Mental Health £1,205 £1,049 £156 Physical Disabilities £3,917 £4,224 -£307 Assessment & Care Manage- ment £3,972 £3,902 £70 Social Care Other £3,705 £3,621 £84 3 Midlothian Share of Pan Lo- thian Set Aside £22,784 £24,328 -£1,544 4 Mental Health £3,249 £3,379 -£130 Learning Disabilities £1,430 £1,419 £11 GP Out of Hours £1,358 £1,358 £0 Rehabilitation £1,011 £879 £132 Page 46 of 76
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17 Sexual Health £824 £815 £9 Psychology £1,681 £1,515 £166 Substance Misuse £592 £574 £18 Allied Health Professions £1,740 £1,682 £58 Oral Health £963 £862 £101 Hosted Other £4,143 £4,070 £73 Dental £6,198 £6,198 £0 5 Ophthalmology £1,964 £1,964 £0 5 Pharmacy £4,169 £4,169 £0 5 Sub Totals £129,168 £57,416 £134,242 £66,036 -£13,694 NHS reserves adjustment -£1,336 £1,336 6 Per Annual Accounts £129,168 £57,416 £132,906 £66,036 -£12,358 Notes 1. Other includes £4.816m for the Social Care Fund which is held in the Health Budget but expended in the social care services. It also includes £1.336m of funds held by NHSiL on behalf of Midlothian Council, this is further explained in note 6 below. 2. Resource Transfer are funds for specific purposes which are transferred from health to social care. However, these remain part of the health budget and are reported there. 3. Social Care Other includes care for non-specific groups, substance misuse services and other management and performance costs. 4. Set Aside are the budgets for those functions delegated to the IJB which are managed by the Acute Services management teams within NHS Lothian. These services are: ▪ Accident and Emergency ▪ Cardiology ▪ Diabetes ▪ Endocrinology ▪ Gastroenterology ▪ General Medicine ▪ Geriatric Medicine ▪ Rehabilitation Medicine ▪ Respiratory Medicine ▪ Various ancillary support services for the above These services are delivered at the Royal Infirmary of Edinburgh, the Western General Hospital and St. John’s Hospital. 5. In the Health system, expenditure to support the delivery of community dentistry, community opticians and community pharmacists is termed as ‘non-cash limited’ (NCL) but is clearly part of the delivery of primary care services and these functions are delegated to the IJB. However, being NCL there is no budget as such, but any expenditure incurred is supported in its entirety by the Scottish Government. The NCL values are not Page 47 of 76
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18 part of the budget setting process, there being no budget, but NHS Lothian has matched the NCL expenditure with income to cover this expenditure. 6. NHS Lothian is not able to hold reserves as such in its ledger. However, at the end of the financial year, £1.336m of funds were held by NHS Lothian on behalf of the IJB. These funds were transferred to Midlothian Council to support the social care position. Thus, although these are shown as expenditure, these funds are not expenditure and have therefore been removed. The charges (shown as expenditure above) made by Midlothian Council to the IJB are the net direct costs incurred in the delivery of social care services in Midlothian. The charges from NHS Lothian are based on the health budget setting model as agreed by the IJB. That is, charges for the core services (those services specifically for and delivered by the Midlothian partnership) are based on the net direct actual costs incurred in Midlothian. However, charges for hosted and set aside services (those services which are not generally managed by the Midlothian Health and Social Care Partnership and are delivered on a pan-Lothian basis) are based on the total actual costs for these services shared across four IJBs per the budget setting model. The IJB share of the total actual costs incurred in 2023/24 for hosted services is 10% and, generally, 10% of the Lothian element of the set aside budgets and the non-cash limited budgets. The chart below shows how the IJB has spent its funds in 2023/24 in the following areas – • Adult Social Care (note this includes funds from NHS Lothian which are used to support social care – this is laid out in note 6 to the annual accounts below) • Primary Care Services (GPs, GP prescribing, community opticians, community pharmacists and community dental services) • Other Community health services (local community hospitals, community nursing services, community allied health professionals and Midlothian’s share of pan- Lothian hosted services) • Acute Services (Midlothian Share of those Acute services that have been delegated to the IJB) Page 48 of 76
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19 Consideration of the 2024/25 financial position The IJB has developed a five year financial planning model. At its December meeting an indicative five year plan is produced, and this is then revised and used as part of the budget setting process for the next financial year. At its December 2023 meeting a five year plan was presented to the IJB which showed a significant financial challenge in 2024/25. This 2024/25 forecast was then revised over the next three months and series of workshops were held with the IJB to consider recovery actions that could be delivered in 2024/25 to bring the financial forecast back into balance. At its March 2024 meeting the IJB accepted the budget offers from both partners and set a balanced financial plan for 2024/25. This plan is based on the delivery of £10.1m of recovery actions in both health and social care. This overall financial pressure was driven by: • Recovery actions to bring the projected overspends in the operational services back to break-even. This is clear from the financial challenges in delivering a balanced financial position in 2023/24 as described above. • Further efficiency programmes to address future 2024/25 financial pressures driven by increasing demand and projected funding shortfalls. • The IJB had planned to support further development and planning work using its general reserve over the next 3 years. Given that the general reserves had to be utilised in their entirety, this plan now needed to be amended. Adult Social Care, 36.6% Primary Care, 26.3% Other Community, 24.9% Acute, 12.2% Spend in year Percentage Page 49 of 76
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20 The 2024/25 recovery actions can be split into four main elements, the values against each below being the forecast financial pressures – 1. Actions to manage the financial pressure with the IJB’s Set Aside budget (£1.2m). The IJB will work with NHS Lothian and the other IJB’s in the Lothian to jointly manage this pressure. 2. Actions to manage the financial pressures within the IJB’s health budgets (£3.3m). This will be delivered through improved financial management (£2.1m, the largest element of which being plans to manage the projected overspend in GP prescribing) and reviews of the community teams staffing and skill mix (£1.2m). 3. Actions to manage financial pressures with the IJB’s social care budgets (£5.2m) This will be delivered through improved financial management (£1.6m) and four major reviews – review of the provision of client transport, a recovery plan Newbyres Care Home, a review of the commissioning of care from external providers and a change to the mix of care being provided by HSP staff directly and through external provision (total £3.6m) 4. A review of the staffing proposals for the investment in additional planning and support which had been planned to be funded through the IJB’s general reserves (£0.4m) The IJB has asked the partners to provide monthly financial updates and will monitor the 2024/25 financial position closely. Additional efficiency programmes will be required if a break-even position is not being forecast. The IJB will continue to revise its current finance year financial plan with a view to delivering a further formal five year plan in December 2024. Key Risks, challenges and uncertainties The main financial pressures remain in line with those in the 2022/23 annual accounts: • A growing and ageing population Midlothian’s population is now the fastest growing in Scotland. Although, in theory, national funding models for both Local Authorities and the NHS are designed to reflect population growth these models are constrained by: • The total funding available, which has increased but not sufficiently to manage the pressures identified. • Where population numbers reduce this does not necessarily reduce the costs of delivering services and it is difficult to move funds round the system. In addition the average age of the Midlothian population is projected to increase. As people live longer inevitably their health and social care needs increase and this demographic pressure is a national challenge to all IJBs. Page 50 of 76
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21 • The lack of an available workforce Both health and social care services are experiencing a shortage of care professionals. The IJB has developed a workforce plan in collaboration with its partners but tackling this issue is also a challenge nationally. • The challenging national financial landscape In setting its 2024/25 budget the Scottish Government recognises a significant financial challenge ahead for all public services notwithstanding its ambition to protect health and social care services as much as it can. • National Care Service The Scottish Government is in the process of setting up a National Care Service (NCS) which will include many of the functions currently delegated to the IJB. The Bill setting up the national care services is currently at Stage 2 (where MSPs can propose changes to the Bill). It is not currently clear what the impact of the NCS will be on the IJB nor the timescales for any changes to take place. Conor McManus IJB Chair. Morag Barrow, Chief Officer. David King, Interim Chief Finance Officer. Page 51 of 76
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22 Statement of Responsibilities Responsibilities of the Integration Joint Board The Integration Joint Board is required to: • Make arrangements for the proper administration of its financial affairs and to secure 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 authority, 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 Audit & Risk Committee. Signed on behalf of Midlothian Integration Joint Board. Conor McManus, IJB Chair. Page 52 of 76
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23 Responsibilities of the Chief Finance Officer The chief finance officer is responsible for the preparation of the IJB’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 (the 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 the financial statements give a true and fair view of the financial position of the Midlothian Integration Joint Board as at 31 March 2024 and the transactions for the year then ended. David King, Interim Chief Finance Officer Page 53 of 76
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24 Remuneration Report Introduction This Remuneration Report is provided in accordance with the Local Authority Accounts (Scotland) Regulations 2014. It discloses information relating to the remuneration and pension benefits of specified IJB members and staff. The information in the tables below is subject to external audit. The other sections of this report will be reviewed by Audit Scotland and any apparent material inconsistencies with the audited financial statements will be considered as part of their audit report. Remuneration: Integration Joint Board Chair and Vice Chair The voting members of the IJB are appointed through nomination by Midlothian Council and NHS Lothian Board. Nomination of the IJB Chair and Vice Chair post holders alternates between a Councillor and a Health Board representative. 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 board member costs borne by the partner. Neither the Chair nor the Vice Chair appointments had any taxable expenses paid by the IJB in 2022/23 (Previous Year: nil). The Chair of the IJB in 2023/24 was Councillor Connor McManus (who is an elected member of Midlothian Council), the Vice Chair being Val de Souza who is a non- executive member of the NHS Lothian Board. 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 Vice Chair. NHS Lothian no longer automatically offers another full day’s remuneration for being the Board’s Lead Voting Member on an IJB. Instead, non-executive remuneration is based on an individual’s overall estimated time commitment, which can include multiple memberships of Board committees and IJBs as well as other responsibilities, not just as committee chairs or lead voting members of the IJBs. No specific remuneration is therefore available for the vice chair of the IJB in 2023/24 (previous year £9,030). Remuneration: Officers of the Integration Joint Board The IJB does not directly employ any staff; however specific post-holding officers are non- voting members of the Board. Chief Officer Under section 10 of the Public Bodies (Joint Working) (Scotland) Act 2014 a Chief Officer for the IJB has to be appointed and the employing partner has to formally second the officer to Page 54 of 76
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25 the IJB. The employment contract for the Chief Officer will adhere to the legislative and regulatory framework of the employing partner organisation. The remuneration terms of the Chief Officer’s employment are approved by the IJB. The Chief Officer of the IJB is Morag Barrow, who is also the Director of Health and Social Care for Midlothian Council and the Joint Director of the Midlothian Partnership. It has been agreed that 50% of her total remuneration is to be shown in the accounts of the IJB as her remuneration as the Chief Officer of the IJB. Chief Finance Officer Although the costs of the Chief Finance Officer are not included in the charges made to the IJB by either partner, given the S95 role of the Chief Finance Officer and in the interests of transparency, the remuneration of the Chief Finance Officer is included below. Claire Flanagan was Chief Finance Officer until 30th September 2023 and was employed by NHS Lothian and has three roles – the IJB’s Chief Finance Officer, the Chief Finance Officer of East Lothian IJB and an operational role in the NHS Lothian finance team as a Finance Business Partner. On that basis, one third of the total remuneration for Claire Flanagan between 1st April 2023 and 30th September 2024 is shown below. From 1st October 2023 until 31st March 2024, David King was appointed as Chief Finance Officer on an interim basis. He is employed by NHS Lothian. His role is that of Chief Finance Officer with Midlothian IJB and Chief Finance Officer of East Lothian IJB. On that basis, his costs between 1St October 2023 and 31st March 2024 have been split half between these two IJBs. Other Officers No other staff are appointed by the IJB under a similar legal regime. Other non-voting board members who meet the criteria for disclosure are included in the disclosures below. Senior Employees: Salary, Fees & Allowances: Name 2022/23 £ 2023/24 £ Morag Barrow £52,699 £55,822 Claire Flanagan (Note 1) £25,901 £15,038 David King (Note 2) £4,308 £10,272 Note 1: Chief Finance Officer (Claire Flanagan) returned from maternity leave in May 2022, while off her role was fulfilled on an interim basis by David King. Note 2: David King covered Claire Flanagan maternity leave (which ended in May 22 as above). David King is no longer an active member of the SPPA. In respect of officers’ pension benefits the statutory liability for any future contributions to be made rests with the relevant employing partner organisation. On this basis there is no pensions liability reflected on the IJB balance sheet for the Chief Officer or any other Officers. Page 55 of 76
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26 The IJB however has responsibility for funding the employer contributions for the current year in respect of the officer time spent on fulfilling the responsibilities of their role on the IJB. The following table shows the IJB’s funding during the year to support officers’ pension benefits. The tables also show the total value of accrued pension benefits which may include benefits earned in other employment positions and from each officer’s own contributions. In year Pension Contributions: Name For Year to 2023 £ For year to 2024 £ Claire Flanagan £5,873 £3,077 Morag Barrow £3,097 £0 Accrued Pension Benefits: Name Pension (as at 31 March 2023) £000’s Lump Sum (as at 31 March 2023) £000’s Pension (as at 31 March 2024) £000’s Lump Sum (as at 31 March 2024) £000’s Morag Barrow £9 £19 £0 £0 Claire Flanagan £21 £29 £22 £55 Disclosure by Pay Bands Pay band information is not separately provided as all staff pay information has been disclosed in the information above. Exit Packages The IJB did not support nor did it direct to be supported by its partners, any exit packages during 2023/24 (2022/23: nil). Conor McManus, IJB Chair. Morag Barrow, Chief Officer. Page 56 of 76
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27 Annual Governance Statement. Introduction The Annual Governance Statement explains the IJB’s governance arrangements and system of internal control and reports on their effectiveness. Scope of Responsibility The IJB is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for and used economically, efficiently and effectively. To meet this responsibility, the IJB has established arrangements for governance which includes a system of internal control. The system is intended to manage risk to support the achievement of the IJB’s policies, aims and objectives. Reliance is also placed on NHS Lothian and Midlothian Council’s (the partners) systems of internal control that support compliance with both organisations’ policies and promotes achievement of each organisation’s aims and objectives, as well as those of the IJB. The system can only provide reasonable and not absolute assurance of effectiveness. The Governance Framework and Internal Control System The Board of the IJB comprises voting members, nominated by either NHS Lothian or Midlothian Council, as well as non-voting members including a Chief Officer appointed by the Board. The current IJB Local Code of Corporate Governance (IJB Local Code), which was approved by the Board on 8 April 2021, sets out the framework and key principles, which require to be complied with, to demonstrate effective governance. The IJB Local Code reflects the changing context of integration and is consistent with the principles and recommendations of the CIPFA/SOLACE Framework ‘Delivering Good Governance in Local Government’ (2016) and the supporting guidance notes for Scottish authorities. The overall aim of the Framework is to ensure that: resources are directed in accordance with agreed policy and according to priorities; there is sound and inclusive decision making; and there is clear accountability for the use of those resources in order to achieve desired outcomes for service users and communities. The main features of the governance framework and internal control system associated with the seven core principles of good governance defined in the IJB Local Code in existence during 2023/24 included: A. Behaving with integrity, demonstrating strong commitment to ethical values, and respecting rule of law The roles and responsibilities of Board members and statutory officers and the processes to govern the conduct of the Board’s business are defined in the Scheme of Integration which Page 57 of 76
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28 was approved by the Board and NHS Lothian in June 2022, which serves as the approved constitution, and Standing Orders, a revision of which was approved by the Board in February 2023, to make sure that public business is conducted with fairness and integrity. The Ethical Standards in Public Life (Scotland) Act 2000 provides for Codes of Conduct for local authority councillors and members of relevant public bodies. As a Public Body listed in schedule 3 of the Act, the IJB is required to produce a Code of Conduct, which was approved by the Board in April 2022, continued adherence to this Code of Conduct provides appropriate assurance against this principle. The IJB is dependent upon arrangements within the partner organisations for areas such as: • ensuring legal compliance in the operation of services; • handling complaints; • ethical awareness training and whistleblowing policies and procedures; • staff appointment and appraisal processes which take account of values and ethical behaviour; • identifying, mitigating and recording conflicts of interest, hospitality and gifts; and • procurement of goods and services which are sustainable, represent value of money and which reinforce ethical values. Other areas where the IJB places significant reliance on arrangements in place within the partner organisations are set out in the remainder of the statement. The Chief Officer is responsible for ensuring that agreed procedures are followed and that all applicable statutes and regulations are complied with. Professional advice on the discharge of duties is provided to the Board by the IJB Chief Officer supported by Chief Financial Officer, Chief Internal Auditor and Board Clerk as appropriate. B. Ensuring openness and comprehensive stakeholder engagement Board meetings are held in public unless there are good reasons for not doing so on the grounds of confidentiality. Board papers are available to the public on the Council website. Unless confidential, decisions made by the Board are documented in the public domain. Community engagement was encouraged as part of the development of the Scheme of Integration and the Strategic Plans of the Health and Social Care Integration Joint Board were developed following consultations with interested parties including members of the public. C. Defining outcomes in terms of sustainable economic, social, and environmental benefits The vision, strategic objectives and outcomes are reflected in the Midlothian Health & Social Care Integration Joint Board third Strategic Plan 2022-25 was approved in April 2022 and has been updated to reflect on-going assessment of need and priorities following public Page 58 of 76
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29 consultation. Implementation is underpinned by the associated Directions, on which progress reports are presented to the Board. Implications are considered during the decision making process within the standard report template covering Policy, Equalities, Resources, Risk, and Involving People. D. Determining the interventions necessary to optimise the achievement of the intended outcomes In determining how services and other courses of action should be planned and delivered, the IJB has a statutory responsibility to involve patients and members of the public. The IJB Strategic Plan is based on consultation during its review and update. The IJB has issued Directions to the partners for service delivery and for service redesign and recommissioning in line with the transformation programme. E. Developing the entity’s capacity, including the capability of its leadership and the individuals within it The IJB Chief Officer is responsible and accountable to the Board for all aspects of management including promoting sound governance and providing quality information/support to inform decision-making and scrutiny. Regular meetings are held between the Chief Officer and the Chair and Vice Chair of the IJB. The IJB Chief Officer also meets regularly with representatives from the partner organisations. Members of the IJB Board are provided with the opportunity to attend Development Sessions relevant to their role as part of their development programme. The IJB has also undertaken a Self-Assessment Completed in August 2023 with an improvement plan being approved. A 3 year Workforce Plan 2022-25 has been created, approved and published to help ensure it has the right people, with the right skills, in the right place, at the right time to support the delivery of its strategic objectives and priorities. F. Managing risks & performance through robust internal control & strong public financial management The IJB Chief Officer has overall responsibility for directing and controlling the partnership to deliver health and social care services. The IJB Board is responsible for key decision- making. The IJB has approved a Risk Management Strategy which includes: the reporting structure; types of risks to be reported; risk management framework and process; roles and responsibilities; and monitoring risk management activity and performance. This Strategy has been updated and presented to the June 2024 Audit & Risk Committee. The IJB Chief Financial Officer is responsible for the proper administration of all aspects of the IJB’s financial affairs including ensuring advice is given to the Board on all financial matters. Page 59 of 76
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30 The IJB’s system of internal financial control is dependent upon the framework of financial regulations, regular management information (including Revenue Budget Monitoring reports to the Board), administrative procedures (including segregation of duties), management supervision and systems of delegation and accountability within the partner organisations. The IJB also relies upon the partners for: • Counter fraud and anti-corruption arrangements; and • Management of data in accordance with applicable legislation. G. Implementing good practices in transparency, reporting, and audit to deliver effective accountabil- ity The Shared Chief Internal Auditor of Midlothian Council is the IJB’s Chief Internal Auditor whose role is to provide an independent and objective annual opinion on the effectiveness of the IJB’s internal controls, risk management and governance. This is carried out in conformance with the Public Sector Internal Audit Standards. The IJB responds to the findings and recommendations of Internal Audit, External Audit, Scrutiny and Inspection bodies. The IJB Audit and Risk Committee is integral to overseeing assurance and monitoring improvements in internal controls, risk management and governance. The Audit & Risk Committee updated the terms of reference in June 2024 and have agreed to recruit an independent member in line with CIPFA best practice. Performance Reports were presented to the Board for monitoring and control of achievement of Local Improvement Goals. An Annual Performance Report for 2023/24 is being prepared to outline progress against strategic objectives over the year. The Annual Accounts and Report for 2023/24 set out the financial position in accordance with relevant accounting regulations and is being prepared. Review of Adequacy and Effectiveness The IJB is required to conduct an annual review of the effectiveness of its governance framework. The review was informed by: an annual self-assessment carried out by Internal Audit against the IJB’s Local Code of Corporate Governance; Internal Audit reports for the IJB; External Audit reports for the IJB; relevant reports by other external scrutiny bodies and inspection agencies; and relevant partners’ (NHS Lothian and Midlothian Council) Internal Audit and External Audit reports. In respect of the three improvement areas of governance identified by the IJB in 2022/23, there have been developments during the year in all three of these areas. Specifically, the risk register has been developed to include an additional risk specific to the Boards financial challenge, the IJB Strategic Plan and the medium term financial plan continue to be further developed to include demonstrated the links more explicitly and this work remains ongoing, governance processes to manage the monitoring of financial recovery plans also remain ongoing. Page 60 of 76
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31 Improvement Areas of Governance The review activity outlined above has identified the following areas where further improvement in governance arrangements can be made to enhance compliance with the Local Code: 1 The Medium Term Financial Strategy should be further developed to include a more ex- plicit link to the Midlothian IJB Strategic Plan. 2 Given the significant challenges in developing financial recovery plans of approximately £10million for 2024/25 confirmation of the governance process of monitoring against the achievement of these recovery plans should continue to be developed. 3 Improvements to the Midlothian publication scheme are required in order to ensure that the Register of Interests for Board Members, the Public Engagement Statement and financial information is accessible through the Midlothian IJB Publication scheme. The implementation of these actions to enhance the governance arrangements in 2024/25 will be driven and monitored by the IJB Chief Officer in order to inform the next annual review. Internal Audit work planned in 2024/25 is designed to test improvements and compliance in governance. 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 and system of internal control, while recognising that further improvements are required to fully demonstrate compliance with the Local Code in order for the IJB to fully meet its principal objectives. Systems are in place to regularly review and improve governance arrangements and the system of internal control. Conor McManus, Chair Morag Barrow, Chief Officer Page 61 of 76
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32 Independent Auditor’s Report Independent auditor’s report to the members of Midlothian 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 Midlothian Integration Joint Board for the year ended 31 March 2024 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 material accounting policy information. 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 2023/24 (the 2023/24 Code). In my opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the Midlothian Integration Joint Board as at 31 March 2024 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 2023/24 Code; and • have been prepared in accordance with the requirements of the Local Gov- ernment (Scotland) Act 1973, The Local Authority Accounts (Scotland) Reg- ulations 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 5 June 2023. My period of appointment is five years, covering 2022/23 to 2026/27. I am independent of the Midlothian 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 the Midlothian Integration Joint Page 62 of 76
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33 Board. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. 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 the Midlothian 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 the Midlothian Integration Joint Board’s current or future financial sustainability. However, I report on the Midlothian 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 Interim Chief Finance Officer and the Audit and Risk Committee for the financial statements As explained more fully in the Statement of Responsibilities, the Interim 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 Interim 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 Interim Chief Finance Officer is responsible for assessing Midlothian 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 Midlothian Integration Joint Board’s operations. The Audit and Risk Committee is responsible for overseeing the financial reporting process. Page 63 of 76
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34 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 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 (Scot- land) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of the Midlothian Integration Joint Board; • inquiring of the Interim Chief Finance Officer as to other laws or regulations that may be expected to have a fundamental effect on the operations of the Midlothian Integration Joint Board; • inquiring of the Interim Chief Finance Officer concerning Midlothian Integra- tion Joint Board’s policies and procedures regarding compliance with the ap- plicable legal and regulatory framework; • discussions among my audit team on the susceptibility of the financial state- ments to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate compe- tence 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 the Midlothian 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 Page 64 of 76
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35 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. 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 Interim 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 finan- cial statements and that report has been prepared in accordance with statu- tory guidance issued under the Local Government in Scotland Act 2003; and Page 65 of 76
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36 • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the fi- nancial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). 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 au- dit. 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. Claire Gardiner, CPFA Audit Director Audit Scotland 4th Floor 102 West Port Edinburgh EH3 9DN Page 66 of 76
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37 Comprehensive Income and Expenditure Statement This statement shows the cost of providing services for the year according to accepted accounting practices. Where the impact on the General Fund is amended by statutory adjustments, this is shown in both the Expenditure and Funding Analysis and the Movement in Reserves Statement. Integration Joint Board Comprehensive Income and Expenditure Statement Income/Expenditure 2022/23 2023/24 Net Ex- penditure Net Ex- penditure £000’s £000’s Health Care Services - NHS Lothian £122,663 £132,906 Social Care Services - Midlothian Council £60,522 £66,036 Cost of Services £183,185 £198,942 Taxation and Non-Specific Grant Income -£172,830 -£186,584 Surplus/(deficit) on Provision of Services -£10,355 -£12,358 The Integration scheme lays out that the partners will provide corporate and other support to the IJB as required and will not charge for these services. These costs are not, therefore, included above. Page 67 of 76
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38 Movement in Reserves Statement The movement in reserves statement shows the value of the IJBs reserve and how this has reduced during 2023/24. Movements in Reserves during 2023/24 IJB Reserves Earmarked Reserves £000's General Reserves £000's Total Reserves £000's Movements - 2023/24 Opening Balance - 31/3/2023 £6,975 £6,182 £13,157 Drawdown of Reserve in year (£6,176) (£6,182) (£12,358) Additions to Reserve in year £0 £0 £0 Closing Balance - 31/3/2024 £799 £0 £799 The comparative values for the previous year (2022/23) being – IJB Reserves Earmarked Re- serves £000's General Reserves £000's Total Reserves £000's Movements - 2022/23 Opening Balance - 31/3/2022 £17,642 £5,870 £23,512 Drawdown of Reserve in year (£10,667) £0 (£10,667) Additions to Reserve in year £0 £312 £312 Closing Balance - 31/3/2023 £6,975 £6,182 £13,157 Page 68 of 76
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39 Balance Sheet The Balance Sheet shows the value of the IJB’s assets and liabilities as at the balance sheet date. The net assets (assets less liabilities) of the IJB are matched by the reserves held by the IJB. Integration Joint Board Balance Sheet – Current Assets Net Current Assets 31 March 2023 £000’s 31 March 2024 £000’s Notes Debtors £13,157 £799 7 Creditors: amounts falling due within one year £0 £0 Total assets less current liabilities £13,157 £799 Integration Joint Board Balance Sheet – Capital and Reserves Net Liabilities 31 March 2023 £000’s 31 March 2024 £000’s Notes Earmarked Reserve £6,975 £799 1 General Reserve £6,182 £0 1 Total Reserves £13,157 £799 See note 7 in the Notes to the Financial Statements. See note 1 in the Notes to the Financial Statements IJB usable reserves The unaudited finance statements were issued on 28th June 2024 and the audited financial statements were approved and authorised for issue by the Interim Chief Finance Officer on 19th September 2024. David King, Interim Chief Finance Officer. Page 69 of 76
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40 Notes to the Financial Statements 1 Significant Accounting Policies General Principles The Financial Statements summarise the IJB’s transactions for the 2023/24 financial year and its position at the year-end of 31 March 2024. 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. The Financial Statements are prepared in compliance with the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24, supported by International Financial Reporting Standards (IFRS), unless legislation or statutory guidance requires different treatment. 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. Basis of Preparation The IJB financial statements for 2023/24 have been prepared on a going concern basis. 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. In accordance with the CIPFA Code of Local Government Accounting (2023/24), the IJB is required to prepare its financial statements on a going concern basis unless informed by the relevant national body of the intention for dissolution without transfer of services or function to another entity. The accounts are prepared on the assumption that the IJB will continue in operational existence for the foreseeable future. The IJB’s funding from and commissioning of services to partners has been confirmed for 2023/24, and a medium-term financial plan has been prepared through to 2028. Given that the IJB is wholly funded by the partners and the IJB’s Integration Scheme commits the partners to funding any overspend within the IJB I consider that there are no material uncertainties around its going concern status. 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 Page 70 of 76
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41 • 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 wholly funded through funding contributions from the statutory funding partners, Midlothian Council and NHS Lothian. Expenditure is incurred in the form of net charges by the partners to the IJB. Cash and Cash Equivalents The IJB does not operate a bank account or hold cash. Transactions are settled on behalf of the IJB by the funding partners. Consequently, the IJB does not present a ‘Cash and Cash Equivalent’ figure on the balance sheet. Debtors and Creditors The funding balance due to or from each funding partner as at 31 March is represented as a debtor or creditor on the IJB’s Balance Sheet. 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. Employee Benefits The IJB does not directly employ staff. Staff are formally employed by the 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. More details on the arrangements are provided in the Remuneration Report. 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 as at 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. The IJB has none of the above. Page 71 of 76
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42 Reserves The IJB’s reserves are classified as either Usable or Unusable Reserves. The IJB’s only Usable Reserve is the General Fund. The balance of the General Fund as at 31 March shows the extent of resources which the IJB can use in later years to support service provision. As noted above, the IJB has reserves of £799,000 at 31 March 2024. Integration Joint Board’s useable reserve Reserves 2023/24 Closing Balance £000’s Embedding a gender informed effective response to domestic abuse Project £27 Carers Act £391 Primrose Lodge £286 Sexual Health £35 Learning Disability Checks £60 General Reserves £0 Total £799 Indemnity Insurance The IJB has indemnity insurance for costs relating primarily to potential claim liabilities regarding Board member and officer responsibilities. NHS Lothian and Midlothian Council have responsibility for claims in respect of the services that they are statutorily responsible for and that they provide. The IJB holds separate indemnity insurance through its membership of the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS) scheme, the charge for this in 2023/24 was £3,000 (PY £3,000). Unlike NHS Boards, the IJB does not have any ‘shared risk’ exposure from participation in CNORIS. The IJB participation in the CNORIS 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’s Balance Sheet. 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. There are no outstanding claims or any indications that any claims are to be made against the IJB. Page 72 of 76
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43 2 Critical Judgements and Estimation Uncertainty The critical judgements made in the Financial Statements relating to complex transactions are: • The partner organisations have considered their exposure to possible losses and made adequate provision where it is probable that an outflow of resources will be required, and the amount of the obligation can be measured reliably. Where it has not been possible to measure the obligation, or it is not probable in the partner organisations’ options that a transfer of economic benefits will be required, material contingent liabilities have been disclosed (there are none). • The Annual Accounts contains estimated figures that are based on assumptions made by the IJB about the future or that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates. • There are no items in the IJB’s Balance Sheet at 31 March 2024 for which there is a significant risk of material adjustment in the forthcoming financial year. Provisions The IJB has not created any provisions in respect of compensation claims. It is not certain that all claims have been identified or that the historic level of settlement payments is a reliable guide for future settlements. 3 Subsequent Events In accordance with the requirements of International Accounting Standards 10, events after the reporting period are considered up to the date on which the accounts are authorised for issue. This is interpreted as the date that the accounts were certified by the Chief Financial Officer following approval by the Audit and Risk Committee. Events after the Balance Sheet date are those events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the Annual Accounts are authorised for issue. Two types of events can be identified. • Adjusting events: Those that provide evidence of conditions that existed at the end of the reporting period. The Annual Accounts is adjusted to reflect such events. • Non-adjusting events: Those that are indicative of conditions that arose after the reporting period and the Statements are not adjusted to reflect such events. Where a category of events would have a material effect, disclosure is made in the notes of the nature of the events and their estimated financial effect. Page 73 of 76
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44 4 Expenditure and Funding Analysis Income and Expenditure 2023/24 Services specifically for Midlothian 2022/23 2023/24 £000’s £000’s Health £72,439 £79,694 Social Care £60,522 £66,036 Midlothian’s share of Lothian Health Services (Hosted) £27,638 £28,884 Midlothian’s share of Lothian Health Services (Set Aside) £22,586 £24,328 Total £183,185 £198,942 Funded by: Midlothian Council £56,612 £57,416 Funded by: NHS Lothian £116,218 £129,168 Total Funding £172,830 £186,584 Surplus/(Deficit) (£10,355) (£12,358) Expenditure above has been split into three main areas: • Expenditure on those services delivered specifically for the population of Midlothian. These services are managed locally by the Midlothian Partnership – shown under Health and Social Care above. • Hosted Services – these are health services managed either by the Edinburgh, East Lothian and West Lothian Partnerships or managed by NHS Lothian on a pan-Lothian basis. These services included Mental Health Services, Learning Disability Services, Substance Misuse Services, Rehabilitation services, General Dental Services, General Pharmaceutical Services and General Ophthalmic Services. This is the IJB’s agreed share of these services. • Set Aside Services – these are services delivered in the main acute hospitals (Royal Infirmary of Edinburgh, Western General Hospital and St. John’s Hospital) and managed by NHS Lothian. This is the IJB’s agreed share of these services. 5 Corporate Service Included in the above costs are the following corporate services IJB Corporate Costs 2022/23 £000’s 2023/24 £000’s Staff (Chief Officer) £53 £56 CNORIS £3 £3 Audit Fee £32 £33 Total £88 £92 As noted above, the Chief Finance Officer is not charged to the IJB. Page 74 of 76
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45 6 Related Party Transactions As partners with the Integration Joint Board, both Midlothian Council and NHS Lothian are related parties and the material transactions with these bodies are disclosed in these accounts. There are elements of expenditure which are shown against the NHS Lothian above but where the resources are used by the social care services delivered by Midlothian Council. Transfers of resources between health and social care services Funding Partner/ Resources transferred 2022/23 2023/24 £000’s £000’s NHS Lothian £122,663 £132,906 Resource Transfer (£7,109) (£6,928) Social Care Fund (£4,816) (£4,816) Other Resources transferred (£389) Net NHS Lothian Expenditure £110,738 £120,773 Midlothian Council £56,612 £66,036 Resource Transfer £7,109 £6,928 Social Care Fund £4,816 £4,816 Other Resources Transferred £389 Gross Social Care Expenditure £72,447 £78,169 Both Resource Transfer and the Social Care Fund are resources which are part of the NHS Lothian budget, but these funds are used to deliver social care service supplied by Midlothian Council. As is noted above, the IJB is not charged for the costs of its Chief Finance Officer nor any fees paid to its Vice Chair. The costs of the IJB’s Chief Officer are disclosed in the remuneration report and included in the charges to the IJB in table 4 above. Table 4 above shows the contributions received from each of the IJB’s funding partners and the commissioning expenditure provided to each partner. Table 5 above shows the corporate costs incurred by the IJB, these are funded by the partners and included in the expenditure analysis above. Page 75 of 76
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46 7 Short Term Debtors Owed to the IJB at 31 March 2024 2022/23 2023/24 £000’s £000’s Funding due from NHS Lothian £5,454 £381 Funding due from Midlothian Council £7,703 £418 Total £13,157 £799 8 VAT The IJB is not VAT registered. The VAT treatment of expenditure in the IJB’s accounts depends on which of the Partner agencies is providing the service as these agencies are treated differently for VAT purposes. Where the Council is the provider, income and expenditure excluded any amounts related to VAT, as all VAT collected is payable to H.M. Revenue & Customs and all VAT paid is recoverable from it. The Council is not entitled to fully recover VAT paid on a very limited number of items of expenditure and for these items the cost of VAT paid is included within service expenditure to the extent that it is irrecoverable from H.M. Revenue and Customs. Where the NHS is the provider, expenditure incurred will include irrecoverable VAT as generally the NHS cannot recover VAT paid as input tax and will seek to recover its full cost as income from the Commissioning IJB. Page 76 of 76