Mid Essex CCG Annual Report and Accounts 2016-17

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

1.4.2 Key Sources of Estimation Uncertainty

The following are the key estimations that management has made in the process of applying the clinical commissioning group’s
accounting policies that have the most significant effect on the amounts recognised in the financial statements:

Where possible the value of end of year transactions has been agreed with NHS counter parties on an estimated basis. Where
information is not available, the clinical comissioning group has made estimates of the value of liabilities in respect of activity in
the final weeks of the year. Asset life assumptions are based on standard assumptions for each category of non-current asset.

The clinical commissioning group has made a number of provisions which are reflected in Note 30. A number of high value
accruals have been made which include the following:

. Prescribing accrual - the month 12 accrual of £4.8m reflects the amount needed to bring the ledger position to the latest
forecast from the NHS Business Services Authority.

1.5 Revenue

Revenue in respect of services provided is recognised when, and to the extent that, performance occurs, and is measured at the
fair value of the consideration receivable. Where income is received for a specific activity that is to be delivered in the following
year, that income is deferred.

1.6 Employee Benefits

1.6.1 Short-term Employee Benefits

Salaries, wages and employment-related payments are recognised in the period in which the service is received from employees.
The cost of leave earned but not taken by employees at the end of the period is recognised in the financial statements to the
extent that employees are permitted to carry forward leave into the following period.

1.6.2 Retirement Benefit Costs

Past and present employees are covered by the provisions of the two NHS Pensions Schemes. The schemes are unfunded,
defined benefit schemes that cover NHS employers, General Practices and other bodies, allowed under the direction of the
Secretary of State, in England and Wales. Each scheme is not designed to be run in a way that would enable NHS bodies to
identify their share of the underlying scheme assets and liabilities. Therefore, the schemes are accounted for as if each were a
defined contribution scheme: the cost to the clinical commissioning group of participating in each scheme is taken as equal to the
contributions payable to that scheme for the accounting period.

For early retirements, other than those due to ill health, the additional pension liabilities are not funded by the schemes. The full
amount of the liability for the additional costs is charged to expenditure at the time the clinical commissioning group commits itself
to the retirement, regardless of the method of payment.

1.7 Other Expenses

Other operating expenses are recognised when, and to the extent that, the goods or services have been received. They are
measured at the fair value of the consideration payable. Expenses and liabilities in respect of grants are recognised when the
clinical commissioning group has a present legal or constructive obligation, which occurs when all of the conditions attached to the
payment have been met.

1.8 Property, Plant & Equipment

1.8.1 Recognition

Property, plant and equipment is capitalised if:
· It is held for use in delivering services or for administrative purposes;
· It is probable that future economic benefits will flow to, or service potential will be supplied to the clinical commissioning

group;
· It is expected to be used for more than one financial year;
· The cost of the item can be measured reliably; and,
· The item has a cost of at least £5,000; or,
· Collectively, a number of items have a cost of at least £5,000 and individually have a cost of more than £250, where the

assets are functionally interdependent, they had broadly simultaneous purchase dates, are anticipated to have
simultaneous disposal dates and are under single managerial control; or,
· Items form part of the initial equipping and setting-up cost of a new building, ward or unit, irrespective of their individual
or collective cost.

Where a large asset, for example a building, includes a number of components with significantly different asset lives, the
components are treated as separate assets and depreciated over their own useful economic lives.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

1.9 Valuation

All property, plant and equipment are measured initially at cost, representing the cost directly attributable to acquiring or
constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner
intended by management. All assets are measured subsequently at valuation.

All property is owned by NHS Property Services or local providers and therefore not recorded as assets in the clinical
commissioning group's accounts.

Fixtures and equipment are carried at depreciated historic cost as this is not considered to be materially different from current
value in existing use.

1.9.1 Subsequent Expenditure

Where subsequent expenditure enhances an asset beyond its original specification, the directly attributable cost is capitalised.
Where subsequent expenditure restores the asset to its original specification, the expenditure is capitalised and any existing
carrying value of the item replaced is written-out and charged to operating expenses.

1.10 Intangible Assets

1.10.1 Recognition

Intangible assets are non-monetary assets without physical substance, which are capable of sale separately from the rest of the
clinical commissioning group’s business or which arise from contractual or other legal rights. They are recognised only:

· When it is probable that future economic benefits will flow to, or service potential be provided to, the clinical
commissioning group;

· Where the cost of the asset can be measured reliably; and,
· Where the cost is at least £5,000.

Intangible assets acquired separately are initially recognised at fair value. Software that is integral to the operating of hardware,
for example an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software that is not
integral to the operation of hardware, for example application software, is capitalised as an intangible asset. Expenditure on
research is not capitalised but is recognised as an operating expense in the period in which it is incurred. Internally-generated
assets are recognised if, and only if, all of the following have been demonstrated:

· The technical feasibility of completing the intangible asset so that it will be available for use;
· The intention to complete the intangible asset and use it;
· The ability to sell or use the intangible asset;
· How the intangible asset will generate probable future economic benefits or service potential;
· The availability of adequate technical, financial and other resources to complete the intangible asset and sell or use it;

and,
· The ability to measure reliably the expenditure attributable to the intangible asset during its development.

1.10.2 Measurement

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date
when the criteria above are initially met. Where no internally-generated intangible asset can be recognised, the expenditure is
recognised in the period in which it is incurred.

Following initial recognition, intangible assets are carried at current value in existing use by reference to an active market, or,
where no active market exists, at the lower of depreciated replacement cost or the value in use where the asset is income
generating . Internally-developed software is held at historic cost to reflect the opposing effects of increases in development costs
and technological advances.

1.11 Depreciation, Amortisation & Impairments

Depreciation and amortisation are charged to write off the costs or valuation of property, plant and equipment and intangible non-
current assets, less any residual value, over their estimated useful lives, in a manner that reflects the consumption of economic
benefits or service potential of the assets. The estimated useful life of an asset is the period over which the clinical
commissioning group expects to obtain economic benefits or service potential from the asset. This is specific to the clinical
commissioning group and may be shorter than the physical life of the asset itself. Estimated useful lives and residual values are
reviewed each year end, with the effect of any changes recognised on a prospective basis.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

At each reporting period end, the clinical commissioning group checks whether there is any indication that any of its tangible or
intangible non-current assets have suffered an impairment loss. If there is indication of an impairment loss, the recoverable
amount of the asset is estimated to determine whether there has been a loss and, if so, its amount. Intangible assets not yet
available for use are tested for impairment annually.

A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment
charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to
expenditure. Impairment losses that arise from a clear consumption of economic benefit are taken to expenditure. Where an
impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of the recoverable
amount but capped at the amount that would have been determined had there been no initial impairment loss. The reversal of the
impairment loss is credited to expenditure to the extent of the decrease previously charged there and thereafter to the revaluation
reserve.

1.12 Donated Assets

The clinical commissioning group does not have any donated assets.

1.13 Government Grants

The value of assets received by means of a government grant are credited directly to income. Deferred income is recognised only
where conditions attached to the grant preclude immediate recognition of the gain.

1.14 Non-current Assets Held For Sale

The clinical commissioning group does not have any non-current assets for sale.

1.15 Leases

Leases are classified as finance leases when substantially all the risks and rewards of ownership are transferred to the lessee. All
other leases are classified as operating leases.

1.15.1 The Clinical Commissioning Group as Lessee

Property, plant and equipment held under finance leases are initially recognised, at the inception of the lease, at fair value or, if
lower, at the present value of the minimum lease payments, with a matching liability for the lease obligation to the lessor. Lease
payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate on
interest on the remaining balance of the liability. Finance charges are recognised in calculating the clinical commissioning group’s
surplus/deficit.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease incentives are
recognised initially as a liability and subsequently as a reduction of rentals on a straight-line basis over the lease term.

Contingent rentals are recognised as an expense in the period in which they are incurred.

The clinical commissioning group does not have any finance leases.

1.15.2 The Clinical Commissioning Group as Lessor

Amounts due from lessees under finance leases are recorded as receivables at the amount of the clinical commissioning group’s
net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of
return on the clinical commissioning group’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the lease. Initial direct costs incurred
in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a
straight-line basis over the lease term.

The clinical commissioning group does not have any finance leases.

1.16 Inventories

The clinical commissioning group does not have any inventory.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

1.17 Cash & Cash Equivalents

Cash is cash in hand and deposits with any financial institution repayable without penalty on notice of not more than 24 hours.
Cash equivalents are investments that mature in 3 months or less from the date of acquisition and that are readily convertible to
known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and
that form an integral part of the clinical commissioning group’s cash management.

1.18 Provisions

Provisions are recognised when the clinical commissioning group has a present legal or constructive obligation as a result of a
past event, it is probable that the clinical commissioning group will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required
to settle the obligation at the end of the reporting period, taking into account the risks and uncertainties.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the
receivable is recognised as an asset if it is virtually certain that reimbursements will be received and the amount of the receivable
can be measured reliably.

1.19 Clinical Negligence Costs

The NHS Litigation Authority operates a risk pooling scheme under which the clinical commissioning group pays an annual
contribution to the NHS Litigation Authority which in return settles all clinical negligence claims. The contribution is charged to
expenditure. Although the NHS Litigation Authority is administratively responsible for all clinical negligence cases the legal liability
remains with the clinical commissioning group.

1.20 Non-clinical Risk Pooling

The clinical commissioning group participates in the Property Expenses Scheme and the Liabilities to Third Parties Scheme. Both
are risk pooling schemes under which the clinical commissioning group pays an annual contribution to the NHS Litigation
Authority and, in return, receives assistance with the costs of claims arising. The annual membership contributions, and any
excesses payable in respect of particular claims are charged to operating expenses as and when they become due.

1.21 Continuing Healthcare Risk Pooling

In 2014-15 a risk pool scheme was introduced by NHS England for retrospective continuing healthcare claims, for claim periods
prior to 31 March 2013. Under the scheme clinical commissioning groups contribute annually to a pooled fund, which is used to
settle the claims. (See Note 30).

The clinical commissioning group was required to make a final contribution to NHS England of £1,053k during 2016-17. As this
payment related to a known legal and constructive obligation as a result of a past event and the financial value was already
confirmed, the clinical commissioning group accrued for this amount in full in the 2015-16 accounts.
1.22 Contingencies

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the clinical commissioning
group, or a present obligation that is not recognised because it is not probable that a payment will be required to settle the
obligation or the amount of the obligation cannot be measured sufficiently reliably. A contingent liability is disclosed unless the
possibility of a payment is remote.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events not wholly within the control of the clinical commissioning group. A
contingent asset is disclosed where an inflow of economic benefits is probable.

Where the time value of money is material, contingencies are disclosed at their present value.

1.23 Financial Assets

Financial assets are recognised when the clinical commissioning group becomes party to the financial instrument contract or, in
the case of trade receivables, when the goods or services have been delivered. Financial assets are derecognised when the
contractual rights have expired or the asset has been transferred.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

Financial assets are classified into the following categories:
· Financial assets at fair value through profit and loss;
· Held to maturity investments;
· Available for sale financial assets; and,
· Loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

1.23.1 Financial Assets at Fair Value Through Profit and Loss

Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded
derivatives whose separate value cannot be ascertained, are treated as financial assets at fair value through profit and loss. They
are held at fair value, with any resultant gain or loss recognised in calculating the clinical commissioning group’s surplus or deficit
for the year. The net gain or loss incorporates any interest earned on the financial asset. The clinical commissioning group does
not hold any financial assets at fair value through profit and loss.

1.23.2 Held to Maturity Assets

Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity, and there
is a positive intention and ability to hold to maturity. After initial recognition, they are held at amortised cost using the effective
interest method, less any impairment. Interest is recognised using the effective interest method. The clinical commissioning
group does not hold any held to maturity investments.

1.23.3 Available For Sale Financial Assets

Available for sale financial assets are non-derivative financial assets that are designated as available for sale or that do not fall
within any of the other three financial asset classifications. They are measured at fair value with changes in value taken to the
revaluation reserve, with the exception of impairment losses. Accumulated gains or losses are recycled to surplus/deficit on de-
recognition.
The clinical commissioning group does not have any available for sale financial assets.

1.23.4 Loans & Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active
market. After initial recognition, they are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised using the effective interest method.

Fair value is determined by reference to quoted market prices where possible, otherwise by valuation techniques.
The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset, to the initial fair value of the financial asset.

At the end of the reporting period, the clinical commissioning group assesses whether any financial assets, other than those held
at ‘fair value through profit and loss’ are impaired. Financial assets are impaired and impairment losses recognised if there is
objective evidence of impairment as a result of one or more events which occurred after the initial recognition of the asset and
which has an impact on the estimated future cash flows of the asset.

For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between the
asset’s carrying amount and the present value of the revised future cash flows discounted at the asset’s original effective interest
rate. The loss is recognised in expenditure and the carrying amount of the asset is reduced through a provision for impairment of
receivables.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment loss is reversed through expenditure to the
extent that the carrying amount of the receivable at the date of the impairment is reversed does not exceed what the amortised
cost would have been had the impairment not been recognised.

1.24 Financial Guarantee Contract Liabilities

Financial guarantee contract liabilities are subsequently measured at the higher of:
· The premium received (or imputed) for entering into the guarantee less cumulative amortisation; and,
· The amount of the obligation under the contract, as determined in accordance with IAS 37: Provisions, Contingent

Liabilities and Contingent Assets.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

The clinical commissioning group does not have any financial guarantee contract liabilities.

1.24.1 Financial Liabilities at Fair Value Through Profit and Loss

Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded
derivatives whose separate value cannot be ascertained, are treated as financial liabilities at fair value through profit and loss.
They are held at fair value, with any resultant gain or loss recognised in the clinical commissioning group’s surplus/deficit. The net
gain or loss incorporates any interest payable on the financial liability.

The clinical commissioning group does not have any financial liabilities at fair value through profit and loss.

1.24.2 Other Financial Liabilities

After initial recognition, all other financial liabilities are measured at amortised cost using the effective interest method, except for
loans from the Department of Health, which are carried at historic cost. The effective interest rate is the rate that exactly
discounts estimated future cash payments through the life of the asset, to the net carrying amount of the financial liability. Interest
is recognised using the effective interest method.

1.25 Value Added Tax

Most of the activities of the clinical commissioning group are outside the scope of VAT and, in general, output tax does not apply
and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in
the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are stated
net of VAT.

1.26 Foreign Currencies

The clinical commissioning group did not have any foreign currency transactions.

1.27 Third Party Assets

Assets belonging to third parties (such as money held on behalf of patients) are not recognised in the accounts since the clinical
commissioning group has no beneficial interest in them. The clinical commissioning groupdoes not have any third party assets.

1.28 Losses & Special Payments

Losses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service
or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control
procedures compared with the generality of payments. They are divided into different categories, which govern the way that
individual cases are handled.
Losses and special payments are charged to the relevant functional headings in expenditure on an accruals basis, including
losses which would have been made good through insurance cover had the clinical commissioning group not been bearing its
own risks (with insurance premiums then being included as normal revenue expenditure).

The clinical commissioning group did not make any payments for losses or special payments in 2016-17.

1.29 Accounting Standards That Have Been Issued But Have Not Yet Been Adopted

The Government Financial Reporting Manual does not require the following Standards and Interpretations to be applied in 2016-
17, all of which are subject to consultation:
· IFRS 9: Financial Instruments ( application from 1 January 2018)
· IFRS 14: Regulatory Deferral Accounts ( not applicable to DH groups bodies)
· IFRS 15: Revenue for Contract with Customers (application from 1 January 2018)
· IFRS 16: Leases (application from 1 January 2019)
The application of the Standards as revised would not have a material impact on the accounts for 2016-17, were they applied in
that year.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

2. Other Operating Revenue

2016-17 2016-17 2016-17 2015-16
Total Admin Programme Total

£'000 £'000 £'000 £'000

Education, training and research 0 00 65
Non-patient care services to other bodies 1,869 338 1,531 1,274
Other revenue 312 619
Total other operating revenue 931 650 2,150 381
2,800 1,719

Admin revenue is revenue received that is not directly attributable to the provision of healthcare or healthcare services.

Allocation funding received from NHS England is not included in this note as it is drawn down directly into the bank account of the
clinical commissioning group and credited to the General Fund.
Other Operating Revenue in 2016-17 includes correction of prior year risk share from the host commissioner and funding from
Essex County Council for the Falls service.

3. Revenue 2016-17 2016-17 2016-17 2015-16
Total Admin Programme Total
From rendering of services £'000 £'000 £'000
Total 2,800 650 £'000 1,719
2,800 650 2,150 1,719
2,150

All the clinical commissioning group's revenue is generated from the supply of services and there is no revenue from the sale of
goods.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

4. Employee benefits and staff numbers

4.1.1 Employee benefits 2016-17 Total

Employee Benefits Total Permanent Other
Salaries and wages £'000 Employees £'000
Social security costs
Employer Contributions to NHS Pension scheme 6,574 £'000 1,425
Gross employee benefits expenditure 548 0
612 5,149 0
Less recoveries in respect of employee benefits (note 4.1.2) 548
Total - Net employee benefits including capitalised costs 7,734 612 1,425

Less: Employee costs capitalised 0 6,310 0
Net employee benefits excluding capitalised costs 7,734 1,425
0
0 6,310 0
7,734 1,425
0
6,310 Other
£'000
4.1.1 Employee benefits 2015-16 Total
1,659
Employee Benefits Total Permanent 0
Salaries and wages £'000 Employees 0
Social security costs 0
Employer Contributions to NHS Pension scheme 5,980 £'000
Termination benefits 377 1,659
Gross employee benefits expenditure 524 4,320
13 377 0
Less recoveries in respect of employee benefits (note 4.1.2) 524
6,893 13 1,659
Total - Net employee benefits including capitalised costs
0 5,234 0
Less: Employee costs capitalised 1,659
Net employee benefits excluding capitalised costs 6,893 0

0 5,234
6,893
0
5,234

In 2016-17 no employee benefits were recovered from third parties not capitalised (2015-16 £Nil)

Employee benefits have increased in 2016-17 due to the inclusion of out of hospital project costs of the Mid and South Essex Success
Regime (£934k). These were incurred on behalf of the five constituent CCGs and funded by NHS England.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

4.2 Average number of people employed

Total Permanently 2016-17 2015-16
Number employed Other Total
Number
Number Number
Total 155 131 24 140

Of the above: 00 0 0
Number of whole time equivalent people
engaged on capital projects

4.3 Staff sickness absence and ill health retirements 2016-17 2015-16
Number Number
Total Days Lost
Total Staff Years 667 599
Average working Days Lost 129 111
5.2 5.4

There were no persons retired early on ill health grounds in 2016-17 or 2015-16.
4.4 Exit packages agreed in the financial year
There were no exit packages agreed in 2016-17.

2015-16 2015-16 2015-16 2015-16
Total
Less than £10,000 Compulsory redundancies Other agreed departures
£10,001 to £25,000 Number
Total Number £ Number £ 1 £
1 5,098
00 1 5,098 2
12,744
1 12,744 00 17,842

1 12,744 1 5,098

There were no departures where special payments have been made in 2016-17 or 2015-16.

Analysis of Other Agreed Departures 2016-17 2015-16

Contractual payments in lieu of notice Other agreed departures Other agreed departures
Total
Number £ Number £

00 1 5,098

00 1 5,098

These tables report the number and value of exit packages agreed in the financial year. The expense associated with these departures may have been
recognised in part or in full in a previous period.

Redundancy and other departure costs have been paid in accordance with the provisions of Agenda for Change.
Exit costs are accounted for in accordance with relevant accounting standards and at the latest in full in the year of departure.

Where the clinical commissioning group has agreed early retirements, the additional costs are met by the clinical commissioning group and not by the NHS
Pension Schemes, and are included in the tables. Ill-health retirement costs are met by the NHS Pension Schemes and are not included in the tables.
The Remuneration Report includes the disclosure of exit payments payable to individuals named in that Report.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17
4.5 Pension costs
Past and present employees are covered by the provisions of the two NHS Pension Schemes. Details of the benefits payable and rules of
the Schemes can be found on the NHS Pensions website at www.nhsbsa.nhs.uk/pensions.

Both are unfunded defined benefit schemes that cover NHS employers, GP practices and other bodies, allowed under the direction of the
Secretary of State in England and Wales. They are not designed to be run in a way that would enable NHS bodies to identify their share of
the underlying scheme assets and liabilities. Therefore, each scheme is accounted for as if it were a defined contribution scheme: the cost
to the NHS body of participating in each scheme is taken as equal to the contributions payable to that scheme for the accounting period.

In order that the defined benefit obligations recognised in the financial statements do not differ materially from those that would be
determined at the reporting date by a formal actuarial valuation, the FReM requires that “the period between formal valuations shall be four
years, with approximate assessments in intervening years”. An outline of these follows:

4.5.1 Accounting valuation

A valuation of scheme liability is carried out annually by the scheme actuary (currently the Government Actuary’s Department) as at the
end of the reporting period. This utilises an actuarial assessment for the previous accounting period in conjunction with updated
membership and financial data for the current reporting period, and are accepted as providing suitably robust figures for financial reporting
purposes. The valuation of scheme liability as at 31 March 2017, is based on valuation data as 31 March 2016, updated to 31 March 2017
with summary global member and accounting data. In undertaking this actuarial assessment, the methodology prescribed in IAS 19,
relevant FReM interpretations, and the discount rate prescribed by HM Treasury have also been used.

The latest assessment of the liabilities of the scheme is contained in the scheme actuary report, which forms part of the annual NHS
Pension Scheme (England and Wales) Pension Accounts. These accounts can be viewed on the NHS Pensions website and are
published annually. Copies can also be obtained from The Stationery Office.

4.5.2 Full actuarial (funding) valuation
The purpose of this valuation is to assess the level of liability in respect of the benefits due under the schemes (taking into account their
recent demographic experience), and to recommend contribution rates payable by employees and employers.
The last published actuarial valuation undertaken for the NHS Pension Scheme was completed for the year ending 31 March 2012. The
Scheme Regulations allow for the level of contribution rates to be changed by the Secretary of State for Health, with the consent of HM
Treasury, and consideration of the advice of the Scheme Actuary and appropriate employee and employer representatives as deemed
appropriate.
The next actuarial valuation is to be carried out as at 31 March 2016. This will set the employer contribution rate payable from April 2019
and will consider the cost of the Scheme relative to the employer cost cap. There are provisions in the Public Service Pension Act 2013 to
adjust member benefits or contribution rates if the cost of the Scheme changes by more than 2% of pay. Subject to this ‘employer cost
cap’ assessment, any required revisions to member benefits or contribution rates will be determined by the Secretary of State for Health
after consultation with the relevant stakeholders.
For 2016-17, employers’ contributions of £612,480 (2015-16: £523,640) were payable to the NHS Pension Scheme at the rate of 14.3% of
pensionable pay. The scheme’s actuary reviews employer contributions, usually every four years and now based on HMT Valuation
Directions, following a full scheme valuation. The latest review used data from 31 March 2012 and was published on the Government
website on 9 June 2014. These costs are included in the NHS pension line of note 4.1.1

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

5. Operating expenses

Gross employee benefits 2016-17 2016-17 2016-17 2015-16
Employee benefits excluding governing body members Total Admin Programme Total
Executive governing body members £'000 £'000 £'000
Total gross employee benefits £'000
6,674 4,226 6,203
Other costs 1,060 1,060 2,448 690
Services from other CCGs and NHS England 7,734 5,286 0
Services from foundation trusts 6,893
Services from other NHS trusts 1,966 2,448
Purchase of healthcare from non-NHS bodies 67,021 2,025
Chair and Non Executive Members 200,288 307 1,659 63,676
Supplies and services – general 110,030 0 67,021 185,927
Consultancy services 0 200,288 110,910
Establishment 155 0 110,030
Transport 1,014 151
Premises 155 0 1,075
Depreciation 503 587 428
Amortisation 797 111 393 248
Audit fees 325 391 406 761
Other non statutory audit expenditure 753 324 267
· Other services 1 418 919
Prescribing costs 16 335
Pharmaceutical services 20 0 16
General ophthalmic services 74 16 0 14
GPMS/APMS and PCTMS 20 0 74
Other professional fees excl. audit (6) 74
Grants to Other bodies 57,796 0 2
Education and training (6) 57,796 56,663
Provisions 28 0
CHC Risk Pool contributions 5 0 28 348
Other expenditure 0 5 7
Total other costs 1,134 0
531 1,134 1,476
Total operating expenses 65 493 38 435
175 0 65 259
39 62
1,336 136
1,053 93 1,243 1,081
0 1,053 2,632
9 9
445,090 0 7
2,721 442,369 429,033
452,824
8,007 444,817 435,926

A number of staff were seconded to the Mid and South Essex Success Regime in 2016-17 including the Director of Clinical Commissioning, the
Medical Director and 50% of the Accountable Officer. As a result, a number of staff were upgraded to backfill on a temporary basis. Although NHS
England funded the project costs of the Success Regime in 2016-17 this has increased reported employee benefits by £934k.

£343k was spent on consultancy by the Success Regime team and accounts for the increase in this category.

The reduction in pharmaceutical services is because in 2015-16 the clinical commissioning group reimbursed GP practices who engaged a community
pharmacist. In 2016-17 the practices were given a sum of money through the medicines optimisation LES which they could choose to spend on
community pharmacists to reduce their spend on prescribing - therefore classified differently.

Provisions expenditure largely relates to continuing healthcare retrospective costs relating to claims since 31 March 2013 which are the responsibility
of the clinical commissioning group and are outside of the continuing healthcare risk pool arrangement with NHS England. £93k was charged against
this provision in 2016-17. In addition the provision held for retrospective claims arising from the anticipated new close down announcement has been
increased to reflect an additional year of claims (£127k) and the estimated costs of processing anticipated claims (£233k). The other significant
provision is for correcting the 2016-17 estimate for charge exempt overseas visitors (£600k) as elements of this will be reclaimed by NHS England in
2017-18.

NHS England holds a provision for settling retrospective continuing healthcare claims that were made to primary care trusts before clinical
commissioning groups were formed. NHS England are operating this provision as a risk pool. The reduced charge in 2016-17 reflects our share of the
amount NHS England estimate will be needed to settle all outstanding claims.

Page 16

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17 2016-17 2016-17 2015-16 2015-16
Number £'000 Number £'000
6. Better Payment Practice Code
13,899 142,593 12,843 136,882
6.1 Measure of compliance 13,633 139,343 12,340 131,580
98.09% 97.72% 96.08% 96.13%
Non-NHS Payables
Total Non-NHS Trade invoices paid in the Year 3,014 284,235 2,979 277,367
Total Non-NHS Trade Invoices paid within target 2,895 277,960 2,854 259,670
Percentage of Non-NHS Trade invoices paid within target 96.05% 97.79% 95.80% 93.62%

NHS Payables
Total NHS Trade Invoices Paid in the Year
Total NHS Trade Invoices Paid within target
Percentage of NHS Trade Invoices paid within target

The national criteria used to report on payment performance do not identify the delays in payment during the time that an invoice is on hold.
The Better Payment Practice Code requires the clinical commissioning group to aim to pay all valid invoices by the due date or within 30 days of
receipt of a valid invoice.

6.2 The Late Payment of Commercial Debts (Interest) Act 1998
The clinical commissioning group did not make any payments under the late Payment of Commercial Debts (Interest) Act 1998.

7. Income Generation Activities

The clinical commissioning group does not undertake any income generation activities.

8. Investment revenue

There is no investment revenue to report.

9. Other gains and losses

There are no other gains or losses to report.

10. Finance costs

There are no finance costs to report.

Page 17

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

11. Net gain/(loss) on transfer by absorption

There are no gains or losses to report or transfer by absorption.

12. Operating Leases

12.1 As lessee Buildings Other 2016-17 Buildings Other 2015-16
12.1.1 Payments recognised as an Expense £'000 £'000 Total £'000 £'000 Total
£'000 £'000
Payments recognised as an expense 703 9 866
Minimum lease payments 0 0 712 0 6 872
Contingent rents 0 0 0 0 00
Sub-lease payments 9 0 00
Total 703 866 6 872
712

12.1.2 Future minimum lease payments Buildings Other 2016-17 Buildings Other 2015-16
£'000 £'000 Total £'000 £'000 Total
Payable: £'000 £'000
No later than one year 0 7 0
Between one and five years 0 7 7 0 77
After five years 0 0 7 0 88
Total 0 14 0 0 00
14 15 15

The clinical commissioning group occupies property owned and managed by NHS Property Services Ltd (NHSPS). In 2016-17 NHS
Property Services Ltd has moved to billing on a market rent basis which includes charges for void space, any subsidies to occupants
and management overheads for the property company. These costs are reflected in Note 12.1.1

Whilst our arrangements with NHS Property Services Ltd fall within the definition of operating leases, rental charges for future years
have not yet been agreed. Consequently, this note does not include future minimum lease payments for these arrangements.
Other leases are for printers and a franking machine.

12.2 As lessor

12.2.1 Rental revenue
The clinical commissioning group did not receive any revenue as lessor.

Page 18

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

13. Property, plant and equipment Plant & Information Furniture & Total
machinery technology fittings £'000
2016-17 £'000
Cost or valuation at 01 April 2016 £'000 £'000 78 78
0 0 78
37
Cost/Valuation at 31 March 2017 0 0 78 16
53
Depreciation 01 April 2016 0 0 37 25
25
Charged during the year 0 0 16 25
Depreciation at 31 March 2017 0 0 53
25
Net Book Value at 31 March 2017 0 0 25 25

Purchased 0 0 25
Total at 31 March 2017 0 0 25

Asset financing:

Owned 0 0 25
0 25
Total at 31 March 2017 0

2015-16 Plant & Information Furniture & Total
machinery technology fittings £000
Cost or valuation at 1 April 2015 £000
Additions purchased £000 £000 155 380
Disposals other than by sale 162 63 (1) (1)
Cost/valuation at 31 March 2016 0 0 (76) (301)
78 78
Depreciation at 1 April 2015 (162) (63)
Disposals other than by sale 0 0 323
Charged during the year (301)
Depreciation at 31 March 2016 162 63 98
(162) (63) (76) 16
Net Book Value at 31 March 2016 37
0 0 16
Purchased 0 0 37 41
Total at 31 March 2016
0 0 41 41
Asset financing: 41
Owned 0 0 41
Total at 31 March 2016 0 0 41 41
41
0 0 41
0 0 41

The clinical commissioning group does not hold any revaluation reserve balances for property, plant and equipment.

13.1 Additions to assets under construction
There are no assets under construction to report.

13.2 Donated assets
There are no donated assets to report.

13.3 Government granted assets
There are no government asseets to report.

13.4 Property revaluation
The clinical commissioning group has no property assets to report.

13.5 Compensation from third parties
There was no compensation from third parties to report.

13.6 Write downs to recoverable amount
No assets were written down to recoverable amount.

13.7 Temporarily idle assets
There are no temporarily idle assets to report.

13.8 Cost or valuation of fully depreciated assets
There are no fully depreciated assets still in use to report.

13.9 Economic lives Minimum Life Maximum Life
Furniture & fittings
(years) (Years)

05

Page 19

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17 2016-17 2015-16
Purchased Purchased
14. Intangible non-current assets Computer Computer

2016-17 Software Software
£'000 £'000
Cost or valuation at 01 April 2016 61 23

Additions purchased (0) 61
Disposals other than by sale 0 (23)
Cost / Valuation At 31 March 2017
61 61
Amortisation 01 April 2016
14 23
Disposals other than by sale
Charged during the year 0 (23)
Amortisation At 31 March 2017 20 14
34 14
Net Book Value at 31 March 2017
27 48
Purchased
Total at 31 March 2017 27 48
27 48

The clinical commissioning group does not hold any revaluation reserve balances for intangible assets.

14.1 Donated assets
There are no donated assets to report.

14.2 Government granted assets
There are no government assets to report.

14.3 Revaluation
Assets were not revalued in year.

14.4 Compensation from third parties
There was no compensation from third parties for assets impaired, lost or given up.

14.5 Write downs to recoverable amount

No intangible non-current assets were written down to recoverable amounts during the year and there were no
reversals of previous write-downs.

There are no significant intangible assets controlled by the clinical commissioning group but not recognised as
assets because they didn’t meet the recognition criteria of IAS38.

14.7 Temporarily idle assets
There are no temporarily idle assets.

14.8 Cost or valuation of fully amortised assets
There are no fully depreciated intangible assets still in use to report.

14.9 Economic lives Minimum Life Maximum Life
Purchased computer software
(years) (Years)

02

15. Investment property

The clinical commissioning group does not hold any property for investment.

16. Inventories

The clinical commissioning group had no inventories at 31 March 2017 or 31 March 2016.

Page 20

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

17. Trade and other receivables Current Non-current Current Non-current
2016-17 2016-17 2015-16 2015-16
£'000 £'000
£'000 £'000

NHS receivables: Revenue 911 0 1,337 0
NHS receivables: Capital 0 00 0
NHS prepayments 0 1,401 0
NHS accrued income 1,482 0 2,247 0
Non-NHS and Other WGA receivables: Revenue 1,794 0 617 0
Non-NHS and Other WGA receivables: Capital 00 0
Non-NHS and Other WGA prepayments 225 0 83 0
Non-NHS and Other WGA accrued income 0 0 300 0
Provision for the impairment of receivables 00 0
VAT 37 07 0
Total Trade & other receivables 726 0 5,993 0

0
192
5,368

Total current and non current 5,368 5,993

There are no prepaid pension contributions included in the above figures.

17.1 Receivables past their due date but not impaired 2016-17 2015-16
£'000 £'000
By up to three months
By three to six months 83 317
By more than six months (3) 5
Total
0 39
80 361

£114k of the amount above has subsequently been recovered post the statement of financial position date. The
remaining balance includes a large credit that Essex County Council hasn't yet taken (£121k) and a number of
other outstanding debtors

The clinical commissioning group did not hold any collateral against receivables outstanding at 31 March 2017.

17.2 Provision for impairment of receivables
No receivables have been impaired.

18. Other financial assets

The clinical commissioning group had no other financial assets as at 31 March 2017.

19. Other current assets

The clinical commissioning group had no other current assets as at 31 March 2017.

Page 21

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

20. Cash and cash equivalents

Balance at 01 April 2016 2016-17 2015-16
Net change in year £'000 £'000
Balance at 31 March 2017 (693) (478)
74 (215)
(619) (693)

Made up of: 10
Cash in hand 10
Cash and cash equivalents as in statement of financial position

Bank overdraft: Government Banking Service (619) (694)
Total bank overdrafts (619) (694)

Balance at 31 March 2017 (619) (693)

No patient's money is held by the clinical commissioning group.

The clinical commissioning group's cash position is reported in the financial statements as an overdraft at 31
March 2017 due to outstanding payments due to clear after the year end. As at 31 March 2017 the clinical
commissioning group had a net positive cash balance deposited in its Government Banking Service bank
accounts of £249k.

21. Non-current assets held for sale

There are no non-current assets held for sale to report.

22. Analysis of impairments and reversals

There are no impairments or reversals to report.

Page 22

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

23. Trade and other payables Current Non-current Current Non-current
2016-17 2016-17 2015-16 2015-16
£'000 £'000
£'000 £'000
0
NHS payables: revenue 3,313 0 3,482 0
NHS accruals 4,403 0 4,527 0
Non-NHS and Other WGA payables: Revenue 4,044 0 5,505 0
Non-NHS and Other WGA accruals 16,429 0 15,598 0
Non-NHS and Other WGA deferred income 0 541 0
Social security costs 206 0 43 0
Tax 84 0 65 0
Other payables and accruals 75 0 377 0
Total Trade & Other Payables 0 30,139
406
28,959

Total current and non-current 28,959 30,139

Other payables include £98k outstanding pension contributions at 31 March 2017 (£84k - 31 March 2016)

24. Other financial liabilities

There are no other financial liabilities to report.

25. Other liabilities

There are no other liabilities to report.

Page 23

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

26. Borrowings Current Non- Current Non-current
2016-17 current 2015-16
Bank overdrafts: 2015-16
· Government banking service £'000 2016-17 £'000 £'000
Total overdrafts £'000

619 0 694 0
619 0 694 0

Total borrowings 619 0 694 0
Total current and non-current 619 694

The clinical commissioning group's cash position is reported in the financial statements as an overdraft at 31 March 2017 due to
outstanding payments due to clear after the year end. As at 31 March 2017 the clinical commissioning group had a net positive cash
balance deposited in its Government Banking Service bank accounts of £249k.

26.1 Repayment of principal falling due Department of Department
Within one year Health
2016-17 Other Total of Health Other Total
£'000 2016-17 2015-16 2015-16
0 2016-17 2015-16
£'000 £'000 £'000
619 £'000 £'000 694 694

619 0

Total 0 619 619 0 694 694

27. Private finance initiative, LIFT and other service concession arrangements

The clinical commissioning group does not have any PFI, LIFT or other concession arrangements to report.

28. Finance lease obligations

There are no finance lease obligations to report.

29. Finance lease receivables

There are no finance lease receivables to report.

Page 24

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

30. Provisions Current Non-current Current Non-current
2016-17 2016-17 2015-16 2015-16
Legal claims £'000 £'000
Continuing care £'000 0 £'000 0
Other 0 1,024 3 897
Total 296 442
205 1,320 299 1,339
Total current and non-current 1,318 717
1,523 1,018
Balance at 01 April 2016
2,843 2,357
Arising during the year
Utilised during the year Legal Claims Continuing Other Total
Reversed unused £'000 Care £'000 £'000
Balance at 31 March 2017 £'000
1,159 2,357
Expected timing of cash flows: 3 1,195
Within one year 1,212 1,339
Between one and five years 0 127 (756) (850)
Balance at 31 March 2017 0 (93)
(3) 0 0 (3)
0 1,229 1,614 2,843

0 205 1,318 1,523
0 1,024 296 1,320
0 1,229 2,843
1,614

Under the Accounts Directions issued by NHS England on 12 February 2014, NHS England is responsible for accounting for liabilities
relating to NHS Continuing Healthcare claims related to periods of care before establishment of the clinical commissioning group.
However, the legal liability remains with the clinical commissioning group. The total value of the legacy NHS Continuing Healthcare
provisions accounted for by NHS England on behalf of this clinical commissioning group at 31 March 2017 is £2,496k (2015-16
£14,527k).
The decrease is due to a large number of claims being concluded as ineligible during the year (141). A decision on all cases was
determined by 30 September 2016. During the year a further 31 cases were found eligible or partially eligible meaning that in total, of
the 272 valid cases, 61 were found eligible or partially eligible and 211 were found ineligible. Financial settlement had been paid out to
39 cases by 31 March 2017 (26 of those in 2016-17) leaving 22 to be settled in 2017-18. NHS England have confirmed that they will
continue to meet the costs of financial settlement after 31 March 2017.

A number of appeals have been received against an ineligible decision (55) or a partial eligibility decision (5). For the remaining 151
ineligible or partially eligible claims the 6 month opportunity to appeal will expire in early 2017-18. NHS England have confirmed that
they will meet the financial settlement costs of succesful appeals after 31 March 2017.
The other main provisions arising in 2016-17 include:

_ increased provision for Continuing Healthcare retrospective claims (increase of £127k bringing total provision to £667k) arising from
an anticipated close down announcement relating to the period 1 April 2013 to 31 March 2017 - plus increased provision for the costs
of administering such claims (increase of £233k bringing total provision to £354k).

_ a provision for the repayment of charge exempt overseas visitor allocation in 2017-18 due to 2016-17 estimate being significantly
higher than actual costs (£600k).

HMRC have not confirmed whether the CCG is liable to pay tax and national insurance relating to officers who were paid off payroll in
2013-14 therefore this provision is still held at 31 March 2017 (£165k).

31. Contingencies

There are no contingencies to report.

Page 25

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

32. Commitments

32.1 Capital commitments
There are no capital commitments to report.
32.2 Other financial commitments
The clinical commissioning group has not entered into non-cancellable contracts (which are not leases, private finance
initiative contracts or other service concession arrangements):

33. Financial instruments

33.1 Financial risk management
Financial reporting standard IFRS 7 requires disclosure of the role that financial instruments have had during the period in creating or
changing the risks a body faces in undertaking its activities.

As the clinical commissioning group is financed through parliamentary funding, it is not exposed to the degree of financial risk faced by
business entities. Also, financial instruments play a much more limited role in creating or changing risk than would be typical of listed
companies, to which the financial reporting standards mainly apply. The clinical commissioning group has limited powers to borrow or invest
surplus funds and financial assets and liabilities are generated by day-to-day operational activities rather than being held to change the risks
facing the clinical commissioning group in undertaking its activities.
Treasury management operations are carried out by the finance department, within parameters defined formally within the clinical
commissioning group standing financial instructions and policies agreed by the Governing Body. Treasury activity is subject to review by the
clinical commissioning group and internal auditors.
33.1.1 Currency risk
The clinical commissioning group is principally a domestic organisation with the great majority of transactions, assets and liabilities being in
the UK and sterling based. The clinical commissioning group has no overseas operations. The clinical commissioning group therefore has
low exposure to currency rate fluctuations.
33.1.2 Interest rate risk
The clinical commissioning group borrows from government for capital expenditure, subject to affordability as confirmed by NHS England.
The borrowings are for 1 to 25 years, in line with the life of the associated assets, and interest is charged at the National Loans Fund rate,
fixed for the life of the loan. The clinical commissioning group therefore has low exposure to interest rate fluctuations.
33.1.3 Credit risk

Because the majority of the clinical commissioning group's revenue comes from parliamentary funding, the clinical commissioning group
has low exposure to credit risk. The maximum exposures as at the end of the financial year are in receivables from customers, as disclosed
in the trade and other receivables note.
33.1.3 Liquidity risk
The clinical commissioning group is required to operate within revenue and capital resource limits, which are financed from resources voted
annually by Parliament. The clinical commissioning group draws down cash to cover expenditure, as the need arises. The clinical
commissioning group is not, therefore, exposed to significant liquidity risks.

Page 26

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17 Loans and Total
33 Financial instruments cont'd Receivables 2016-17
33.2 Financial assets
2016-17 £'000
Receivables: £'000
· NHS 2,705
· Non-NHS 2,705 951
Cash at bank and in hand 951 1
Total at 31 March 2017 1
3,658
3,658
Total
Receivables: Loans and 2015-16
· NHS Receivables
· Non-NHS £'000
Cash at bank and in hand 2015-16
Total at 31 March 2016 £'000 3,585
917
3,585 0
917
0 4,502

4,502 Total
2016-17
33.3 Financial liabilities Other
Financial £'000
Payables: Liabilities
· NHS 7,717
· Non-NHS 2016-17 20,878
Other borrowings £'000
Total at 31 March 2017 619
7,717 29,214
Payables: 20,878
· NHS Total
· Non-NHS 619 2015-16
Other borrowings 29,214
Total at 31 March 2016 £'000
Other
Financial 8,009
Liabilities 21,480
2015-16
694
£'000 30,183

8,009 Total
21,480 2016-17

694 £'000
30,183
29,214
33.4 Maturity of Financial Liabilities Payable to Payable to 29,214
Department of Health other bodies
In one year or less
Total at 31 March 2017 2016-17 2016-17
£'000 £'000

0 29,214
0 29,214

34. Operating segments

The clinical commissioning group considers that it only has one operating segment; commissioning of healthcare
services.

Page 27

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

35. Pooled budgets

The clinical commissioning group was not party to any pooled budget arrangements during 2016-17.
The clinical commissioning group has operated a Better Care Fund of £22.7m during 2016-17 (2015-16 £21.7m) together with Essex
County Council under a section 75 agreement. This arrangement has been reviewed and both parties have agreed that it does not
constitute a pooled fund. This conclusion has been reached as both parties have retained the financial risks associated with each of the
schemes as existed before the fund was set up.
The arrangements for each scheme within the Better Care Fund have been reviewed to determine the appropriate accounting treatment
by the clinical commissioning group and agreed with Essex County Council.
Control of the commissioning arrangements has been key to determining the nature of each scheme within the fund.
Where Essex County Conucil has been identified as Lead Commissioner or Principal, the accounting treatment has been for the
transaction with Essex County Council to be recorded in the clinical commissioning group ledger - £9.3m (2015-16 £8.7m). Where the
clinical commissioning group has control over the Commissioning of the service the transactions with the individual provider(s) are
recorded in the ledger - £13.4m (2015-16 £12.9m).
In addition to the £22.7m accounted for as above, Essex County Council has received disabilities facilities grants which have been passed
to housing authorities in accordance with allocations determined by the Department for Communities and Local Government.
The amount of disabilites facilities grant aligned to the clinical commissioning group's localities was £1.9m (2015-16 £1.1m). This scheme
is technically within the Better Care Fund but as the clinical commissioning group has no control or input into how this is spent, it is not
recorded within the clinical commissioning group's accounts.
In 2015-16 Essex County Council also passed capital funding to support investment in adult social care services under section 31 of the
Local Government Act (£3.3m across all 5 ccg areas). In 2016-17 this funding was incorporated into the disabilities facilities grant fund
and increased the amount aligned to mid essex clinical commissioning group's localities to £1.9m (2015-16 - £1.1m).

36. Lift Investments

The clinical commissioning group does not have any Lift Investments.

Page 28

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

37. Related party transactions

The clinical commissioning group is a body corporate established by order of the Secretary of State for Health.

For 2016-17 the decision making forums of the clinical commissioning group were the clinical commissioning group board and its delegated
committees.
Members of the decision making forums are required to complete a formal declaration of interest statement every six months and to notify the
clinical commissioning group of any changes between declarations as they occur. Declarations relate to themselves, interests of close family
members and associates. This disclosure enables the clinical commissioning group to ensure that the accounts disclose transactions with
related parties declared in those annual statements.

The Department of Health and NHS England are regarded as related parties. During 2016-17 the clinical commissioning group has had a
significant number of material transactions with the Department of Health and NHS England and with other entities for which these organisations
are regarded as the parent organisation. These entities are:

Mid Essex Hospital Services NHS Trust
Colchester Hospital University NHS Foundation Trust
Barts Health NHS Trust
Basildon & Thurrock University Hospital NHS Foundation Trust
Barking Havering & Redbridge University Hospitals NHS Trust
Cambridge University Hospital NHS Foundation Trust
University College London Hospitals NHS Foundation Trust
North Essex Partnership University NHS Foundation Trust
Hertfordshire Partnership University NHS Foundation Trust
East of England Ambulance Service NHS Trust
North East Essex CCG
West Essex CCG
Basildon & Brentwood CCG
Castlepoint & Rochford CCG
Southend CCG
Thurrock CCG
Other East of England and London Acute Trusts and CCGs
The NHS Litigation Authority
NHS Business Services Authority
North & East London Commissioning Support Unit
Arden & Greater East Midlands Commissioning Support Unit

In addition the CCG has had a significant number of material transactions with other government departments and other central and local
government bodies. Most of these transactions have been with Essex County Council, Braintree District Council, Chelmsford City Council and
Maldon District Council.

Voluntary and charitiable donations to the clinical commissioning group are managed on behalf of the clinical commissioning group by the North
Essex Charitable Funds Committee which is hosted by Mid Essex Hospital Services NHS Trust. Separate statutory Charitable Funds accounts
are published by Mid Essex Hospitals Services NHS Trust and are available from the Trust upon request.

During the year and in addition to the transactions reported in the Remuneration Report in the Annual Report the following GP and other clinical
leads had significant transactions with the clinical commissioning group in respect of their practices and private accounts. These transactions
were in accordance with the usual arrangements with practices for the provision of services.

Details of related party transactions with individuals are as follows:

Danbury Medical Centre - Dr Caroline Dollery - salaried GP Payments Receipts Amounts Amounts
Writtle Surgery - Dr Mike Bailey was a GP partner until 31st March 2015 to Related from owed to due from
Beacon Health Group - Mountbatten House Surgery - Dr Sam Bhima is a GP Partner Related
Coggeshall Surgery - Dr Anna Davey (start date 09/01/17) is a GP Partner Party Related Related
Fern House Surgery - Dr Ahmed Mayet is a GP Partner £'000 Party Party Party
The Elizabeth Courtland Surgery - Dr Bryan Spencer (retired 30/06/16) & Dr Anna Davey £'000 £'000 £'000
(leaving date 31/12/16) were salaried GPs 59 0 0
The Baddow Village Surgery - Dr Waseem Ahmed is a GP Partner 0 0 0 0
The Dengie Medical Partnership, Tillingham Medical Centre - Dr Donald McGeachy has 0 0 0 0
a close family member employed by 0 0 0
The Melbourne House Surgery - Dr James Booth is a GP Partner 19 0 0 0
The Whitley House Surgery - Dr Elizabeth Towers is a GP Partner 75 18

42 0 0 0
0 (22) 0 0

59 0 0 0
40 0 0
0 0
16 0 18 0
274 (22)

The CCG also had transactions with the following organisations with whom decision makers of the CCG have declared an interest:

Payments Receipts Amounts Amounts
to Related from owed to due from
Related
Party Related Related
£000 Party Party Party
£000 £000 £000

Chelmer Healthcare Ltd - Dr James Booth, Dr Elizabeth Towers & Dr Caroline Dollery 0 0 0 0
are shareholders 13,910 (799) 2,377 0
Essex County Council - Maggie Pacini is employed by 0
Farleigh Hospice - Dr Elizabeth Towers is a Trustee 1,860 0 0 0
Macmillan - Dr Elizabeth Towers is a Macmillan GP 0 (22) 0 0
North East London Foundation Trust - Dan Doherty has a close family member employed by 97 0
Provide Community Services - Dan Doherty has an honorary contract 2,543 0 1,360
St Helens and Knowsley Teaching Hospitals - Dee Davey has a close family member 34,780 0
employed by
West Essex CCG - Maggie Pacini is a member of the Board 2 0 0 0
63 (838) 116 (41)
53,158 (1,659) 3,950 (41)

Page 29

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17
37. Related party transactions continuation

Comparative figures from 2015/16

Receipts

Payments to from Amounts Amounts due
Related from Related
Party Related owed to
£000 Party
Party Related Party £000

£000 £000

Danbury Medical Centre - Dr Caroline Dollery - Salaried GP 90 0 43 0
Fern House Surgery - Dr Ahmed Mayet - GP Partner 105 0 47 0
The Elizabeth Courtauld Surgery - Dr Bryan Spencer - Salaried GP 37 0
The Practice PLC - SWF - Dr Donald McGeachy - Salaried GP 93 0 0
The Tillingham Medical Centre - Dr Donald McGeachy - close family member 40 6 0
The Melbourne House Surgery 11 0
The Whitley House Surgery 28 0 15 0
The Baddow Village Surgery 23 0 19 0
47 0 38
74 0 0

464 0 216

The CCG also had transactions with the following organisations with whom decision makers of the CCG have declared an interest:

Comparative figures from 2015/16

Receipts

Payments to from Amounts Amounts due
Related from Related
Party Related owed to
£000 Party
Party Related Party £000

£000 £000

Countess of Chester Hospital NHS Foundation Trust - Dee Davey - close family member 20 0 0
Essex County Council - Sheila Norris, Krishna Ramkhelawon & Maggie Pacini -
employed by 12,936 (727) 1,981 (807)
Farleigh Hospice - Keith Andrew - Chair of Trustees & Dr Liz Towers - Trustee 2,155 0 0 0
North East London Foundation Trust - Dan Doherty - close family member employed by 1015 0 0
Provide Community Services - Dan Doherty - honorary contract 0 231
34,347 698 (23)
Chelmer Healthcare Ltd - Dr James Booth, Dr Elizabeth Towers & Dr Caroline
Dollery - shareholders 118 0 78 0
West Essex CCG - Sheila Norris & Maggie Pacini both members of the Board 914 (398) 934 (32)
Basildon & Brentwood CCG - Krishna Ramkhelawon - Board member -20
MDC Innovations - Melanie Crass * - Director 81 (12) 20
Macmillan - Dr Elizabeth Towers - Macmillan GP 110 0 0 0
0 0
0 (22)
3,942 (882)
51,678 (1,159)

*Payments were made to MDC Innovations during the period April 2015 to December 2015 while Melanie Crass was working as Interim Project Director. Payment
was also made to MDC Innovations for January 2016 when Melanie was in post as a Board Director prior to her being set up on payroll in February 2016

Page 30

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

38. Events after the end of the reporting period

There are no post balance sheet events which will have a material effect on the financial statements of the clinical commissioning group.

39. Losses and special payments

39.1 Losses Total Total Value Total Total Value of
There were no losses to report for 2016-17 or 2015-16. Number of Cases Number Cases
39.2 Special payments of Cases 2016-17 of Cases
2016-17 £'000 2015-16 2015-16
Ex gratia payments Number Number £'000
Total
0 01 1
0 01 1

40. Third party assets

The clinical commissioning group does not hold any assets on behalf of other parties.

41. Financial performance targets

NHS clinical commissioning group have a number of financial duties under the NHS Act 2006 (as amended).
Mid Essex clinical commissioning group's performance agaist those duties was as follows:

2016-17 2016-17 2015-16 2015-16

Target Performance Target Performance

` £000 £000 £000 £000

Expenditure not to exceed income - 223H (1) 430,921 452,824 411,113 435,986
Capital resource use does not exceed the amount specified in Directions - 223I (2) 0 0 90 60
Revenue resource use does not exceed the amount specified in Directions - 223I (3)
428,122 450,025 409,304 434,207

Revenue administration resource use does not exceed the amount specified in Directions - 223J (3) 8,345 7,357 8,777 7,964

For the purposes of 223H(1); expenditure is defined as the aggregate of gross expenditure on revenue and capital in the financila year; and, income is
defined as the aggregate of the notified maximum revenue resource, notified capital resource and all other amounts accounted as received in the financial
year (wheter under provisions of the Act or from other sources and included here on a gross basis).

The clinical commissioning group brought forward a cumulative deficit of £24,903k.
In 2016-17 the clinical commissioning group set a £3m surplus plan and achieved this surplus at year end. As a result, the carried forward cumulative
deficit is reduced to £21,903k. The auditor has issued a qualified opinion on the regularity of income and expenditure as a result of the cumulative deficit
carried forward.

The difference between the target and performance in 223H(1) is the accumulated deficit of £21,903k (2015-16; £24,903k).

Page 31

Appendix A: Glossary of
non-financial terms

Term Definition
Care pathway
Clinical Commissioning Group The route that a patient will take from their first point of contact
(CCG) with an NHS or Social Services member of staff (usually their
GP), through referral, to the completion of their treatment.
Civil Contingencies Act 2004 Formally established on 1 April 2013, Clinical Commissioning
Commissioning Groups (CCGs) are statutory bodies responsible for
Community services commissioning most healthcare – planning, buying and
monitoring services to meet the needs of their local
Commissioning Support Units communities.
(CSU) Provides a single framework for UK civil protection against any
Enhanced services challenges to society – it focuses on local arrangements and
emergency powers.
Equality Delivery System (EDS2) The review, planning, purchasing and monitoring of health and
social services.
Health or social care and services provided outside of
hospital. They can be provided in a variety of settings
including clinics and in people's homes. Community services
include a wide range of services such as district nursing,
health visiting services and specialist nursing services.
Commissioning Support Units provide capacity to clinical
commissioners as an extension of their local team to ensure
that commissioning decisions are informed and processes
structured.
Enhanced services are:

i. essential or additional services delivered to a higher
specified standard, for example, extended minor surgery

ii. services not provided through essential or additional
services

They are services provided by GPs, over and above the core
(essential and additional) services to their patients.
The EDS2 has been designed nationally as an optional tool
launched in 2011 to support NHS commissioners and
providers to deliver better outcomes for patients and
communities and better working environments for staff, which
are personal, fair and diverse. The EDS2 is all about making
positive differences to healthy living and working lives.

Term Definition

Equality Impact Assessment (EIA) An equality impact assessment involves assessing the likely
or actual effects of policies or services on people in respect of
NHS111 disability, gender and racial equality. It helps us to make sure
Palliative Care the needs of people are taken into account when we develop
Primary Care Trust (PCT) and implement a new policy or service or when we make a
Whole Time Equivalent (WTE) change to a current policy or service.
NHS 111 is a new service introduced to make it easier for
people to access local NHS healthcare services. People can
call 111 when they need medical help fast but it’s not a 999
emergency. NHS 111 is available 24 hours a day, 365 days a
year. Calls are free from landlines and mobile phones.
The total care of patients whose disease is incurable. Control
of pain, of other symptoms, and of psychological, social and
spiritual problems is paramount. The goal of palliative care is
achievement of the best quality of life for patients and their
families.
Primary Care Trusts were abolished on 31 March 2013. Prior
to that they were responsible for the planning and securing of
health services and improving the health of the local
population.
The WTE is a workforce term. The WTE for each person is
based on their hours worked as a proportion of the contracted
hours normally worked by a full-time employee in the post.

Appendix B: Glossary of
financial terms

Term Definition
Current Assets
Capital Expenditure Assets held for less than one year that can be converted to
cash such as stocks of consumables, monies held in the
Capital Resource Limit CCG’s bank account and the amount of money that is owed to
Cash Limit the CCG by individuals or organisation.

Depreciation Items of expenditure that have a useful life of more than one
Financial Instrument year and are individually valued at £5k or more e.g. large
Finance Lease pieces of equipment. It is possible to capitalise smaller items
but they have to be over £250 in value and be interdependent.
Capital expenditure purchases non-current assets (fixed
assets) or adds to the value of an existing fixed asset.

The total amount of capital expenditure (see above for
definition) that the CCG can incur in the financial year. The
CCG has a duty to not spend above its allocated Capital
Resource Limit.

The Government sets the amount of cash which the CCG may
spend during a given financial year – the Cash Limit (CL). The
CCG must ensure that the net amount of cash flowing out of
the CCG over the financial accounting period is not more than
the CL.

The annual charge in relation to the utilisation/wearing out of
non-current assets. The charge for the non-current assets is
spread over the useful life.

A contract that gives rise to a financial asset of one entity and
a financial liability of another entity e.g. cash and a contractual
right to receive cash.

An arrangement that transfers substantially all the risk and
rewards related to ownership of an asset to the CCG although
title may not have transferred.

Term Definition
General Fund
The General Fund is similar to a Profit and Loss reserve, the
Intangible Assets operating cost of the CCG is charged here as well as an
opposite entry for the Net Parliamentary Funding (amount of
IFRS – International Financial cash drawn down from the Department of Health).
Reporting Standards An invisible or ‘soft’ asset that has been purchased using
Impairment capital expenditure and has a real current market value and
contributes to the (future) operation of the CCG e.g. IT
Losses and Special Payments software.
Miscellaneous Income
Net Cash Outflow from Operating The principles-based standards, interpretations and
Activities framework which govern the production of the CCG’s
Net Parliamentary Funding accounts.
Non-Current Assets
A decrease in the values of non-current assets compared to
those values recorded on the Statement of Financial Position.
A CCG is required to undertake routinely revaluation reviews
of its fixed assets or undertake an impairment review when
there is a decline in an asset’s value. The impairment (loss) is
treated in the same way as depreciation, as a cost in the
Statement of Comprehensive Net Expenditure (SCNE), if
the change in the value of the asset is permanent.
Payments that Parliament would not have foreseen healthcare
funds being spent on, for example fraudulent payments,
personal injury payments or payments for legal compensation.

Income that the CCG receives over and above its revenue
resource limit, e.g. room rental and training income.
This is the amount of cash actually paid out less
miscellaneous income actually received. It differs from the Net
Operating Cost which includes non-cash items such as
depreciation and movements in Debtors and Creditors.

This is the amount of cash drawn down by the CCG from the
Department of Health for payments relating to commissioning
services and running the CCG.

Tangible assets that have been purchased using Capital
Expenditure (see definition above). (Previously known as
Fixed Assets). The CCG does not hold the leases for or own
any buildings – all building assets are owned or leased by
NHS Property Services.