Mid Essex CCG Annual Report and Accounts 2016-17

Annual Report 2016/17 Mid Essex CCG

Caroline Rassell

Accountable Officer, and since 25 March
2016 Interim Senior Responsible Officer
– Mid and South Essex Success Regime
(Locality Health and Care)

Caroline joined the CCG as Interim Accountable
Officer in January 2014, on secondment from
NHS Property Services Ltd, where she was the
Director of Finance. Caroline was appointed as
Accountable Officer on a permanent basis on 1
November 2014.

From 2009 Caroline was Deputy Chief
Executive at Community Health Partnerships
(CHP), an arm’s length Company of the
Department of Health. Prior to this, Caroline
worked in a number of Primary Care Trusts in
Essex as a Director of Finance and Director of
Commissioning.

Before joining the NHS, she worked for 15
years in local government.

Caroline was seconded to the Mid and South
Essex Success Regime on 25 March 2016 as
Senior Responsible Officer for Locality Health
and Care.

• Board member
• Remuneration Committee member

Dr Elizabeth Towers

Elected GP

Liz has been a GP at Whitley House Surgery for
30 years, having spent three years as a junior
doctor in the Chelmsford area.

Liz’s interests are in cancer and end of life care
and she became a Macmillan GP in 2010.

• Clinical Board member
• Clinical Lead for Cancer and Macmillan GP
• Live Well Committee member

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Annual Report 2016/17 Mid Essex CCG

James Wilson

Acting Director of Acute Commissioning

James began his career on the Surrey County
Council fast track graduate scheme. James
has since worked across Local Government
predominantly within Social Care and
Education. In 2013 James moved into the
NHS focusing on health contracting and
commissioning. James was appointed to the
role of Acting Director of Acute Commissioning
from 2 September 2016.

• Board member
• Member of Finance and Performance and

Live Well Committees
• Member of Primary Care Forum
• Member of Equality and Diversity Sub-

Committee

Vacant

Secondary Care Doctor
• Clinical Board member

Committees

A full list of the committees supporting the
Board is provided within the Governance
Statement at section 2.2.2.

2.1.4 Personal-data-related CCG’s auditor is unaware that would be
incidents relevant for the purposes of their audit report

There were no serious incidents requiring • the member has taken all the steps that
investigation and involving personal data they ought to have taken in order to make
reported to the Information Commissioner’s him or herself aware of any relevant audit
Office in 2016/17. information and to establish that the CCG’s
auditor is aware of it.

2.1.5 Statement as to disclosure 2.1.6 Donations to political
to auditors parties and charitable
organisations
Each individual who is a member of the CCG
at the time the Members Report is approved The CCG does not make donations to political
confirms: parties. The CCG has made payments to
• so far as the member is aware, there is a number of charitable organisations. The

no relevant audit information of which the

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Annual Report 2016/17 Mid Essex CCG

majority of these payments are in relation to Our policies and arrangements
Service Level Agreements (particularly to local
hospices) or as a result of successful grant Our recruitment processes are highly mature
applications. – requiring practices that adhere to safe
recruitment principles. This includes strict
2.1.7 Modern Slavery Act requirements in respect of identity checks, work
permits and criminal records.

The Modern Slavery Act 2015 has introduced Our policies such as Bullying and Harassment
changes in UK law focused on increasing at Work policy, Individual Grievance policy,
transparency in supply chains to ensure our Equality and Diversity policy and Whistleblowing
supply chains are free from modern slavery policy provide an additional platform for our
– that is, slavery, servitude, forced and employees to raise concerns about poor
compulsory labour and human trafficking. working practices

As both a local leader in commissioning health Our procurement approach follows the Crown
and care services for the population of mid Commercial Service standard. When procuring
Essex and as an employer, NHS Mid Essex goods and services, we apply NHS Terms
Clinical Commissioning Group (the CCG) and Conditions (for non-clinical procurement)
provides the following statement in respect of and the NHS Standard Contract (for clinical
its commitment to, and efforts in, preventing procurement). Both require suppliers to comply
slavery and human trafficking practices in the with relevant legislation.
supply chain and employment practices.
During 2017/18, we will continue to raise
Our organisation awareness of the Modern Slavery Act 2015
internally and as part of all procurement
As an authorised statutory body, the CCG is processes we will request all providers to set
the lead commissioner for health care services out evidence of their plans and arrangements
(including acute and community) in the mid to prevent slavery in their activities and supply
Essex area – covering a population in excess chain.
of 380,000. You can find out more about us in
section 1.1.1 of this report. This statement is made pursuant to section
54(1) of the Modern Slavery Act 2015 and
Our commitment to prevent slavery constitutes our slavery and human trafficking
and human trafficking statement for the financial year ending 31
March 2017.

The Governing Body, Senior Management Team Dr Caroline Dollery
and all employees are committed to ensuring Chair
that there is no modern slavery or human
trafficking in any part of our business activity 30 May 2017 
and, insofar as is possible, committed to holding
our suppliers to account in doing likewise.

Our approach 2.1.8 Statement of Accountable
Officer’s Responsibilities
Our overall approach will be governed by
compliance with legislative and regulatory The National Health Service Act 2006
requirements and the maintenance and (as amended) states that each Clinical
development of good practice in the fields of Commissioning Group shall have an
contracting and employment.

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Annual Report 2016/17 Mid Essex CCG

Accountable Officer and that Officer shall be form and on the basis set out in the Accounts
appointed by the NHS Commissioning Board Direction.
(NHS England). NHS England has appointed
Caroline Rassell to be the Accountable Officer The financial statements are prepared on
of Mid Essex CCG. an accruals basis and must give a true
and fair view of the state of affairs of the
The responsibilities of an Accountable Officer Clinical Commissioning Group and of its net
are set out under the National Health Service expenditure, changes in taxpayers’ equity and
Act 2006 (as amended), Managing Public cash flows for the financial year.
Money and in the Clinical Commissioning
Group Accountable Officer Appointment Letter. In preparing the financial statements, the
They include responsibilities for: Accountable Officer is required to comply with
the requirements of the Group Accounting
• The propriety and regularity of the public Manual issued by the Department of Health and
finances for which the Accountable Officer is in particular to:
answerable
• Observe the Accounts Direction issued
• For keeping proper accounting records by NHS England, including the relevant
(which disclose with reasonable accuracy at accounting and disclosure requirements,
any time the financial position of the Clinical and apply suitable accounting policies on a
Commissioning Group and enable them to consistent basis
ensure that the accounts comply with the
requirements of the Accounts Direction) • Make judgements and estimates on a
reasonable basis
• For safeguarding the Clinical Commissioning
Group’s assets (and hence for taking • State whether applicable accounting
reasonable steps for the prevention and standards as set out in the Group
detection of fraud and other irregularities) Accounting Manual issued by the
Department of Health have been followed,
• The relevant responsibilities of accounting and disclose and explain any material
officers under Managing Public Money departures in the financial statements

• Ensuring the CCG exercises its functions • Prepare the financial statements on a going
effectively, efficiently and economically (in concern basis.
accordance with Section 14Q of the National
Health Service Act 2006 (as amended)) To the best of my knowledge and belief, and
and with a view to securing continuous subject to the disclosures set out below, I have
improvement in the quality of services (in properly discharged the responsibilities set out
accordance with Section14R of the National under the National Health Services Act 2006
Health Service Act 2006 (as amended)) (as amended), Managing Public Money and in
my Clinical Commissioning Group Accountable
• Ensuring that the CCG complies with its Officer appointment letter.
financial duties under Sections 223H to 223J
of the National Health Service Act 2006 (as • Disclosure: Although the Clinical
amended). Commissioning Group achieved a £3m
surplus in year, it is carrying forward a
Under the National Health Service Act 2006 (as cumulative deficit of £21.9 million. The
amended), NHS England has directed each external auditors have issued a qualified
Clinical Commissioning Group to prepare for opinion on the regularity of income and
each financial year financial statements in the expenditure and referred this matter to the

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Annual Report 2016/17 Mid Essex CCG

Secretary of State under section 30 of the • that the annual report and accounts as a
Local Audit and Accountability Act 2014. whole is fair, balanced and understandable
and that I take personal responsibility for
I also confirm that: the annual report and accounts and the
judgments required for determining that it is
• as far as I am aware, there is no relevant fair, balanced and understandable.
audit information of which the CCG’s
auditors are unaware, and that as Caroline Rassell
Accountable Officer, I have taken all Accountable Officer
the steps that I ought to have taken to
make myself aware of any relevant audit 30 May 2017 
information and to establish that the CCG’s
auditors are aware of that information

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Annual Report 2016/17 Mid Essex CCG

2.2 Governance Statement the clinical commissioning group’s policies,
aims and objectives, whilst safeguarding
2.2.1 Introduction and context the public funds and assets for which I am
personally responsible, in accordance with the
Mid Essex Clinical Commissioning Group responsibilities assigned to me in Managing
(“The CCG”) is a body corporate established Public Money.
by NHS England (NHSE) on 1 April 2013
under the National Health Service Act 2006 (as I also acknowledge my responsibilities as
amended). set out under the National Health Service
Act 2006 (as amended) and in my Clinical
The CCG’s statutory functions are set out Commissioning Group Accountable Officer
under the National Health Service Act 2006 Appointment Letter.
(as amended). The CCG’s general function is
arranging the provision of services for persons I am responsible for ensuring that the clinical
for the purposes of the health service in commissioning group is administered prudently
England. and economically and that resources are
applied efficiently and effectively, safeguarding
The CCG is, in particular, required to arrange financial propriety and regularity.
for the provision of certain health services
to such extent as it considers necessary to I also have responsibility for reviewing the
meet the reasonable requirements of its local effectiveness of the system of internal control
population. within the clinical commissioning group as set
out in this governance statement.
As at 1 April 2017, the CCG is not subject to
any directions from NHS England issued under UK Corporate Governance Code
Section 14Z21 of the National Health Service
Act 2006. The CCG is not required to comply with the UK
Code of Corporate Governance.
Managing with relatively low funding per head
of population is a significant management However, we have reported on our Corporate
challenge to the CCG and in view of the overall Governance arrangements by drawing upon
scale of the financial and service performance best practice available, including those aspects
issues facing both commissioners and service of the UK Corporate Governance Code we
providers, in May 2015 mid and south Essex consider to be relevant to the CCG and best
was designated as one of three nationally practice.
nominated “Success Regimes”.
As part of its annual review of effectiveness, the
We are working with CCGs and providers CCG Board undertook an assessment which
within the Mid and South Essex Sustainability encompassed the relevant principles of the UK
and Transformation Plan footprint to develop Corporate Governance Code.
a radical solution to restore the service
performance and financial sustainability of the The Board concluded from this assessment
health economy. that it was generally following best practice in
relation to providing effective leadership, having
Scope of responsibility an appropriate balance of skills, experience,
independence and knowledge to enable
As Accountable Officer, I have responsibility Board members to discharge their duties
for maintaining a sound system of internal and responsibilities effectively, presenting a
control that supports the achievement of balanced and understandable assessment of

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Annual Report 2016/17 Mid Essex CCG

the CCG’s position in its financial and other • revised to reflect changes to Executive
reporting and ensuring that remuneration is set Director Board membership as agreed at
appropriately. CCG Board meeting on 1 December 2016.

Areas for improvement identified from the Member practices are clustered into three
review of effectiveness will be incorporated in localities (Chelmsford locality; Witham,
the Board’s ongoing development programme. Braintree and Halstead locality; and Maldon
and District locality – all three have sub
2.2.2 Governance arrangements localities) and work together to engage in the
and effectiveness commissioning of services on behalf of their
populations.
The main function of the governing body is to
ensure that the group has made appropriate The total number of member practices was 46
arrangements for ensuring that it exercises at the beginning of 2016/17 but one practice
its functions effectively, efficiently and (The New Surgery, South Woodham Ferrers)
economically and complies with such generally closed on 31 March 2017 which will result in
accepted principles of good governance as are there being 45 member practices from the start
relevant to it. of the new financial year.

CCGs are clinically-led membership Locality and Sub-locality Leads have standing
organisations made up of general practices. membership of the CCG’s Primary Care
The members of the Mid Essex CCG have Forum and are accountable to their constituent
determined the governing arrangements for practices under the Terms of Reference
the CCG as set out in its constitution, which is and funding criteria consequent upon that
based on the Model Constitution Framework membership.
for CCGs and originally approved on 28 March
2013. The Primary Care Forum is responsible for
engagement with practice members, wider
The constitution was amended on three primary care healthcare professionals and
occasions during the 2016/17 year. These NHSE in respect of primary care matters and
revisions were made in accordance with the provides a forum through which primary care
procedures for CCG Constitution Change, can share views and be involved in the decision
Merger or Dissolution and were as follows: making process of the CCG.

• appointment of Director of Primary Care Governing Body (the Board)
and Resilience and amended Board voting
arrangements, as agreed by the Board on The CCG’s constitution sets out the governance
24 March 2016 arrangements, roles and responsibilities of the
Board and its membership.
• incorporation of full model wording for
amendments to CCGs’ constitution for The CCG’s constitution also has a set
Primary Care Joint Commissioning, of Standing Orders, Standing Financial
as advised by NHSE (sections 6.5 to Instructions and a Scheme of Reservation and
6.7), references to other joint working Delegation.
arrangements which are not formally Joint
Committees removed and an amendment to During 2016/17 the Board met every two
the voting rights of one Board member months until December 2016, when it was
agreed that future meetings would take place
on a quarterly basis, resulting in a total of five

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Annual Report 2016/17 Mid Essex CCG

publicly held Board meetings during 2016/17, continued in the role of Acting Director of
all of which were quorate. (There are step- Nursing and Quality throughout 2016/17.
down arrangements in place to maintain a
clinical majority or in cases of conflict of interest Due to the Director of Clinical Commissioning’s
where voting members of the Board excuse continued involvement with the Essex Success
themselves from a relevant vote.) Regime, the Deputy Director of Clinical
Commissioning was appointed as Acting
As at 31 March 2017, the Board membership Director of Acute Commissioning with effect
comprised of the following voting members: from 2 September 2016.

• Chair (a GP member) Board membership also includes two
• Accountable Officer representatives from Essex County Council
• Managing Director (ECC), one of which is a Public Health
• Chief Finance Officer Consultant. The second ECC representative
position is currently vacant. An elected
councillor representative from ECC is invited to
attend as an observer with speaking rights.

• Medical Director The Board undertakes an annual review of its
effectiveness and has determined that it fulfils
• three other GP members its role effectively either all or most of the time
and that there is good engagement of members.
• three Lay Members Appraisals of Board members have also been
undertaken to evaluate individuals’ contributions
• Secondary Care Specialist Doctor (vacant) and performance and regular group development
sessions are held to assist members to
• Acting Director of Nursing and Quality address emerging issues and priorities. Board
(Registered Nurse) Development sessions also facilitate the
provision of a range of training for members.
• Director of Clinical Commissioning
To support the Board in carrying out its duties
• Director of Primary Care and Resilience effectively, committees reporting to the Board
are formally established. The current committee
• Director of Corporate Services structure was approved at the Board meeting
held on 24 March 2016.
• Acting Director of Acute Commissioning
(non-voting). The committee structure and the remit and
terms of reference of committees were reviewed
Due to the Accountable Officer’s continued during the year to ensure robust governance
involvement in the Essex Success Regime, and assurance. The main amendment to the
the Director of Nursing and Quality was structure was the dis-establishment of three
appointed as Managing Director with effect sub committees reporting to the Live Well
from 1 July 2016 with responsibility for day- Committee, agreed at the Board meeting held
to-day operational issues, which enabled on 1 December 2016.
the Accountable Officer to focus on strategic
planning in line with the objectives of the Each committee submits a summary of
Mid and South Essex Success Regime and discussions and decisions to each Board
Sustainability and Transformation Plan. meeting and reports any key issues. The main
committees providing assurance to the Board
The Deputy Director of Nursing and Quality are as follows.

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Annual Report 2016/17 Mid Essex CCG

Audit Committee final accounts and management response to
the auditor on behalf of the Board.
This Committee provides the CCG’s Board
with an independent and objective view of the The Committee also received a regular report
CCG’s financial systems, financial information on the CCG’s Assurance Framework, risk
and compliance with laws, regulations and registers and risk profile and compliance
directions governing the CCG insofar as they with the Security Management Standards
relate to finance, good corporate governance, for Commissioners. The Committee receives
information governance, emergency planning, minutes of the CCG’s main Committees and
response and resilience (EPRR), business the Primary Care Commissioning Committee
continuity management (BCM) and the CCG’s established between the CCG, North East
responsibility to act effectively, efficiently and Essex CCG and NHSE. In line with revised
economically. The Audit Committee is chaired NHSE guidance on the management of
by the Lay Member (Governance)/Deputy Chair Conflicts of Interest, the Chair of the Committee
of the CCG, Keith Andrew. was appointed as the CCG’s Conflicts of
Interest Guardian.
As at 31 March 2017, its other members
comprised the Lay Member (Commercial), Alan The Committee approved revised Conflicts of
Hubbard, and an elected GP Board member, Interest, Gifts and Hospitality and Standards
Dr Mike Bailey. A second elected GP Board of Business Conduct Policies which were
member, Dr James Booth, was co-opted onto amended to comply with the new guidance.
the Committee on a temporary basis to ensure The Audit Committee Chair regularly met with
the Committee was quorate at its May 2016 the Director of Corporate Services and Head
meeting. During 2016/17 the Committee met of Corporate Governance to receive assurance
on six occasions and attendance has been that the guidance was being implemented prior
quorate in line with its Terms of Reference on all to signing the quarterly and annual conflicts
occasions. of interest self-certificate submitted to NHS
England.
During 2016/17 the Audit Committee continued
to focus upon ensuring the development of the The Audit Committee Chair was also a member
systems, policies, procedures and processes of the External Audit Working Group (EAWG)
fundamental to the governance of the which agreed that all seven Essex CCGs would
organisation. This included a review of Standing procure the services of a single External Audit
Orders, Standing Financial Instructions, Provider via the Crown Commercial Services
Scheme of Reservation and Delegation, and “ConsultancyONE” Framework Contract from 1
the Detailed Scheme of Delegation at the April 2017 for four years.
committee meeting held in February 2017.
As from February 2017, the committee also
The Committee has been receiving assurance took on responsibility for receiving assurance
from internal audit of key systems and relating to emergency planning, resilience and
processes and, in addition to routine reporting, response and business continuity management,
including updates on counter-fraud initiatives which had previously been within the remit of
and investigations, has focused upon ensuring the Quality and Governance Committee.
that recommendations made following Audits
are implemented, monitoring the signing of Remuneration Committee
contracts and reviewing the progress being
made to clear the backlog of retrospective This Committee has delegated authority
Continuing Health Care claims. The Committee from the Board to make decisions on the
reviewed the draft accounts and approved the remuneration, fees and other allowances and

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Annual Report 2016/17 Mid Essex CCG

benefits/benefits in kind for employees and for The committee also has a number of standing
individuals who provide services to the CCG. members/co-opted members representing
It also oversees arrangements for termination the various functions within the remit of the
of employment and other contractual terms committee.
including the proper calculation and scrutiny of
termination payments. During 2016/17 areas of particular focus
for the Committee have included reviewing
In making such decisions the Committee key patient safety risks, responding to
ensures that any relevant national guidance Care Quality Commission concerns about
or other guidance is taken into account as providers, evaluation of patient experience,
appropriate. and the development and review of quality and
governance related policies.
The Remuneration Committee is chaired by
the Lay Member (Governance)/Deputy Chair The Committee met bi monthly until November
of the CCG and, as at 31 March 2017, its other 2016, and thereafter on a quarterly basis as
membership comprised the Chair of the CCG, agreed by the Board on 1 December 2016.
the Lay Member (Commercial), the Accountable Attendance has been quorate in line with its
Officer and the Head of Human Resources. Terms of Reference on all occasions.

The Committee met on three occasions last Finance and Performance Committee
year and was quorate on all occasions.
This Committee scrutinises and provides the
Quality and Governance Committee CCG Board with assurance on the CCG’s
overall financial and service performance for
This Committee provides assurance regarding all commissioned services and running costs.
the quality, safety, effectiveness and The Committee was chaired by the Lay Member
performance of services commissioned by the (Commercial).
CCG.
As of 31 March 2017 its other membership
The Committee also scrutinises and receives comprised GP Representative (Vice Chair),
assurance regarding the CCG’s corporate Managing Director, Chief Finance Officer,
governance arrangements including risk Director of Primary Care and Resilience,
management, information governance, equality Medical Director or a senior nurse from the
and diversity, the organisational development Nursing and Quality Directorate, Deputy Chief
strategy and, until February 2017, EPRR Finance Officer and Acting Director of Acute
and BCM, when responsibility for these Commissioning.
two functions was transferred to the Audit
Committee. The Committee was chaired by the During 2016/17 the Committee particularly
Clinical Vice-Chair of the CCG (an elected GP focused upon the management of the activity
member). of the CCG’s main service providers, financial
control to ensure that the CCG remained on
As of 31 March 2017, its other core membership track to deliver the planned outturn position and
comprised the, Lay MECCG Board Member, the maintenance of performance and quality
Patient and Public Engagement (Deputy indicators.
Chair), Director of Nursing and Quality, Director
of Primary Care and Resilience, Director of The Committee met monthly until October 2016
Corporate Services, Deputy Director of Nursing and bi-monthly thereafter, with a total of eight
and Quality, Chief Pharmacist and Head of meetings during the year. Attendance was
Corporate Governance. quorate in line with its Terms of Reference on

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Annual Report 2016/17 Mid Essex CCG

all but two occasions. On these occasions, any Chief Finance Officer, and the Acting Deputy
decisions were deferred for virtual approval by Director of Nursing and Quality.
members and noted in subsequent minutes.
During 2016/17 the Committee focused on
In addition to regular scrutiny of the CCG’s building partnership working both in the context
financial position and performance against of the Essex Success Regime Sustainability
contracts, the Committee has received detailed and Transformation Plan and, in particular, with
reports on some of the CCG’s major contracts, Essex County Council on public health matters;
including: Mental Health strategies including Dementia,
children’s and young people’s mental health
• Mid Essex Hospital Services NHS Trust and suicide prevention; End of Life strategies;
Primary Care sustainability and the shape of
• East of England Ambulance Service NHS community based health services, including
Trust locality development; and a wide variety of
other developments to transform care, including
• Primecare personal health budgets.

• Provide Community Interest Company The committee, which met for the first time
in May 2016, normally meets on a monthly
• Mental Health (high-cost beds) basis. However, meetings were not held during
two months in 2016/17, making a total of nine
• Colchester Hospital University NHS meetings held during the year. Attendance was
Foundation Trust. quorate in line with the committee’s Terms of
Reference on all occasions.
Live Well Committee
Primary Care Commissioning
This committee provides the main forum for Committee
assurance of the delivery of the CCG’s Live
Well Strategy, championing the Live Well This committee was a joint committee between
vision within the mid Essex health and social Mid Essex CCG, North East Essex CCG and
care system and overseeing and assuring the NHS England. The role of the committee
CCG’s contribution to the implementation of all was to carry out the functions relating to the
aspects of the Live Well health and wellbeing commissioning of primary medical services in
programmes. mid and North East Essex under section 83 of
the NHS Act except those relating to individual
The Committee ensures that all clinical, GP performance management, which were
strategic and operational activity commissioned reserved to NHS England.
by the CCG supports and aligns with the Live
Well strategy. The committee held its first meeting in public in
November 2016, having held two preparatory
The Committee was chaired by the Chair of the meetings prior to this. During 2016/17 the
CCG, who is an elected GP Board member. Committee focused on agreeing its Terms of
As of 31 March 2017 its other membership Reference, Primary Care Finance, Quality, IT
comprised of the CCG’s eight Clinical Leads, and premises developments, local operational
Managing Director, Director of Primary issues requiring a decision, e.g. possible
Care and Resilience, Chief Finance Officer, practice mergers and reductions in practice
Director of Corporate Services, Acting Director opening hours. Meetings were held on a
of Nursing and Quality, Chief Pharmacist, monthly basis, with a total of five meetings held
Consultant in Public Health (ECC), Deputy during 2016/17. Attendance was quorate in line

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Annual Report 2016/17 Mid Essex CCG

with the committee’s Terms of Reference on all Discharge of Statutory Functions
occasions.
During establishment, the arrangements put
In March 2017 a decision was taken to dissolve in place by the CCG and explained within
the Committee so that Mid Essex and North the Corporate Governance Framework were
Essex CCGs could pursue primary care developed with extensive expert external legal
commissioning within their own STP footprints. input, to ensure compliance with all relevant
Mid Essex CCG is currently continuing to legislation. That legal advice also informed the
hold Primary Care Commissioning Committee matters reserved for Membership Body and
meetings jointly with NHS England. Governing Body decision and the scheme of
delegation.
Response to NHS England 2015/16
assessment regarding A&E, cancer In light of the 1983 Harris Review, in November
and dementia 2016 the Audit Committee undertook a further
review of all of the statutory duties and powers
The governance arrangements for overseeing conferred on the CCG by the National Health
A&E, cancer and dementia are principally Service Act 2006 (as amended) and other
through formal contract oversight meetings, associated legislation and regulations.
for example the Service Performance Review
Group and Clinical Quality Review Group, both
held monthly with MEHT.

In addition to these main contractual oversight
groups there are a number of subsidiary groups
focused on different areas of provision that
report through this structure.

Better Care Fund Governance

For the first part of 2016/17 the formal As a result, I can confirm that the CCG is clear
governance requirements of the Better Care about the legislative requirements associated
Fund (BCF) were conducted through the Age with each of the statutory functions for which
Well/Die Well Sub-Committee of the Live Well it is responsible, including any restrictions on
Committee. Following the demise of that Sub- delegation of those functions. Responsibility for
Committee a separate BCF Partnership Board each duty and power has been clearly allocated
has been reconvened to fulfil the governance to a lead Director and a Committee identified to
requirements with Essex County Council. provide assurance on each function. Directors
have confirmed that their structures provide the
In line with the terms of the Section 75 Better necessary capability and capacity to undertake
Care Fund Agreement, decision-making all of the CCG’s statutory duties.
relating to the BCF is delegated to two
nominated representatives of the CCG and two
representatives of Essex County Council.

Utilisation of the BCF funds was agreed in the
Section 75 Agreement and in-year reporting
focused upon expenditure on the approved
services and monitoring against agreed
performance targets.

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Annual Report 2016/17 Mid Essex CCG

2.2.3 Risk management organisation through the Board Assurance
arrangements and effectiveness Framework

The CCG is committed to ensuring that risk • A review of financial risks at each Finance
management forms an integral part of its and Performance Committee meeting
philosophy, practices and business plans,
rather than viewed or practised as a separate • Recording and investigation processes for
programme, and that responsibility for incidents, including identification of learning
implementation is accepted at all levels of the
CCG. • Triangulation of learning from incidents,
complaints and claims (should they arise) is
The Risk Management Policy, which included as a standing item on the agenda
encompasses both clinical and non-clinical of the Quality and Governance Committee
risks, was revised in January 2017 and will
be considered by the Board at a development • An Equality and Diversity Sub-Committee
session in April 2017 focusing on risk which monitors completion of Equality
management. The Policy is based on the Impact Assessments
Australia/New Zealand risk management
model and sets out the risk management The CCG’s Whistleblowing Policy (supported
system, supporting processes and reporting by Freedom To Speak Up Guardian – see
arrangements which aim to protect patients, section 2.1.2) also supports risk management
the public, staff and the CCG’s assets and by providing a framework for employees to
reputation. raise concerns, in line with the Public Interest
Disclosure Act 1998, without the perception
The Board collectively agreed its Risk Appetite of being disloyal to colleagues, managers or
levels for risks falling with the categories of the organisation. This policy was reviewed in
quality, safety, regulatory, reputation, innovation, August 2016
finance or partnerships. This assists managers
to identify when risk levels are tolerable or The CCG is committed to identifying the
where further action is required to reduce risk underlying or root causes of incidents, claims
ratings to an acceptable level. The Board is and complaints, and the principal objective is to
due to review its risk appetite at the Board identify “system failures”, rather than focusing
Development meeting in April 2017 noted on individual failures.
above.
Stakeholders, including staff, patients and
Throughout 2016/17 the CCG has had in place: the public have been involved in the risk
management process, for example by ensuring
• Clear ownership of risks, with responsible that relevant staff were identified to input into
Directors and lead officers identified, with any pre-planned formal risk assessments in
escalation arrangements in place to the their function or area of work; that CCG staff
Board and contractors were made aware of agreed
risk reporting procedures; that contracts
• Strategic, Corporate and Directorate risk clearly stated the responsibilities of contracted
registers on which the latest updates personnel with regard to risk identification,
provided by lead officers were recorded and reduction, mitigation and reporting; that
reported to the Audit Committee, Quality and feedback on risk issues was encouraged via the
Governance Committee and Board CCG’s complaints and enquiries services and
through its public engagement and consultation
• Accurate reflection of strategic risks to the mechanisms, e.g. patient stories at Board
meetings, engagement with the public and other

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stakeholders on the CCG’s Live Well strategy, fraud alerts, with the help of counter-fraud
including future plans for services, Sustainability services
and Transformation Plans (STPs).
• All staff being familiar with the terms of the
Specific engagement initiatives included Conflicts of Interest, Gifts and Hospitality
palliative care, medicines waste management, and Standards of Conduct Policies
seeking the views of community/voluntary
groups on the CCG’s performance against • Registers of Interests being produced for
the Equality Delivery System (EDS2) and a Committees and those Sub committees
joint engagement exercise, in conjunction with with decision-making powers, or capacity
North East Essex CCG, regarding the Vision to influence decisions made by the CCG,
Training Clinic provided by Colchester Hospital so that the relevant committee Chair can
University Foundation Trust (CHUFT). ensure that potential conflicts are managed
appropriately.
The effectiveness of these risk management
arrangements are summarised under the The CCG Internal Control Framework
‘Review of the Effectiveness of Governance,
Risk Management and Internal Control’ section, The system of internal control is the set of
which includes the monitoring, review and processes and procedures in place in the
management of the Assurance Framework in CCG to ensure it delivers its policies, aims and
its entirety by the Audit Committee, Quality and objectives.
Governance Committee and Board.
It is designed to identify and prioritise the risks,
Prevention of Risk to evaluate the likelihood of those risks being
realised and the impact should they be realised,
The application of this framework enabled the and to manage them efficiently, effectively and
prevention of risk through: economically.

• Commitment to identifying the underlying
or root causes of incidents, complaints and
claims (should they arise)

• Promoting an open, just and non-punitive
culture

• Driving an on-going information and
education programme which empowers
and supports staff in the risk management
process generally and in relation to specific
areas of risk

• Updating and maintaining the knowledge of
Board members, including regular training
at Board development sessions on specific
areas of risk

• All staff being familiar with the terms of the
Anti-fraud and Anti-bribery policy through
promotion and training, and the issuing of

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Annual Report 2016/17 Mid Essex CCG

The system of internal control allows risk to • Risks associated with the establishment of
be managed to a reasonable level rather than governance to support the Sustainability and
eliminating all risk; it can therefore only provide Transformation Plan/Success Regime
reasonable and not absolute assurance of
effectiveness. • Risks associated with Mid Essex having the
highest number of GP closed lists within
The system of control in place is set out the region. Impact is being seen in patient
within the Board, the Committee and Risk complaints to the centre and increases in
Management sections of this statement. A&E attendances

Financial arrangements • Risks arising from the implementation of the
Policing and Crime Bill 2016.
The CCG’s key financial systems are operated
by third party providers. The risk profile of the strategic risks to achieving
the CCG’s strategic objectives at the end of
The CCG Finance team oversee the operation March 2017 was:
of internal financial control arrangements
and the dissemination of good financial Risk level Number of risks
management and professional standards.

The CCG’s financial arrangements are Extreme (red) 4
assessed annually by external parties as part of
the internal and external audit functions.

The Finance and Performance Committee High (amber) 6
exercises the Board’s functions in respect Moderate (yellow) 2
of the oversight of financial control and the
Savings Programme Board provides detailed
scrutiny and impetus to the delivery of the QIPP
programme (see section 1.2.5).

The Savings Programme Board reports to the Low (green) 0
Finance and Performance Committee and
provides a report directly to Board.

Risk Assessment Total 12

Risks included on the CCG’S risk registers This represents an increase in both the number
are identified via a number of routes, including of risks and an increase in extreme risk ratings
horizon scanning by Board/ senior managers, compared to the position as at March 2016.
by committees/sub-Committees/working
groups, financial analysis, impact assessments Progress on the controls and mitigating actions
and specific risk assessments. being implemented to address the identified
risks to achieving our strategic objectives was
Strategic Risks reported through the Assurance Framework to
the Quality and Governance Committee, Audit
New Strategic Risks during 2016/17 were as Committee and Board.
follows:

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Annual Report 2016/17 Mid Essex CCG

Despite the robust efforts made to manage Corporate (Operational) and Directorate
or reduce the risks, the following red risks Risks
remained at the end of the year with a resulting
impact on the overall achievement of our The table below sets out the number of
strategic objectives: corporate operational and directorate risks as at
the end of March 2017:
Strategic Objective – Improve quality and
outcomes for all and keep patients safe Risk level Number of Number of
Corporate Directorate
• Risk that the impact of Colchester Hospital Extreme
University Foundation Trust (CHUFT) quality (red) risks risks
failings will lead to a wider lack of confidence
in Mid Essex CCG commissioned services 2 2

• Mid Essex has the highest number of GP High 11 9
closed lists within a single CCG for the (amber) 5 6
region. Recent closures have been linked to
Sutherland Lodge re-procurement. Impact Moderate
is being seen in patient complaints to the (yellow)
centre and increases in A&E attendances

• Risk that changes arising from the Low (green) 0 1
implementation of the Policing and Crime
Bill 2016 could result in the CCG failing to Total 18 18
meet its legislative mandate in the revised
bill, leading to possible legal challenge, This represents a slight reduction in the number
reputational risk, increased demand on of risks, although the number of corporate risks
A&E Departments, risk to relevant patients, rated as High/Amber has increased slightly
non-delivery of core crisis care concordat when compared to March 2016.
requirements and financial risks associated
with an increased need for S136 suites The two remaining red-rated corporate risks
were:
Strategic Objective – Ensure the CCG
has necessary governance, capacity • Risk of failure to meet Ambulance
and capability to deliver all duties and turnaround times
responsibilities

• Risks associated with the establishment of • Risk that some CCG staff will be unable
governance to support the Sustainability to effectively lead on and support NHS
and Transformation Plan/Success Regime, England in an emergency situation due to
which will only become apparent once the lack of training and experience.
outcome of the NHS England escalation is
shared The two remaining red-rated directorate risks
were:
The above risks will be rolled forward into the
2017/18 risk register and will continue to be • Increase in A&E attendances and
monitored and managed with a view to reducing admissions at MEHT
the risk rating to an acceptable level. At the
time of writing this report, no other significant • Risk of failure to meet the NHS Constitution
strategic risks have been identified. 62 day Cancer pathway standard.

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Annual Report 2016/17 Mid Essex CCG

Risks that remain open will be carried forward “adequate” assurance. The areas that the audit
to the 2017/18 risk registers and monitored by identified to be partially or non-compliant, or
the appropriate committees and responsible requiring improvement, are detailed below.
lead directors and managers.
• All Declaration of Interests Forms which are
The Audit Committee will provide scrutiny and completed by bidders/potential contractors
challenge to the management of these risks and should be signed and dated by the individual
provide an assurance opinion to the Board. The completing the declaration.
Board will ensure that any additional measures
are fully explored in order to manage or reduce The forms should be checked by the CCG’s
the identified risks. appointed procurement contractor to ensure
they have been completed fully and retained
Financial Risks by the procurement contractor on behalf of
the CCG.
During the early part of the financial year there
was a high risk that the CCG would not be able • The CCG must ensure that all procurement
to deliver the required £3m surplus and meet decisions are formally minuted by the
our control total. decision-making body, in line with the
Statutory Guidance.
As the year progressed there were a number of
non-recurrent benefits that led to a reduction in The CCG also agreed to seek clarification
the risk of not meeting the control total. from NHS England regarding the CCG’s
interpretation of the statutory guidance
Towards the end of the financial year the regarding a requirement for GPs within
CCG received notification that the benefit of member practices to submit gifts and hospitality
underspending our 1% transformation funding declarations to the CCG.
could be taken without increasing our surplus –
at which point there was reasonable confidence Data quality
that the CCG could deliver the agreed control
total of a £3m surplus. The CCG Board can have confidence that the
CCG reports data after establishing that the
2.2.4 Other sources of assurance data is precise, inclusive, and meets particular
criteria. The CCG’s data validation procedures
Annual Audit of Conflicts of Interest are designed to improve the quality of data by
Management finding inconsistencies in the data.

The revised statutory guidance on managing The CCG is continually looking for ways of
conflicts of interest for CCGs (published improving data monitoring. Examples of this
June 2016) requires CCGs to undertake an are where possible the CCG will seek daily
annual internal audit of conflicts of interest and weekly ‘raw’ data and for a period of time
management. will learn its parameters of accuracy before
validation so it can be used to provide an early
indication of any issues.

To support CCGs to undertake this task, This has proven very helpful for monitoring the
NHS England has published a template audit elective and non-elective pathways, particularly
framework. the 18 week, cancer and urgent care pathways.

The annual audit of conflicts of interest was This process then supports data validation and
carried out in February 2017 and identified

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helps in the reduction of errors. In seeking as the NHS handles information about patients and
much invalidated raw data as frequently as employees, in particular personal identifiable
possible, data variances have been identified information. The NHS Information Governance
early, easily and challenged. Spot checking by Framework is supported by an information
auditing a sample of data periodically is also governance toolkit and the annual submission
built into our systems. process provides assurances to the CCG, other
organisations and to individuals that personal
An example would be the Unwell Babies audit information is dealt with legally, securely,
which took place during the previous financial efficiently and effectively.
year. The audit was instigated as a result of a
technical query which subsequently resulted in We place high importance on ensuring there
a clinical audit to examine the issues that had are robust information governance systems and
been emerging in billing data. processes in place to help protect patient and
corporate information.
As part of this process several
recommendations were made and the provider We have reviewed our information governance
worked collaboratively with the commissioner to management framework and have developed
improve its data completeness and accuracy as information governance processes and
a result of the checks carried out by the contract procedures in line with the information
finance team. governance toolkit.

A further audit of unwell babies took place in We have ensured that all staff have access
March 2017, as a joint exercise between the to information governance training and have
Mid Essex Hospitals Trust and the CCG, in achieved the attainment threshold as required
order to iron out outstanding discrepancies in by the NHS Information Governance toolkit
recording. and have implemented a staff information
governance handbook to ensure staff are
For contracts and billing the CCG undertakes aware of their information governance roles and
numerous validation checks which are built into responsibilities.
our data processing methodology to ensure
providers are billing correctly. There are processes in place for incident
reporting and investigation of serious incidents.
This includes monitoring and challenging
contracted performance through the data No serious incidents requiring investigation
validation process. involving personal data were reported to the
Information Commissioner in 2016/17.
All contracts will have an expectation to have
a data improvement plan, which will have to The CCG has nominated information asset
provide agreed actions and timelines to improve owners who annually review the data flow
data quality and completeness if required. mapping and information asset registers to
ensure that all relevant assets are logged.
Board members received training on how to
interpret statistical information at the Board This is done with support from the Information
Development session held in January 2017. Governance (IG) Team to ensure consistency of
approach.
Information Governance
Registers include a section for risk assessing
The NHS Information Governance Framework the flow/asset as it is recorded.
sets the processes and procedures by which No red risks were indicated as part of this
process. Two amber risks were indicated. The

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first risk has been reassessed by the IG Team Essex wide Business Continuity Policy, both of
as having sufficient controls in place to reduce which have been approved by CCG Boards.
the risk level. Although the documents are updated on a
constant basis, a comprehensive annual review
The second risk has been accepted as the asset takes place each year.
has adequate mitigations in place. The Senior
Information Risk Owner (SIRO) has signed off A memorandum of understanding has been
the risks as acceptable for the organisation. signed by the Essex CCGs which sets out the
intentions of the CCGs to provide mutual aid
The CCG SIRO and Caldicott Guardian and assistance to each other during a business
attended joint training in October 2016. continuity incident which cannot be managed
internally within each CCG’s own business
The CCG has again achieved Level 2 continuity arrangements and which involves
compliance against the requirements of the one or more of the following: critical loss of key
IG Toolkit and will work with the IG Team to staff, temporary loss of premises or loss of a
maintain, as a minimum, Level 2 compliance for significant amount of IT hardware.
all criteria.
Third-party assurances
The CCG and the IG Team will continue to work
with NHS England and NHS Digital (NHSD) The CCG relies on a number of third party
to provide assurance to the Confidentiality providers which are listed below, together with
Advisory Group on the requirements of the s251 information on how assurance is received
agreements in place to ensure that the CCG from each provider, the effectiveness of these
retains its interim Accredited Safe Haven (ASH) arrangements and whether any improvements
and Controlled Environment for Finance (CEfF) are planned in the future.
status.
• Human Resources transactional,
The CCG and the IG Team also worked recruitment and workforce services and
with its IT provider and the Data Service for occupational health advice are provided
Commissioners Regional Office (DSCRO) by Anglian Community Enterprise (ACE).
to ensure that the requirements of the “Data This arrangement has been in place
Services for Commissioners (DSfC) Information since October 2014, and the relationship
Security Controls for Commissioning Data” between the two organisations continues
were fully implemented by 31 March 2017. to grow positively. Both the CCG and ACE
have received good internal and external
Business-critical models audit reviews of their HR/recruitment
functions. The CCG receives regular KPI
The CCG supports the principles of the data regarding the performance of the ACE
Macpherson Report and is committed to service and monthly client/provider meetings
embedding best practice in relation to quality are held.
assuring our prioritised business critical models
and other functions. • Payroll and pension services are provided to
MECCG by SERCO. This is a long-standing
We continue to improve certain business critical arrangement, with support provided to
systems, for example on acute hospital activity the CCG predominantly from the SERCO
reporting and forecasting and financial planning Witham office. The Head of HR meets with
by way of peer review and version control. operational and service managers from the
The Essex CCGs each have a Business SERCO payroll service on a monthly basis.
Continuity Plan supported by an overarching In addition the Employment Services Lead

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Annual Report 2016/17 Mid Essex CCG

(ACE) liaises with the SERCO team on business continuity plans. The plans which
behalf of the CCG to address payroll and were put in place ensured that the impact upon
ESR issues as they arise. The annual audit clinical services was minimised.
of payroll identified ‘good’ assurance.
The CCG and its IT support services provider is
• Arden Gem Central Support Unit was continuing to investigate how the cyber attack
commissioned until 31 March 2017 was able to access the CCG’s systems, and
to complete the CCG’s retrospective will review all internal controls going forwards
Continuing Health Care (CHC) caseload. in order to identify any areas of weakness that
Up to October 2016 weekly assurance need to be addressed.
reports on progress were received. In
addition, monthly assurance/performance There are no major control issues other than as
telephone conversations took place. Since outlined above.
completion of the caseload in October
2016, monthly assurance/ performance 2.2.6 Review of economy,
oversight relating to any disputes/complaints efficiency and effectiveness of
is provided. The CCG continues to liaise the use of resources
directly with the provider regarding any
queries as required.

• The CCG retains the services of an expert The CCG was pleased to be able to repay £3m
procurement company (Attain) to ensure of the accumulated deficit in 2016/17 despite
probity during procurement processes. recurrent healthcare funding being £7.4m below
A Register of procurement decisions is target funding. Regrettably the CCG still has
reviewed at each meeting of the Audit a £21.9m accumulated deficit from previous
Committee to ensure rigour is being applied years.
and published on the public facing website.
The CCG compares favourably with peer CCGs
• North East London Central Support Unit in benchmarking exercises of service utilisation
(NELCSU) provides Information Technology and health outcomes and in 2016/17 these
(IT) services to the CCG. NELCSU have outcomes have been achieved in the context of
updated their IT Disaster Recovery Plan, per capita funding £74 below the Essex CCG
which was shared with the CCG for average and lower than all other Essex CCGs.
comment. Monthly IT update meetings The CCG must continue to look for significant
are held to discuss performance and any cost reduction opportunities in order to contain
ongoing concerns. At these meetings, expenditure within allocated resources. In
assurances have been received regarding 2016/17 the CCG delivered £11.9 million of new
the robustness of back-up procedures. savings (2.8% of resource allocation).
Similar assurances have also been sought
and received by the CCG’s Head of The savings included those arising from
Emergency Planning in relation to business prescribing reviews and medicines optimisation,
continuity management arrangements. development of primary care and community
services to prevent use of expensive secondary
2.2.5 Control Issues care services and review of the operational
delivery of continuing health care and a
On Friday 12 May, Mid Essex CCG was number of the CCG’s small community and
affected by the global ‘cyber attack’. The CCG diagnostic services. The CCG also had a key
took action to implement its major incident and role developing a co-ordinated and consistent
approach across the System Transformation
Plan (STP) footprint.

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The Finance and Performance Committee, East Essex CCG and provides this function on
Savings Programme Board, Audit Committee a pan-Essex basis
and CCG Board have each received regular
financial reporting and had the opportunity for The previously commissioned Tier 2 (Social
detailed review of the CCG’s position. Care) and Tier 3 Community Secondary
Mental Health Services for Children, previously
The Finance and Performance Committee known as Children and Adolescent Mental
has been reviewing the CCG’s procurement Health Services (CAMHS), was replaced from
planning arrangements in order to ensure that November 2015 by the Emotional Wellbeing
the CCG is in the best possible position to and Mental Health Service (EWMHS) and was
ensure value for money from commissioned commissioned on a pan Essex basis. West
services. The CCG has also been using Essex CCG is the co-ordinating commissioner
benchmarking data across all service areas for this Service. Children’s in-patient services
to help inform the QIPP planning process. In continue to be commissioned by NHS England.
2016/17 the CCG has been working closely with
the national Rightcare programme in order to Learning Disability (LD) continues to be
identify and prioritise opportunities for further commissioned by Essex County Council, with
improvement in value for money. the Health lead for the North Essex CCGS
being West Essex CCG.
The Finance and Performance Committee
receives detailed reporting on financial and Better Care Fund resources have been
service performance and has received a number managed through partnership arrangements.
of “deep dive” reports on key priority areas.
The CCG is part of a quality collaborative
The CCG’s 2016/17 Running (management) across the North Essex CCGs, which provides
costs were lower than 2015/16 and 12% below a forum for discussion about the quality of
permitted expenditure. hosted services. Additionally any serious
incidents arising in mid or north east Essex are
The CCG was amber rated for its leadership as subject to scrutiny at a weekly serious incident
of Quarter 2 2016/17. Our year end assessment panel. The development of Sustainability and
will be published on 5 July 2017 on the MyNHS Transformation Plans (STP) has seen West
section of the NHS website. Essex withdraw from this panel as it wished
to form closer working relationships with other
The Internal Auditor has reviewed the CCG’s members of its own STP.
financial systems and processes, including
the arrangements for financial reporting, The CCG also attends the Quality Review
and confirmed that the CCG has adequate Group for Mental Health services and has
arrangements in place. oversight reports submitted to its Quality and
Governance Committee for Mental Health
Delegation of functions and Learning Disabilities. In common with
other CCGs, the Mid Essex Acting Director Of
Mental health services are commissioned on Nursing is a member of the Quality Surveillance
behalf of the three North CCGs by a central Group which allows intelligence to be shared
commissioning team hosted by North East across Essex with other commissioners and
Essex CCG. The individual placements team with the CQC.
which commissions placements for individuals
with Section 117 after care rights, as well as No adverse information has been received from
specialist placements for children and for adults third party assurance reports relating to West
requiring tertiary care, is also hosted by North Essex’s host commissioner role for Learning
Disability and EWMHS, or North East Essex

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CCG’s host commissioner role for Mental Corporate Services for a proportionate proactive
Health service. work plan to address identified risks. The Chief
Finance Officer is the identified member of the
Counter fraud arrangements executive team named within the Anti-Fraud,
Bribery and Corruption Policy who is proactively
An Accredited Counter Fraud Specialist, who and demonstrably responsible for tackling fraud,
is an employee of the CCG’s internal auditors, bribery and corruption.
is contracted to undertake counter fraud work
proportionate to identified risks. There were no NHS Protect quality assurance
recommendations received by the CCG during
The CCG Audit Committee receives an update 2016/17.
from the LCFS regarding any counter-fraud
initiatives or investigations at each meeting Head of Internal Audit Opinion
and a report against each of the NHS Protect
Standards for Commissioners: Fraud, Bribery Following completion of the planned audit
and Corruption, at least annually. work for the financial year for the CCG, the
Head of Internal Audit issued an independent
There is executive support and direction from and objective opinion on the adequacy and
the Chief Finance Officer and Director of effectiveness of the clinical commissioning

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group’s system of risk management, Area of audit Level of
governance and internal control. assurance

The Head of Internal Audit Opinion concluded given
that adequate assurance can be given that
there is a generally sound system of internal Records Management Adequate
control, designed to meet the CCG’s objectives,
and that controls are generally being applied Information Governance Adequate –
consistently. Toolkit no opinion
required
However, some weakness in design and/
or inconsistent application of controls put the Conflicts of Interest Adequate
achievement of particular objectives at risk
(this correlates with the Significant Assurance
opinion provided last year although the
terminology has changed).

The Head of Internal Audit’s opinion also During the year, Internal Audit issued the
concluded that he can provide adequate following audit report with Limited assurance
assurance that the Assurance Framework and which identified governance, risk management
associated processes are sufficient to meet and/or control issues which were significant to
the requirements of the 2016/17 Governance the organisation:
Statement and contribute to an effective system
of internal control designed to manage the Audit of Personal Health Budgets
significant risks identified by the CCG.
Internal Audit raised a total of four priority 1 and
During the 2016/17 year Internal Audit issued one priority 2 recommendations.
the following audit reports:
The priority 1 recommendations raised were:

Area of audit Level of • Ensuring evidence of the approval of all
assurance support plans is retained
Financial Systems Key
Controls (including Payroll) given • Collaborating further with social care
Good regarding Personal Health Budgets
Governance, Assurance
Framework and Risk Adequate • Implementing robust performance
Management management of the CCG’s provider of
Good support planning and financial management
Quality Governance of Personal Health Budgets

• Ensuring the CCG’s provider includes direct
payment Personal Health Budget spend
details in monthly monitoring.

Personal Health Budgets Limited All recommendations raised within the
Final Report were verified as having been
implemented prior to the end of the financial
year.

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2.2.7 Review of the effectiveness • Internal Audit
of governance, risk management
and internal control • Other explicit review/assurance
mechanisms.

My review of the effectiveness of the system Conclusion
of internal control is informed by the work of
the internal auditors, executive managers and I concur with the Head of Internal Audit Opinion
clinical leads within the clinical commissioning that during the 2016/17 year there has been
group who have responsibility for the a generally sound system of internal control,
development and maintenance of the internal designed to meet the organisation’s objectives,
control framework. and that controls have been generally applied
consistently. Action plans to implement any
I have drawn on performance information outstanding recommendations from audits
available to me. My review is also informed by are in place and will continue to be monitored
comments made by the external auditors in during the 2017/18 year.
their annual audit letter and other reports.
Internal audit have also undertaken a number
Our assurance framework provides me with of other reviews as part of their risk-based
evidence that the effectiveness of controls that audit plan, none of which have identified any
manage risks to the clinical commissioning significant concerns in relation to the CCG’s
group achieving its principles objectives have systems of internal control.
been reviewed.
I confirm that there are no risks which may
I have been advised on the implications of the affect the CCG’s License or serious lapses in
result of this review by: control.

• The Board Caroline Rassell
• The Audit Committee Accountable Officer
• Quality and Governance Committee
30 May 201 

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Annual Report 2016/17 Mid Essex CCG

2.3 Remuneration and Staff Report

2.3.1 Remuneration Committee in accordance with the NHS Very Senior
Report Managers (VSM) pay framework.

For 2016/17 the membership of the The salaries of all Governing Body members
Remuneration Committee was as follows: are determined by the Remuneration
Committee, with national and local guidance
• Keith Andrew – Committee Chair, Lay (provided by the Chief Finance Officer and
Member (Governance), Deputy Chair (Lay Head of Human Resources) being taken into
Member) of the CCG Board and Audit account in all decisions.
Committee Chair
Remuneration of Very Senior
• Dr Caroline Dollery – Elected GP and Chair Managers
of the CCG
The CCG does not employ any Very Senior
• Alan Hubbard – Lay Member (Commercial) Managers (VSMs) on a salary exceeding
£142,500.
• Julie Burton – Head of Human Resources
The CCG does however have five clinicians
• Caroline Rassell – Accountable Officer (The whose payment level, when represented as
Accountable Officer withdrew at any times a full-time notional salary, exceeds the given
that her own remuneration and performance threshold of £142,500.
were discussed).
One of these individuals is ‘employed’; the other
The Committee met on three occasions in four are engaged as Office Holders (Elected GP
2016/17. The Committee Chair was present at members) – a statutory position for the CCG.
each meeting and additional representation was
brought in when necessary to ensure quoracy in The employed clinician is a part-time individual
line with the Committee’s Terms of Reference. (qualified GP) whose salary, when represented
as a full time notional figure, exceeds £142,500.
The Committee received advice from the Chief
Finance Officer (or her deputy) as required. The The rate payable for MECCG’s Elected
Committee also relied upon national guidance GPs is set at £300 per session and is for
and documentation relating to subjects brought work undertaken by Office Holders who are
to the Remuneration Committee. not entitled to ‘employed’ benefits – i.e. no
contractual/NHS sickness or maternity pay or
Policy on remuneration of senior holiday over and above statutory minimum.
managers
Market forces coupled with a desire to attract
All the CCG’s Executive Directors are subject to already stretched GPs to consider working
Agenda for Change terms and conditions. with the CCG with the aim of making services
better for the population for mid Essex are a
The lay members and the elected GP members significant factor in setting the sessional rate.
of the CCG Governing Body are remunerated
under a locally agreed pay framework and It is considered that the sessional rate (based
the Accountable Officer is remunerated on £300 per session / £156,429 per annum
FTE) shows parity with those across the Essex

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region. None of the elected GPs works more remuneration. There is, therefore, no
than an average of six sessions per week for proportion of remuneration that is subject to
the CCG. performance conditions. However, under the
VSM pay framework, there is the potential for
Senior managers’ performance-related performance-related pay under the terms and
pay conditions of the contract.

The performance of all staff (including the Policy on the duration of contracts,
Accountable Officer, Directors and senior notice periods and termination
managers) is monitored and assessed payments
through the use of a robust appraisal system.
A formal appraisal review is undertaken at The duration of contracts is determined by the
least annually. There are no performance- duration of the roles and responsibilities to be
related pay elements contained in any undertaken.
contracts for 2016/17.
The contracts of the Accountable Officer,
Agenda for Change contracts do not contain Directors and other CCG staff are permanent
provision for performance-related unless it applies to a time limited project or
funding in which case contracts will be offered
as a fixed term contract.

The Managing Director will revert to her
substantive role as Director of Nursing following
her period covering for the Accountable Officer
who is seconded to the Mid and South Essex
Success Regime.

The notice period applying to the substantive
Accountable Officer is six months and to
Directors and other Senior Managers is three
months.

Any termination payments would be in
accordance with relevant contractual, legislative
and Inland Revenue requirements.

Salary and pension entitlements

The following tables set out information in
relation to salaries, benefits in kind and pension
entitlements of the decision makers of the
organisation.

There are no elements of remuneration outside
the standard terms and conditions of the
contracts of employment of senior managers.

Tables and narrative from this point until the end of the “Staff numbers” subsection of
section 2.3.2 are subject to independent audit by Ernst and Young LLP.

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79

Notes Managing Director, Rachel Hearn as Interim Director of Nursing Mid Essex CCG
• Note 1: Caroline Rassell, Dan Doherty and Donald McGeachy and Quality, and James Wilson as Interim Director of Acute
Commissioning.
have been seconded to the Mid and South Essex Success
Regime (Locality and Health) as Interim Senior Responsible • Note 2: Donald McGeachy’s Other Remuneration, in the band
Officer (0.5 wte), Interim Director of Clinical Commissioning £25-30k is payment for his role as Project Lead for the 111
and Interim Medical Director respectively. The Success service. This amount is recharged to West Essex CCG as
Regime secondments are funded by NHS England in full and the host organisation and subsequently a share (based on
therefore the remuneration for these posts is not shown in capitation) is charged back to Mid Essex CCG as part of the
the above table. The total remuneration bands (inclusive of cost of the overall Project Team.
Pension benefits and Expense payments) for the secondees
are: Caroline Rassell £170-175k; Dan Doherty £155-160k • Note 3: James Booth’s Other Remuneration relates to work
and Donald McGeachy £115-120k. As a result of these undertaken as: CCG Clinical Lead for CAMHS and Named GP
secondments, Carol Anderson has been seconded in as

for Safeguarding Children. The Named GP for Safeguarding • Note 6: Maggie Pacini employed by Essex County Council, Annual Report 2016/17
Children role is paid to Melbourne House Surgery, where James is a member of the CCG’s Governing Body; Sheila Norris,
Booth is the Senior Partner. The remuneration to Melbourne employed by Essex County Council was until 31 March 2016
House Surgery for Named GP for Safeguarding Children, which a member of the CCG’s Governing Body but no remuneration
is in the band £25-30k is paid as an Off-Payroll engagement is paid to their employer and they are therefore not included in
the Remuneration Report. No replacement for Sheila Norris has
• Note 4: Mike Bailey’s Other Remuneration relates to work been offered.
undertaken as: CCG Clinical Lead for Immediate Care.
• Note 7: The information for Pension Related Benefits for Dr
• Note 5: Elizabeth Tower’s Other Remuneration relates to work E Towers has been requested from NHS Pensions, but due
undertaken as: CCG Clinical Lead for Cancer and End of Life to a systems failure between the Electronic Staff Record
and Macmillan GP Facilitator. The Macmillan GP Facilitator role (ESR) and NHS Pensions, is still outstanding.
is funded by Macmillan Cancer Support.

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Mid Essex CCG

Annual Report 2016/17 Mid Essex CCG

Pension benefits

Notes pension scheme, and no adjustment has
• Note 1: The Pension Benefits show the been made to reflect the secondments to the
Success Regime.
amount accrued due to membership of the

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Annual Report 2016/17 Mid Essex CCG

• Note 2: Elected GP members are paid Real increase in CETV
through the payroll and this pay is
pensionable to the NHS officer pension This reflects the increase in CETV effectively
scheme. GP members can opt out of the funded by the employer.
NHS officer pension scheme.
It takes account of the increase in accrued
Lay Members do not receive pensionable pension due to inflation, contributions paid
remuneration therefore there are no disclosures by the employee (including the value of any
in respect of Lay Members. benefits transferred from another scheme
or arrangement) and uses common market
Cash Equivalent Transfer Values valuation factors for the start and end of the
period.
A cash equivalent transfer value (CETV) is
the actuarially assessed capital value of the Discount rate calculations
pension scheme benefits accrued by a member
at a particular point in time. On 16 March 2016, the Chancellor of the
Exchequer announced a change in the
The benefits valued are the member’s accrued Superannuation Contributions Adjusted for Past
benefits and any contingent spouse’s (or other Experience (SCAPE) discount rate from 3.0% to
allowable beneficiary’s) pension payable from 2.8%. This rate affects the calculation of CETV
the scheme. figures in this report.

A CETV is a payment made by a pension Fair Pay Disclosure (Pay Multiples)
scheme or arrangement to secure pension
benefits in another pension scheme or Reporting bodies are required to disclose the
arrangement when the member leaves a relationship between the remuneration of the
scheme and chooses to transfer the benefits highest-paid director in their organisation and
accrued in their former scheme. the median remuneration of the organisation’s
workforce.
The pension figures shown relate to the
benefits that the individual has accrued as a The banded remuneration of the highest paid
consequence of their total membership of the member of the Governing Body in the CCG in
pension scheme, not just their service in a the financial year 2016/17 was £155k-£160k
senior capacity to which disclosure applies. (2015/16, £155k-£160k) excluding employer on
costs.
The CETV figures and the other pension details
include the value of any pension benefits in This was 4.44 times (2015/16, 4.49 times) the
another scheme or arrangement which the median remuneration of the workforce, which
individual has transferred to the NHS pension was £35,225 (2015/16, £34,876). All staff
scheme. remuneration was within the range of £8,040 to
£156,432.
They also include any additional pension benefit
accrued to the member as a result of their In 2016/17, 0 (2015/16: 0) employees received
purchasing additional years of pension service remuneration in excess of the highest-paid
in the scheme at their own cost. member of the Governing Body.

CETVs are calculated within the guidelines Total remuneration includes salary,
and framework prescribed by the Institute and non-consolidated performance-related pay and
Faculty of Actuaries. benefits-in-kind.

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Annual Report 2016/17 Mid Essex CCG

Total remuneration does not include severance Exit packages
payments, employer pension contributions
and the cash equivalent transfer value of There were no exit package payments made by
pensions. the CCG in 2016/17.

Payments for Loss of Office 2.3.2 CCG staff

There were no payments for loss of office made Staff numbers
by the CCG in 2016/17.

Payments to Past Senior Managers As of 31 March 2017, there were 132.33 Whole
Time Equivalent (WTE) employees / Office
In 2016/17 a payment was made to Terry Collin Holders within the CCG. The actual headcount
who was previously an Associate Lay Member. stands at 161.

The payment was in respect of outstanding Information of our staffing numbers according to
remuneration (£840) and travel expenses occupation code as recorded on the Electronic
(£51.60) claims relating to 2015/16 but not paid Staff Record (ESR) can be found below, as of
until April 2017. 31 March 2017:

Please note that Occupational Group codings are given to show the specialist background as
required in the role. Where General Medical Practitioners are stated above, it is a requirement
of the role that they have this specialist knowledge to undertake a specialist Commissioning or
Elected Member role, as opposed to working in the capacity of a GP in a primary care setting.

This concludes the independently audited elements of the Accountability Report, with the
exception of the Parliamentary Accountability and Audit Report at section 2.4.

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Annual Report 2016/17 Mid Essex CCG

Staff gender ratios during 2016/17 and have participated in a
number of initiatives to personally Live Well,
At 31 March 2017, the breakdown of CCG and to support others to Live Well.
(Governing body and rest of CCG) gender
ratios was: From April 2016, our recruitment and appraisal
systems have incorporated the following core
Gender Governing All Both values for all staff:
body other groups
staff • Understand the ‘Live Well’ agenda –
including its main components, how it affects
Female the way the CCG aims to commission
(total staff 9 121 130 services for (or deliver services to) the
number) population of mid Essex

Female 6.65 103.26 109.91 • Positively promote the Live Well philosophy
(WTE) internally and externally to Mid Essex CCG

Male 7 24 31 • Take steps to Be Well – following relevant
(total staff medical advice and taking healthy choices to
number) Be Well, and support colleagues to Be Well

• Participate positively in strategies and
initiatives that support staff to achieve
steps 1-3, and which in turn will help them
to “Work Well” and thus make a personal
difference to the work of the CCG and the
success of the Live Well agenda.

Male 2.72 19.7 22.42
(WTE)

Total 16 145 161
staff
number

Total 9.37 122.96 132.33
WTE

Staff and CCG values

Mid Essex CCG staff are committed to ensuring During 2016 we saw the formation of a
that the population of Mid Essex (which Work Well Social Group, which incorporated
includes a majority of our staff) Live Well.

Staff have embraced our Live Well values

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Annual Report 2016/17 Mid Essex CCG

a number of staff representative Health All recruitment and selection processes
Champions. These staff have been key to a (including both external and internal recruitment
number of healthy living initiatives, including: and promotion) follow the NHS employment
standards, NHS Employers “good practice
• introduction of weekly lunchtime walks guidance” and meet NHS employment checks
standards.
• inter-company five-a-side football
Where job applicants declare a disability, we
ensure that appropriate arrangements are made
throughout the interview and selection process.

The CCG is also a ‘Mindful Employer’,
which means that the CCG demonstrates a
commitment to supporting people with mental
health illnesses both during the recruitment
process and during the course of their
employment with the CCG.

The CCG has access to Human Resources and
Occupational Health advice in order to support
any employees who fall within the scope of the
Equality Act 2010.

Each employee is different and so this
support is tailored depending on individual
circumstances.

• ‘Take a Lunch Break Week’ in which Training and development opportunities are
activities including table tennis, active open to and accessible by all, including those
competitions and opportunities for head with long-standing or newly acquired disabilities.
massage and manicures were held every
day, along with a healthy ‘pot luck lunch’ that We have an Equality and Diversity (E&D)
proved very popular and encouraged our working group that addresses all issues relating
staff to share a healthy home cooked meal to E&D within the CCG and is responsible
together for implementing the NHS Equality Delivery
System (EDS2) and giving due regard to the
• charity fundraisers such as coffee mornings NHS Workforce Race Equality Standards (see
for various good causes section 1.2.4).

• after-work badminton sessions. Staff sickness

Equal opportunities Sickness absence levels for the CCG for
2016/17 are well below the NHS average rate of
The organisation is committed to equal 4.15% (2015/16).
opportunities for all staff.
They are also below the national CCG average
As of 31 March 2017, 3.7% of all staff employed for 2015/16 which stands at 2.61% (information
by the CCG had declared (as part of workforce from NHS Digital). We have seen a reduction in
disclosures) that they have a disability. our overall absence rates this year.

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Annual Report 2016/17 Mid Essex CCG

Date range Average Percentage Executive lead for this group is the CCG
sickness absence Managing Director.
days lost per rate
employee* The CCG carried out a formal follow up staff
survey between September and December
1 January 2016 5.2 2.3% 2016, and results have recently been received
– 31 December and shared with staff. The following points are
among the key messages emerging from the
2016** 2016/17 staff survey.

Source: NHS Digital – Sickness Absence Publication, • We have scored ‘significantly better than
based on data from the ESR Data Warehouse average’ in 19 areas of the survey. We did
not score significantly worse than the CCG
* Based on a headcount of 129 average in any area.
** These figures are for a different reporting period from
those appearing in Note 4.3 of the Financial Statements • 85% of staff say that their managers are
and will therefore not match supportive and value their work.

Absence is supportively managed within the • 92% of staff had (at the time of completion
CCG, with the Absence Management Policy of the survey) undertaken an appraisal.
addressing both short-term and long-term
issues. • Respondents feel that the CCG is a
personal place which is friendly.
Staff are supported through any absences, with Over 93% of participants know our values
return to work meetings held following periods and understand our vision – with 91% of
of absence and referrals made to Occupational staff feeling they are accountable to these.
Health for support in achieving a regular,
sustained attendance at work. Persistent short- • The CCG encourages teamwork and
term absence is addressed through formal collaboration.
procedures.

Where staff members have been significantly • The unifying force that holds the
unwell or developed a disability during the CCG together is loyalty and trust, and
course of their employment, measures are commitment to the CCG runs high with
taken to facilitate reasonable adjustments as emphasis on goal accomplishment.
recommended by Occupational Health.
The CCG continues to promote staff
The CCG’s absence rates overall have engagement in a number of ways, including
remained consistently ‘low’ as compared regular briefing sessions, a ‘Digest’ newsletter,
to national NHS comparator figures and in email updates, all-staff away days, and the
particular national CCG average figures for continuation of a Joint Staff Forum involving
sickness absence. union colleagues and staff representatives
along with our neighbouring CCG, North East
Employee engagement Essex CCG.

The CCG re-launched its staff engagement Organisational development
group – known as the ‘Work Well Engagement
Group’ and comprising representatives from The CCG has offered a wide range of
each Directorate, along with Communications, development opportunities to staff this
HR and Corporate services managers. The year – including the opportunity for formal

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Annual Report 2016/17 Mid Essex CCG

development in a relevant subject area (leading to be taken to reduce risks to staff and other
to professional qualification such as CIMA), in users of CCG premises.
addition to a number of ‘skills’ sessions. The In-
house HR team has run sessions on: 2.3.3 Off-payroll engagements

• Managing Sickness Off-payroll engagements as of 31 March 2017,
for more than £220 per day and that last longer
• Managing Performance than six months are as follows:

• Recruiting for Values and Behaviours

• Induction. Numbers of existing engagements 22
as of 31 March 2017
In addition, we have sourced a number of
‘expert’ sessions from external providers on the Of which, the number that have existed:
following topics:

• Change Management

• Minute-taking and Chairing Meetings • For less than one year at the time 5
Effectively of reporting

• Challenging Conversations

• Developing Relationships • For between one and two years 8
• “Train the Trainer” at the time of reporting
• Medical Terminology for Beginners

• Negotiation Skills • For between two and three years 9
• Resilience at the time of reporting

• Stress • For between three and four years 0
• Time Management. at the time of reporting

Health and safety • For four or more years at the time 0
of reporting
The CCG’s Health and Safety Policy sets out
its responsibilities and those of its employees All existing off-payroll engagements, outlined
under the Health and Safety Work Act 1974. above, have at some point been subject to a
Health and safety, fire safety and manual risk based assessment as to whether assurance
handling are included in the mandatory training is required that the individual is paying the
programme for all CCG staff. right amount of tax and, where necessary, that
assurance has been sought.
Risk assessment and inspections identify health
and safety issues to enable appropriate action

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Annual Report 2016/17 Mid Essex CCG

Number of new engagements, or 5 2.3.4 Expenditure on consultancy
those that reached six months in
duration, between 1 April 2016 and The CCG paid the following for consultancy
31 March 2017 in 2016/17 (with the previous year’s figures
included for comparison).

Number of the above which Year Administrative Programme
include contractual clauses giving
the clinical commissioning group 5 2016/17 £111k £393k
the right to request assurance 5
in relation to Income Tax and 2015/16 £239k £9k
National Insurance obligations

Number for whom assurance has
been requested:

• For whom assurance has been 4 £343k of the total consultancy costs in 2016/17
received relate to spend by the Mid and South Essex
Success Regime which were funded by an
• For whom assurance has not allocation from NHS England.
been received
1

• That have been terminated as 0
a result of assurance not being
received

Although assurance was not received
during this period, a subsequent check was
made using the new HMRC tool and the
intermediaries legislation does not apply to this
Off-Payroll Contractor.

Number of off-payroll engagements 0
of Governing Body members and/
or senior officials with significant
financial responsibility during
2016/17

Number of individuals deemed 16 2.3.5 Pension liabilities
“Governing Body members and/
or senior officials with significant The CCG’s annual accounts detail the
financial responsibility” during accounting policy adopted regarding the NHS
2016/17 (this figure includes both off- pension scheme liabilities. This can be found in
payroll and on-payroll engagements) Note 4.5 of the Financial Statements.

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Annual Report 2016/17 Mid Essex CCG

2.4 Parliamentary Accountability and Audit Report
(subject to audit)

Mid Essex CCG is not required to produce a This concludes the 2016/17 Mid Essex CCG
Parliamentary Accountability and Audit Report. Accountability Report.
Disclosures on remote contingent liabilities,
losses and special payments, gifts, and fees Caroline Rassell
and charges are included in the Financial Accountable Officer
Statements at Notes 31 and 39. An audit
certificate and report are also included in this 30 May 2017
Annual Report, from the next page.

89

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE GOVERNING BODY OF NHS MID ESSEX CCG

We have audited the financial statements of NHS Mid Essex CCG for the year ended 31 March 2017 under the Local Audit
and Accountability Act 2014. The financial statements comprise the Statement of Comprehensive Net Expenditure, the
Statement of Financial Position, the Statement of Changes in Taxpayers’ Equity, the Statement of Cash Flows and the related
notes 1 to 41. The financial reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as interpreted and adapted by
the 2016-17 HM Treasury’s Financial Reporting Manual (the 2016-17 FReM) as contained in the Department of Health
Group Accounting Manual 2016/17 and the Accounts Direction issued by the NHS Commissioning Board with the approval
of the Secretary of State as relevant to the National Health Service in England (the Accounts Direction).

We have also audited the information in the Remuneration and Staff Report that is subject to audit, being:

 The table of salaries and allowances of senior managers and related narrative notes on pages 76 to 80;
 The table of pension benefits of senior managers and related narrative notes on pages 81 to 82;
 The tables of exit packages on page 83;
 The analysis of staff numbers and costs and related notes on page 83;
 The table of pay multiples and related narrative notes on page 82 to 83; and
 The disclosures on Parliamentary accountability on page 89.

This report is made solely to the members of the Governing Body of NHS Mid Essex CCG in accordance with Part 5 of the
Local Audit and Accountability Act 2014 and for no other purpose as set out in paragraph 43 of the Statement of
Responsibilities of Auditors and Audited Bodies published by Public Sector Audit Appointments Limited. Our audit work has
been undertaken so that we might state to the members of the Governing Body of the CCG those matters we are required to
state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the members as a body, for our audit work, for this report, or for the opinions we
have formed.

Respective responsibilities of the Accountable Officer and auditor

As explained more fully in the Statement of Accountable Officer’s Responsibilities set out on pages 52 to 54, the
Accountable Officer is responsible for the preparation of the financial statements and for being satisfied that they give a true
and fair view and is also responsible for ensuring the regularity of expenditure and income. Our responsibility is to audit and
express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing
(UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
We are also responsible for giving an opinion on the regularity of expenditure and income in accordance with the Code of
Audit Practice prepared by the Comptroller and Auditor General as required by the Local Audit and Accountability Act 2014
(the "Code of Audit Practice").

As explained in the Annual Governance Statement the Accountable officer is responsible for the arrangements to secure
economy, efficiency and effectiveness in the use of the CCG's resources. We are required under Section 21(1) (c) of the Local
Audit and Accountability Act 2014 to be satisfied that the CCG has made proper arrangements for securing economy,
efficiency and effectiveness in its use of resources. Section 21(5) (b) of the Local Audit and Accountability Act 2014 requires
that our report must not contain our opinion if we are satisfied that proper arrangements are in place.

We are not required to consider, nor have we considered, whether all aspects of the CCG’s arrangements for securing
economy, efficiency and effectiveness in its use of resources are operating effectively.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of:

 Whether the accounting policies are appropriate to the CCG’s circumstances and have been consistently
applied and adequately disclosed;

 The reasonableness of significant accounting estimates made by the Accountable Officer; and
 The overall presentation of the financial statements.

90

In addition, we read all the financial and non-financial information in the annual report and accounts to identify material
inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become
aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

In addition, we are required to obtain evidence sufficient to give reasonable assurance that the expenditure and income
recorded in the financial statements have been applied to the purposes intended by Parliament and the financial
transactions conform to the authorities which govern them

Scope of the review of arrangements for securing economy, efficiency and effectiveness in the use of resources

We have undertaken our review in accordance with the Code of Audit Practice, having regard to the guidance on the specified
criterion issued by the Comptroller and Auditor General in November 2016, as to whether the CCG had proper arrangements
to ensure it took properly informed decisions and deployed resources to achieve planned and sustainable outcomes for
taxpayers and local people. The Comptroller and Auditor General determined this criterion as that necessary for us to
consider under the Code of Audit Practice in satisfying ourselves whether the CCG put in place proper arrangements for
securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2017.

We planned our work in accordance with the Code of Audit Practice. Based on our risk assessment, we undertook such work
as we considered necessary to form a view on whether, in all significant respects, the CCG had put in place proper
arrangements to secure economy, efficiency and effectiveness in its use of resources

Qualified opinion on regularity

In our opinion, in all material respects the expenditure and income reflected in the financial statements have been applied to
the purposes intended by Parliament and the financial transactions conform to the authorities which govern them, except for
the for the incurrence of £21.9 million expenditure in excess of statutory limits. We referred these/this matter(s) to the
Secretary of State on 25 May 2017 under section 30 of the Local Audit and Accountability Act 2014

Opinion on the financial statements

In our opinion the financial statements:

 Give a true and fair view of the financial position of NHS Mid Essex CCG as at 31 March 2017 and of its net
operating costs for the year then ended; and

 Have been properly prepared in accordance with the Health and Social Care Act 2012 and the Accounts Directions
issued thereunder.

Opinion on other matters

In our opinion:

 The parts of the Remuneration and Staff Report to be audited have been properly prepared in accordance with the
Annual Report Directions made under the National Health Service Act 2006 (as amended by the Health and Social
Care Act 2012); and

 The other information published together with the audited financial statements in the annual report and accounts
is consistent with the financial statements

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters:

 In our opinion the governance statement does not comply with the guidance issued by the NHS Commissioning
Board; or

 We issue a report in the public interest under section 24 of the Local Audit and Accountability Act 2014; or
 We make a written recommendation to the CCG under section 24 of the Local Audit and Accountability Act 2014.

In respect of the following we have matters to report by exception:
 Referral to the Secretary of State

91

We refer a matter to the Secretary of State under section 30 of the Local Audit and Accountability Act 2014 because we have
reason to believe that the CCG, or an officer of the CCG, is about to make, or has made, a decision which involves or would
involve the body incurring unlawful expenditure, or is about to take, or has begun to take a course of action which, if followed
to its conclusion, would be unlawful and likely to cause a loss or deficiency.

On 25 May 2017 we issued a report to the Secretary of State under section 30 of the Local Audit and Accountability Act
2014 reporting the fact that NHS Mid Essex CCG had incurred a cumulative deficit of £21.9 million in its financial statements
for the year ending 31 March 2017, thereby breaching its duty under the National Health Service Act 2006, as amended by
paragraphs 223I (2) and (3) of Section 27 of the Health and Social Care Act 2012, to break even on its commissioning
budget.

 Proper arrangements to secure economy, efficiency and effectiveness

We report to you if we are not satisfied that the CCG has made proper arrangements for securing economy, efficiency and
effectiveness in its use of resources for the year ended 31 March 2017.

Basis for qualified conclusion on reporting by exception

We identified the following:

 Although the CCG met its target of a £3 million surplus for the 2016/17 financial year, this was only achieved
through the use of a number of non-recurrent savings, including the release of the 1% transformation reserve of
£4.4 million.

 The CCG reported a number of areas of overspend during the year and as a result has an underlying deficit of £3.9
million in 2016/17.

 The CCG only delivered £11.9 million (66%) of its total 2016/17 Quality, Innovation, Productivity and Prevention
plan of £18 million.

 The CCG has a £9 million control total surplus for 2017/18. To meet this target, the CCG will need to deliver a QIPP
plan of £23.5 million. The CCG has assessed £9.8 million of the QIPP plan schemes as a high risk and £8.3 million
as medium risk of delivery. As a result the CCG is reporting that it has not yet been possible to identify expenditure
reductions to deliver the £9m control total surplus and it is extremely likely that the CCG will not be able to deliver
the control total.

These issues are evidence of weaknesses in proper arrangements for planning finances effectively to support the sustainable
delivery of strategic priorities and maintain statutory functions

Qualified conclusion on reporting by exception

On the basis of our work, having regard to the guidance issued by the C&AG in November 2016, with the exception of the
matters reported in the basis for qualified conclusion paragraph above, we are satisfied that, in all significant respects, the
CCG put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year
ended 31 March 2017.

Certificate

We certify that we have completed the audit of the accounts of NHS Mid Essex CCG in accordance with the requirements of
the Local Audit and Accountability Act 2014 and the Code of Audit Practice.

Debbie Hanson
for and on behalf of Ernst & Young LLP
Luton
30 May 2017

92

NHS MID ESSEX
CLINICAL COMMISSIONING GROUP

ANNUAL ACCOUNTS 2016-17

.

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17 Page Number

CONTENTS 1
2
The Primary Statements: 3
4
Statement of Comprehensive Net Expenditure for the year ended 31st March 2017
Statement of Financial Position as at 31st March 2017 5
Statement of Changes in Taxpayers' Equity for the year ended 31st March 2017 12
Statement of Cash Flows for the year ended 31st March 2017 12
13
Notes to the Accounts 16
Accounting policies 17
Other operating revenue 17
Revenue 17
Employee benefits and staff numbers 17
Operating expenses 17
Better payment practice code 18
Income generation activities 18
Investment revenue 19
Other gains and losses 20
Finance costs 20
Net gain/(loss) on transfer by absorption 20
Operating leases 21
Property, plant and equipment 21
Intangible non-current assets 21
Investment property 22
Inventories 22
Trade and other receivables 22
Other financial assets 23
Other current assets 23
Cash and cash equivalents 23
Non-current assets held for sale 24
Analysis of impairments and reversals 24
Trade and other payables 24
Other financial liabilities 24
Other liabilities 25
Borrowings 25
Private finance initiative, LIFT and other service concession arrangements 26
Finance lease obligations 26
Finance lease receivables 27
Provisions 28
Contingencies 28
Commitments 29
Financial instruments 31
Operating segments 31
Pooled budgets 31
NHS Lift investments 31
Related party transactions
Events after the end of the reporting period
Losses and special payments
Third party assets
Financial performance targets

Please note that occasionally £1k differences occur between the primary statements and the notes to the
accounts and within individual lines which is unavoidable due to rounding discrepancies.

Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

Statement of Comprehensive Net Expenditure for the year ended
31 March 2017

Note 2016-17 2015-16
£'000 £'000
Income from sale of goods and services 2
Other operating income 2 (1,869) (1,339)
Total operating income (931) (380)

Staff costs 4 (2,800) (1,719)
Purchase of goods and services 5
Depreciation and impairment charges 5 7,734 6,893
Provision expense 5 443,489 427,506
Other Operating Expenditure 5
Total operating expenditure 36 29
1,336 1,081
Net Operating Expenditure
230 417
Comprehensive Expenditure for the year ended 31 March 2017 452,825 435,926

450,025 434,207

450,025 434,207

The notes on pages 5 to 31 form part of this statement.

Page 1



Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17 General fund Total
£'000 reserves
Statement of Changes In Taxpayers Equity for the year ended
31 March 2017 (27,108) £'000
0
Changes in taxpayers’ equity for 2016-17 (27,108)
(27,108)
Balance at 01 April 2016 0
Transfer between reserves in respect of assets transferred from closed NHS (450,025) (27,108)
bodies
Adjusted NHS Clinical Commissioning Group balance at 31 March 2017 (450,025) (450,025)
Changes in NHS Clinical Commissioning Group taxpayers’ equity for 2016-17
Net operating expenditure for the financial year 450,132 (450,025)
(27,001)
Net Recognised NHS Clinical Commissioning Group Expenditure for the Financial 450,132
Year (27,001)

Net funding Total
Balance at 31 March 2017 reserves

Changes in taxpayers’ equity for 2015-16 General fund £'000
£'000
Balance at 01 April 2015 (27,447)
Transfer of assets and liabilities from closed NHS bodies as a result of the 1 (27,447) 0
April 2013 transition 0
Adjusted NHS Clinical Commissioning Group balance at 31 March 2016 (27,447)
(27,447)
Changes in NHS Clinical Commissioning Group taxpayers’ equity for 2015-16 (434,207)
Net operating expenditure for the financial year (434,207)
(434,207)
Net Recognised NHS Clinical Commissioning Group Expenditure for the Financial (434,207) 434,545
Year 434,545 (27,108)
Net funding (27,108)
Balance at 31 March 2016

The notes on pages 5 to 31 form part of this statement.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

Statement of Cash Flows for the year ended
31 March 2017

Cash Flows from Operating Activities Note 2016-17 2015-16
Net operating costs for the financial year £'000 £'000
Depreciation and amortisation 5
(Increase)/decrease in trade & other receivables 17 (450,025) (434,207)
(Increase)/decrease in other current assets 23 36 29
Increase/(decrease) in trade & other payables 30
Increase/(decrease) in other current liabilities 30 624 (1,883)
Provisions utilised 0 0
Increase/(decrease) in provisions
Net Cash Inflow (Outflow) from Operating Activities (1,179) 1,053
0 0

(850) (774)
1,336 1,081
(450,058) (434,700)

Cash Flows from Investing Activities 0 1
(Payments) for property, plant and equipment 0 (61)
(Payments) for intangible assets 0 (60)
Net Cash Inflow (Outflow) from Investing Activities
(450,058) (434,760)
Net Cash Inflow (Outflow) before Financing

Cash Flows from Financing Activities 450,132 434,545
Grant in Aid Funding Received 450,132 434,545
Net Cash Inflow (Outflow) from Financing Activities
74 (215)
Net Increase (Decrease) in Cash & Cash Equivalents 20

Cash & Cash Equivalents at the Beginning of the Financial Year (693) (478)
(619) (693)
Cash & Cash Equivalents (including bank overdrafts) at the End
of the Financial Year

The notes on pages 5 to 31 form part of this statement.

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Mid Essex Clinical Commissioning Group - Annual Accounts 2016-17

Notes to the financial statements

1 Accounting Policies

NHS England has directed that the financial statements of clinical commissioning groups shall meet the accounting requirements
of the Group Accounting Manual issued by the Department of Health. Consequently, the following financial statements have been
prepared in accordance with the Group Accounting Manual 2016-17 issued by the Department of Health. The accounting policies
contained in the Group Accounting Manual follow International Financial Reporting Standards to the extent that they are
meaningful and appropriate to clinical commissioning groups, as determined by HM Treasury, which is advised by the Financial
Reporting Advisory Board. Where the Group Accounting Manual permits a choice of accounting policy, the accounting policy
which is judged to be most appropriate to the particular circumstances of the clinical commissioning group for the purpose of
giving a true and fair view has been selected. The particular policies adopted by the clinical commissioning group are described
below. They have been applied consistently in dealing with items considered material in relation to the accounts.

1.1 Going Concern

These accounts have been prepared on the going concern basis. The clinical commissioning group delivered a £3m surplus in
2016/17 which has reduced the accumulated deficit to £21.9m.

Public sector bodies are assumed to be going concerns where the continuation of the provision of a service in the future is
anticipated, as evidenced by inclusion of financial provision for that service in published documents.

1.2 Accounting Convention

These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant
and equipment, intangible assets, inventories and certain financial assets and financial liabilities.

1.3 Pooled Budgets

Where the clinical commissioning group has entered into a pooled budget arrangement under Section 75 of the National Health
Service Act 2006 the clinical commissioning group accounts for its share of the assets, liabilities, income and expenditure arising
from the activities of the pooled budget, identified in accordance with the pooled budget agreement.

The CCG has not been part of any pooled budget arrangements in 2016-17. Mid Essex clinical commissioning group and Essex
County Council have continued to operate a Better Care Fund during 2016-17 under a Section 75 agreement. The arrangements
under which the Better Care Fund has operated during 2016-17 do not constitute a pooled budget as the risks of each scheme
have remained with the respective commissioners. Each scheme within the Better Care Fund has been reviewed and accounted
for on an appropriate basis (see Note 35).

1.4 Critical Accounting Judgements & Key Sources of Estimation Uncertainty

In the application of the clinical commissioning group’s accounting policies, management is required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from those estimates and the estimates and underlying assumptions are continually reviewed.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future periods.

1.4.1 Critical Judgements in Applying Accounting Policies

The following are the critical judgements, apart from those involving estimations (see below) 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:

Accounting provisions that were held by Mid Essex PCT as at 31 March 2013 were passed to NHS England. This included a
provision of £19.7m for settling legacy continuing healthcare retrospective claims. NHS England are operating this as a risk share
pool and the clinical commissioning group’s required contribution to the pool in 2016-17 was £1.053m. The clinical commissioning
group accrued for the 2016-17 contribution in the 2015-16 accounts as it was a known legal and constructive obligation arising as
a result of a past event.

NHSE have confirmed that they will not be seeking any further contributions from clinical commissioning groups in 2017-18. The
clinical commissioning group's arrangements in respect of settling NHS continuing healthcare retrospective claims since 31 March
2013 are disclosed in Note 30 to these financial statements.

Mid Essex Clinical Commissioning Group and Essex County Council have continued to operate a Better Care Fund during 2016-
17 under a Section 75 agreement. The arrangements under which the Better Care Fund has operated during 2016-17 do not
constitute a pooled budget as the risks of each scheme have remained with the respective commissioner.

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