FINANCE: The foundation trust has identified its commissioner’s plans to reduce demand for non-elective treatment as the key contractual risk it faces in 2011-12.

“The key risks within the contract relate to delivery of the PCT demand management initiatives and the subsequent impact on the level of non elective medical activity, reductions in activity will clearly assist the trust’s financial position as a significant element is paid at 30 per cent,” its newly published three-year plan states.

It continues: “The trust ‘lost’ income of £1.1m in 2010-11 and further growth is expected in 2011-12 at circa 4.4 per cent, offset in part by one planned PCT initiative regarding the provision of additional capacity in the community.

“This was a key area of over performance in 2010-11 whereby the PCT had estimated reductions of £5.2m of activity but in the event initiatives did not deliver reductions in the planned areas, although the impact in capping potential growth is harder to assess. As a result the trust did over perform in key areas incurring some premium costs and underperformed in other unexpected areas.

“For 2011-12 the total included in the contract is a reduced figure of £1.6m and the exposure to a variance from plan is therefore substantially reduced.”

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