Issuu

Annual Report

2020 - 2021

The performance report 2020-21

The accountability report 2020-21

The financial statements 2020-21

Contents

The performance report 2020-21 Overview The overview section provides a summary of our hospital, how we have performed over the year and the challenges we have faced.

Foreword

One year on, and we could not have predicted the severity of the second wave of the COVID-19 pandemic and the significant and profound impact this would have on all of us and all of our community. It is vital that we keep our focus on managing the virus and its variants as we look to the future and we are in no doubt that our PAHT people will continue to meet the challenge and provide compassionate care to all of our patients and all of the people they work alongside. With the pandemic as our backdrop, we are incredibly proud of the hard work and commitment of our people in their response and of the significant changes that our people have put in place and the many ways they have responded to and adapted the ways that patient care is delivered. Just one of these changes, which we will continue to enhance and provide to our patients, are virtual appointments. Many of our patients have told us how helpful they find virtual appointments in terms of

fitting them around their work and family commitments, without the need to travel. As technology extends, we will be able to offer more video call appointments and bring the benefits of a virtual face-to-face appointment to a wider range of patients. During the pandemic, in line with national guidance, we had to pause visitors coming to the hospital. We recognise that this was a difficult change for many people and we thank our patients’ friends, families and loved ones for their understanding and support. To enable contact beyond a phone call, we introduced a new initiative, Message to a loved one, where colleagues have volunteered to ensure messages and cards have been delivered across the hospital and, additionally, that patients could connect with their loved ones through a video call on a PC or tablet – enabling people to see each other too. Throughout the last year, the improvement action plans within our PAHT 2030 strategy have continued. Aligned to the NHS Ten Year Plan, the strategy sets out five key areas of focus and the objectives that, together, we are striving to achieve. Many of the initial actions are set alongside the new hospital project and will put us in a position to provide improved levels of high quality care, implement changes and be ready to transition into a new hospital. It is good to be part of the conversations and to see our people working collaboratively to ensure that the needs of all patients are considered and included in the changes and plans for the future.

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A year ago, as we sat down to write the foreword for our annual report, we had just come out of the intense first wave of the COVID-19 pandemic. We were facing the unprecedented challenges, having cared for hundreds of COVID-19 positive patients, of how we were going to support our colleagues through the impact that the previous few months had had on them and how we were going to continue to support our local community with the much needed ongoing care for COVID-19 and non-COVID-19 conditions that they required.

The past year has been a year unlike any other and a year of unprecedented demand on all of us. It is thanks to the hard work, compassion and commitment to patient care of each and every member of the PAHT team that we have achieved all that we have in the last twelve months. We have also been honoured to receive the generous support and kindness from

A message from Steve Clarke, chair A final change to update you about is that I will be stepping down from my role and leaving PAHT. I took on the role of chair in December 2018 and will be leaving in June 2021. I have thoroughly enjoyed my time at PAHT and want to thank everyone for their hard work that they continue to give to patient care.

Steve Clarke Chair

local people from the very start of the pandemic to the present day, culminating in the award of a Civic Award from Harlow Council to all of the staff at PAHT for their continuous commitment and contribution to the community of Harlow. The award was thanks to the nominations of many members of the local community and their appreciation, touching comments and positive feedback has meant so much to us. The COVID-19 pandemic continues and we remain mindful of the impact on our people and making sure they have the help and support they need in terms of their health and wellbeing as, every day, they continue to provide high quality care to our patients and support their colleagues too. They are amazing. Best wishes

Steve Clarke Chair

Lance McCarthy Chief executive

The performance report

The new Princess Alexandra Hospital project is also continuing at pace as the PAHT team bring together a very detailed and extensive outline business case that will be submitted to the national New Hospital Programme at the end of the year. Creating a plan to build a new hospital for the 21st century is a huge project to bring together and, as with any project, the progress is thanks to our team of skilled specialists who are working behind the scenes to ensure that every detail is being considered and included. It is fantastic to know that the outline business case continues to progress at pace and that we have many exciting stages ahead of us as we work towards building and welcoming our people and patients to our new hospital.

The year 2020-21 has been an unprecedented time. We are pleased to share with you a message from Lance McCarthy, chief executive, shared with all our people to mark the first 12 months of the COVID-19 pandemic.

Our year of COVID-19... Dear all

We have swabbed more than 23,000 patients for COVID; we have treated more than 1,800 positive patients; we have seen 1,200 of them discharged; but sadly we have seen nearly 500 die; too soon and from a virus we knew nothing about a year ago.

We have worked extra hours, in different teams, in different roles; used different drugs, in different ways; measured, monitored and tracked numbers like never before and we have developed a new vocabulary - COVID, lockdown, tiers, lateral flow test, PCR test, Samba, social distancing, hands face and space, stay safe, SIREN, furlough, shielding, clinically extremely vulnerable, surge levels. We have experienced more anxiety, adrenaline and pride than usual but we have also been more scared, exhausted and traumatised than usual.

We’ve experienced the strangest Christmas and New Year in most We have made hundreds of decisions of our lives; we’ve home schooled; about issues we would never have we’ve worked from home and we’ve thought about a year ago; we have transitioned in to a virtual world; for changed and transformed buildings, families to speak to their loved ones in clinical pathways, teams and ways of our care, for outpatient appointments, for working at a phenomenal pace; we have meetings, or to speak to our family and built things, moved things, lent things, friends. Zoom, Teams, WebEx...“you’re borrowed things and procured things that on mute!” we would never have dreamed of. We all now think differently. We have made new friends with colleagues that we never really knew a We have a ‘red ED’ and a ‘red ITU’; we year ago and, sadly, we have lost old have run at more than 600% critical friends. Colleagues, family members, care capacity; we have turned wards to personal friends, gone too soon and COVID-19 wards, back to non-COVID-19 leaving holes in our hearts. and back to COVID-19 again; we have rolled out 1,000s of laptops for virtual We have also embraced diversity, outpatient appointments and home equality and inclusion; George Floyd’s working; we have moved colleagues off death in Minneapolis and the realisation site; we have built a temporary mortuary; in the first wave of the increased we have installed screens between vulnerability of our BAME colleagues bed spaces; we have run loads of new and friends to COVID-19, affected us assays; we have set up a health and all. We have done and will always work wellbeing hub and an absence line. We together regardless of age, sex, sexual have all done things differently.

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The 29 January 2021 marked a year since the first COVID-19 patient was admitted to a UK hospital. We didn’t admit our first patient until 15 March, but what a year. An unprecedented year in our lifetimes, an extraordinary year, an exhausting year, a sad year and a truly remarkable year in terms of what we have all done.

Through all of this, we have built a new two-storey adult assessment unit, a sanctuary space and prayer room, a junior doctors’ mess, a refurbished paediatric ward, a new fracture clinic and an EBME workshop. We have looked out for each other and others less fortunate and we have been looked out for by others and seen the generosity of many. Infection prevention and control is more centre stage than ever, personal protective equipment (PPE) guidance at the front of our minds, scrubs (raspberry especially) worn almost everywhere and face masks part of everyday life. We’ve celebrated, we’ve thanked, we’ve been kind and we’ve been recognised, with scientists, technicians, nurses and doctors all receiving national awards, including an MBE. And as we welcomed in the new year, some of our amazing colleagues were busy setting up a vaccination hub in record time; administering more than 6,500 doses to local health and care workers in just four weeks, giving us all some hope and hopefully some immunity. It has been a year of huge change and huge emotion. We’ve been tested and pushed to our limits and beyond. We’ve had good days and great days, bad days and terrible days. It has been a year of huge contrasts,

a year of opposites and a year that we wouldn’t want to see the likes of again. Through it we have treated 1,000s of patients, cared for them, put their minds at rest and made them better. The pandemic, the battle against COVID-19, is not over, but we’re slowly winning it. We will all need more health and wellbeing and psychological support than ever and being civil and kind has never been more important; but we will get back to ‘normal’, we will stop wearing masks everywhere, we will get to go out again and we will keep caring for sick members of the community. Thank you. Thank you to all the doctors, nurses, midwives, pharmacists, scientists, technicians, radiographers, physios, dieticians, OTs, SALTs, ODPs, all other AHPs, HCSWs, MCAs, MLSOs, PAs, optometrists, audiologists, phlebotomists, domestics, porters, caterers, housekeepers, drivers, estates team, librarians, chaplains, assistants, associates, students, volunteers and all our administrative and corporate colleagues from all professions. You have all been amazing. #TeamPAHT Best wishes

Lance McCarthy Chief executive

The performance report

orientation, race, religion, disability and ethnicity.

The purpose and activities of the organisation The Princess Alexandra Hospital NHS Trust (PAHT) is a 414 bedded hospital with a full range of general acute services, including; a 24/7 accident and emergency department (A&E), plus an intensive care unit (ICU), a maternity unit (MU) and a level two neonatal intensive care unit (NICU). During 2021, the trust opened a new building on the main site that holds the adult assessment unit and same day emergency care unit, both are services that improve patient experience for those patients requiring urgent care. The trust serves a core population of around 350,000 and is the natural hospital of choice for people living in West Essex and East Hertfordshire. In addition to the communities of Harlow and Epping, the trust serves the populations of Bishop’s Stortford and Saffron Walden in the North, Loughton and Waltham Abbey in the South, Great Dunmow in the East, and Hoddesdon and Broxbourne in the West. Its extended catchment incorporates a population of up to 500,000. The trust owns the main hospital site in Harlow, and also operates outpatient and diagnostic services out of the Herts and Essex Hospital, Bishops Stortford, and St Margaret’s Hospital, Epping. The operation of these facilities forms part of the longer term strategy of bringing services closer to where patients live and making services, where appropriate, more accessible and easily available to patients.

Directory of services Adult assessment services incorporating ambulatory care and same day emergency care Audiology

Endoscopy

Maxillo-facial surgery

Radiology

Ear, nose and throat

Medical oncology

Respiratory medicine

Breast services

Frailty service

Breast surgery

Gastroenterology

Neonatal critical Rheumatology care - special care baby unit and neonatal community nurses Newborn hearing Specialist palliative screening care team

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The trust operates over forty different services to meet the needs of its patients (see service portfolio below):

The purpose and activities of the organisation Cardiology

General medicine

Neurology

Speech and language therapy

Chemotherapy

General surgery

Obstretics

Surgery inpatients

Clinical haematology

Genito-urinary medicine

Ophthalmology

Transfusion services

Clinical oncology

Geriatrics

Oral surgery

Tongue tie service

Colposcopy and hysteroscopy services

Gynaecology including:

Oncology services Trauma and orthopaedics

Gynaecology ambulatory service Community High dependency Paediatrics Urology midwifery unit - inpatients, outpatients and ambulatory care Colorectal services Intensive care unit Paediatric diabetic Vascular services medicine Day surgery Dermatology Dietetics Early pregnancy unit Emergency department Endoscopy services

Infection, prevention and control services Maternity:

Paediatric emergency department Pathology

Blood tests

Antenatal clinic Ultrasound scanning Labour Ward Antenatal Ward Postnatal Ward Maternal foetal assessment unit Breast feeding support Birthing unit

Pharmacy services Research and development

Mortuary and bereavement services Patient appliances Patient at home

Physiotherpay and occupational therapy Perioperative medicine

Tissue viability

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Termination of pregnancy services

Strategic objectives The trust’s vision is to deliver outstanding healthcare to the local community and the trust’s mission is to put quality first in everything that is done. Over the course of 2020-2021 the trust has been working towards the launch of PAHT2030. PAHT2030 provides our roadmap to ‘outstanding’ and delivery of services from a modern, fit for purpose new hospital through five strategic priorities:

1. Digital health 2. Our new hospital 3. Improving our care 4. Our culture 5. Corporate transformation

Underpinning our five priorities and the way in which we achieve these ambitions are our trust goals, objectives and values.

Outstanding We will deliver healthcare that our patients deserve and makes us proud. Integrated We will work as one to provide joined up healthcare that puts our patients first. Modern We will always use up to date treatments, technology and facilities.

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Courageous goals

Strategic objectives Objectives

Patients We will continue to improve the quality of care and experiences that we provide our patients, integrating care with our partners and improving our CQC rating. People We will support our people to deliver high quality care within a compassionate and inclusive culture that improves engagement, recruitment and retention and results in further improvements in our staff survey results. Performance We will meet and achieve our performance targets, covering national and local operational, quality and workforce indicators. Places We will maintain the safety of and improve the quality and look of our places and we will work with our partners to develop an outline business case for a new hospital, aligned with the further development of our local integrated care partnership. Pounds We will manage our pounds effectively and modernise our corporate services to achieve our agreed financial control for 2020/2021 and our local system control total.

Respectful Treating others as we would wish to be treated Caring Always putting patients first Responsible Doing what we say we are going to do Committed Striving to be the best The development of PAHT2030 over 2020-2021 has been set against a challenging and changing NHS landscape which has emphasised the importance of a strong organisational strategy to provide our communities, staff and partners with the assurance that we can deliver our ambitions. PAHT2030 has been developed from the ground up, with input from over 300 members of our staff to understand where real change is required to deliver outstanding care.

The NHS Long Term Plan is an ambitious ten year plan focused on new service models; prevention and health inequalities; significant improvements in the quality of care and patient outcomes; strengthened workforce; digital transformation; financial efficiency and value for money for the taxpayer. The trust’s one vision, three goals and five Ps together with the strategic priorities all bring together our ambition and closely align it to the NHS Long Term Plan.

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Values

Strategic objectives

Models of care

Integrated care systems

Although integrated care has been a focus for the trust since 2015, in 2020-2021 we have worked in partnership with the newly formed Hertfordshire and West Essex Integrated Care System and more localised One Health and Care Partnership to develop new models of care and begin holding joint accountability for delivery of these models across our local health and care system. We are doing this because we believe working together is the only way we can truly meet the holistic needs of our population.

Developed with and supported by our integrated care system (ICS) and local One Health and Care Partnership our new models of care have provided a foundation to design our new hospital. 2020-2021 saw the trust and wider system partners set out a new and innovative approach to care delivery: the development of a Learning Health System culture, which will champion and develop a patient-centric and data driven health system that continually strives to improve with a relentless focus on outcomes.

Our ambitious care development programme took place over June-September 2020, working with a range of health and care professionals from across the trust and wider health and care system to develop models of care which push the boundaries of how healthcare is planned and delivered. Underpinned by place based planning and developed through innovative challenge sessions to understand how we and our system partners can collaborate and deliver real, evidence based integrated care and population health management.

Using the new hospital programme as a springboard, we have developed a comprehensive digital strategy, keeping us relentlessly focused on our ambition of becoming the most technological and digitally enabled hospital in the UK, allowing us to transform the care we deliver and the experience of our people. The digital strategy outlines how PAHT will deliver world class care, in a paperless world supported and transformed through a digital culture that is right at our core.

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Our ambition was strengthened further in February 2021 when the Department of Health and Social Care published the White Paper ‘Integration and innovation: working together to improve health and social care for all’. The paper proposes greater flexibility for local health and care organisations to work in partnership through Integrated Care Systems (ICS) to deliver localised models of care to support their populations, which is exactly what we want to achieve with our partners for our local community.

New hospital

Between January-March 2020 the trust built its new hospital programme team consisting of a clinical leadership team, full project management team, health planners, and design team. Over 2020-2021 the new hospital programme team have worked tirelessly to deliver the following elements of the outline business case: y A full demand and capacity modelling exercise determining the predicted population growth and capacity required over the next 20 plus years. y A fully developed integrated and innovative model of care fit for the next 20 plus years. y An ambitious digital strategy illustrating how the trust will become the most technically advanced hospital in the country. y A net zero carbon strategy for the new hospital.

• A set of clinically designed 1,200 layouts for each department in the hospital that will support the delivery of care for the foreseeable future. • In support of our commitment to continual public engagement, a series of ‘Virtual Town Hall’ events with local communities outlining our vision for the new hospital and collecting feedback on a number of design ideas. • A staff engagement programme providing space for over 250 members of staff to influence the design of the new hospital. The outline business case will be submitted to national regulators in autumn 2021.

Over 100 members of the public turned up to each event to quiz our senior staff and project architects on designs for the new hospital welcome spaces. They said: “It is clear the new hospital team has done much work, the results of which are beginning to look rather impressive” Public event attendee “Really great ideas and like the fact you are involving us” Public event attendee

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Never before has the reality of a new hospital been so close, having submitted our pre-consultation business case in September 2019, coinciding with the launch of the government’s Health Infrastructure Plan (HIP) Programme. In October 2019, the Department of Health announced that PAHT would be one of six trusts in the first wave of the HIP programme, giving the go ahead for PAHT to develop its outline business case, with a new hospital build on a greenfield site as the preferred way forward. With the development of a national new hospital programme, we are one of the frontrunner eight organisations working closely with the national team to deliver a new hospital for Harlow and surrounding areas.

Key risks

Going concern The trust board has assessed the Trust’s ability to continue for the foreseeable future in accordance with the Department of Health and Social Care (DHSC) group accounting manual. Consequently, as in previous years, the trust has prepared its 2020-21 Annual Accounts on a going concern basis. In approving the trust’s annual accounts the board of directors has satisfied itself that the trust has prepared the accounts on the basis of going concern recognising the following: The directors of the trust have considered whether there are any local or national policy decisions that are likely to affect the continued funding and provision of services by the trust. The trust is a member of the Hertfordshire and West Essex Integrated Care System (ICS). The ICS has published its Strategic Delivery Plan and NHS Long Term Plan response for the five year period 202021 to 2024-25 and this plan includes the continued provision of services by the trust.

In addition, the trust continues to develop an Outline Business Case to build a new hospital, which is being supported by a variety of stakeholders. No circumstances were identified causing the directors to doubt the continued provision of NHS services. For the 2020-21 financial year, the trust achieved a surplus of £1.8m against a planned deficit of £0.4m. Income from our local Clinical Commissioning Groups was largely based on the adapted finance regime introduced in response to the COVID-19 pandemic and this provided predictability and improved cash flow with the trust finishing the year with a £65.2m cash balance. Additional costs arising from the pandemic were reimbursed in the first half the year and incorporated into a block payment basis for the second half of the year.

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The trust has a Board Assurance Framework (BAF) which provides a mechanism for the board to monitor risks to delivery of the trust’s strategic objectives. The highest scoring risks on the BAF throughout 2020-21 were variation in clinical outcomes, our estate, delivery of the emergency department standard and our finances. The risks are reviewed monthly and progress is monitored by the relevant board committees and trust board every other month. The BAF is published within the board papers on the trust’s website.

In April 2020, the DHSC and NHS England and NHS Improvement (NHSE/I) announced reforms to the NHS cash regime for the 2020-21 financial year.

In 2019-20, the trust achieved £9.9m (or 3.4%) of cost improvements and therefore is reasonably assured of the achievability of this target.

For 2021-22 the current financial funding arrangements will remain in place for the first half of the year, with additional funding to support elective recovery post COVID. The going concern assessment is made up to 30 June 2022. The national financial arrangements for the second half of the year are not fully known at this stage and while the implications of COVID-19 should be greatly reduced, there is likely to be some ongoing effect and, potentially, additional funding for this. The trust’s income is largely based on commissioner block contracts which will continue throughout the second half of the year. Reducing the trust’s underlying cost base and increasing efficiencies is essential with the focus on delivering a cost-improvement programme of £6.7m (or 2.2%).

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The trust has prepared a cash forecast During 2020-21 existing DHSC interim modelled on the above expectations revenue loans as at 31 March 2020 for funding during the going concern were extinguished and replaced with period to 30 June 2022. the issue of Public Dividend Capital (PDC) to allow their repayment. The cash forecast shows sufficient Consequently, the trust received PDC liquidity for the trust to continue of £146.2m to repay these loans which to operate during that period with had accumulated from prior year no need to borrow. In addition, the deficits. trust has access to working capital arrangements should the need for this In addition, capital loans of £4.3m were arise. also extinguished and replaced with PDC and therefore total net assets In conclusion, these factors, and the increased by £150.5m. anticipated future provision of services in the public sector, support the trust’s This strengthened the value of the adoption of the going concern basis for trust’s statement of financial position the preparation of the accounts. and means that the trust is no longer required to generate surpluses to service this historic debt.

Performance analysis As part of the national response to COVID-19, operational planning arrangements for 2020-21 were suspended. Operational planning was replaced with an ‘adapted financial regime’. As part of these arrangements all NHS organisations were required to deliver financial balance over the first half of the financial year. This was achieved by a move away from commissioner contracts based on activity payments mechanism (payment by results) and replaced with block/fixed contract arrangements. In addition to block contract payments NHS providers received ‘top-up’ payments. These payments, along with a reimbursement process to recover costs associated with the response to COVID-19 ensured the trust’s delivered financial balance. From 1 April to 30 September 2020 the trust therefore delivered a breakeven position. From September 2020, the block contract arrangements continued but the ‘top up’ payment mechanism ceased. For the second half of the financial year, September 2020 to March 2021, a control total was agreed with our Integrated Care System. The financial plan was set at a £391k deficit. This became the basis on which our financial performance was measured. The trust delivered a £1.8m surplus against our deficit plan (a £2.2m improvement). This improved financial performance can be attributed to nonrecurrent transactions.

Operating and financial review

The key financial results for 2020-21 are that the Trust delivered a surplus of £1,816k. This was an improvement on the 2019-20 financial performance.

Cost improvement

Even during the course of the pandemic, the trust made efficiency savings of £6.2m during the year through our Cost Improvement Programme without impacting the quality or safety of the care we provide.

Capital investment

As the trust has been in deficit for a number of years, this had previously led to significant constraints on being able to generate sufficient internally funded capital to be able to invest in our estate and facilities. In 2020-21 we secured additional capital funding. We had a strategic capital investment plan and associated cash management plan in line with our local investment priorities. As a result we have been able to make investments that improved our estate which has helped us to be able to deliver high quality care to our patients and provide a better working environment for our people. The trust has made capital investments of £47.7m. In 2020-21 key capital projects have included: y the Adult Assessment Unit y the Fracture Clinic Unit y the mortuary and staff facilities y a new training facility y equipment to support the NHS COVID-19 response y critical infrastructure developments y ICT investment including further rollout of wireless technology y new CT and MRI equipment

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Financial performance

Financial performance y continued investment in backlog combination of internal and external maintenance to ensure our estate is funding. safe y the development of our new hospital outline business case Looking forward to 2021-22, there are plans for major capital investment projects which will continue to transform the care that we are able to provide with the purchase of a further CT scanner and other medical equipment. We will continue to seek more capital investment to provide the best possible care to our local population now and into the future.

Looking ahead

Block contract arrangements with commissioners will continue and will be uplifted for national inflationary uplifts offset by efficiency requirement. The integrated care system (ICS) will receive additional funding allocations e.g. growth and COVID-19, which will be distributed to ICS partners. During the first half of the financial year, we will be eligible to receive additional funding from an ‘Elective Recovery Fund’. This fund will be available to support us in performing additional activity and accelerate the restoration of activity following COVID-19. We have also developed our capital plan for 2021-22. The plan is risk based inclusive of the continuation and the completion of capital commitments entered into during 2020-21. The plan also includes planned new strategic investments and continuation of progression towards our new hospital. Our capital programme for next year is circa £49m which is funded by a

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Looking ahead to 2021-22, the current national guidance is to continue the principles of the ‘Adapted Financial Regime’ into the first half of 2021-22.

Financial performance Key financial results

Accounts highlights

2020-21 £000’s

2019-20 £000’s

Surplus for year

1,816

Public dividend capital dividend payable Value of property, plant and equipment

3,034

137,845

117,405

Value of borrowings (including loans)

150,998

Cash at 31 March

65,242

1,144

Creditors – trade and other

49,070

27,068

Debtors – trade and others

8,381

49,837

Revenue from patient care activities

267,835

246,747

Clinical negligence costs

13,010

9,924

Gross employee benefits

203,722

193,119

Better payment practice code The code sets out the following obligations for NHS organisations in respect of the payments it makes to its suppliers principally: y payment terms are to be agreed with suppliers before a contract commences y payment terms are not to be varied without prior agreement with a supplier y by default, bills are to be settled within 30 days unless other terms have been agreed During the COVID-19 pandemic, and where possible and appropriate, we have accelerated payments to suppliers, recognising our responsibility to support all businesses in sustaining cash flow. As such, performance in 2020-21 was an improvement on 2019-20.

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The following table shows a range of financial performance values taken from the accounts.

Financial performance Performance is summarised as follows:

Anti-fraud and bribery

We are committed to providing and maintaining an absolute standard of honesty and integrity in dealing with our assets. We are committed to the elimination of fraud, bribery and illegal acts within PAHT and ensure rigorous investigation and disciplinary or other actions as appropriate if allegations are made. We utilise best practice, as recommended by the NHS Counter Fraud Authority.

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We continue to work to maintain an anti-fraud, bribery and corruption culture and we have a range of policies and procedures to minimise risk in this area.

Operational performance Our operational performance against national and local standards is monitored and reviewed at: y Regular performance review meetings between members of the executive team and each health care group y The Urgent Care Board y The Elective Access Board y The Cancer Board y Senior management team meetings y The Performance and Finance Committee y Trust board meetings

local independent sector provider hospital supported us by allowing activity to be carried out at their location which allowed us to continue cancer and urgent elective surgery, along with associated diagnostics.

Targets and national standards Delivery of all national standards has been significantly impacted by COVID-19 and the increased volume of emergency patients requiring care. The requirement to maintain separate urgent COVID-19 and nonCOVID pathways and flows through the hospital, the change of many wards to focus on emergency care and the transfer of theatre staff to critical care significantly reduced the volume of elective activity that could be delivered. Full elective operating was paused on The Princess Alexandra Hospital main site in March 2020 and did not recommence until July 2020. The

The performance report

An integrated performance report is presented to the Performance and Finance Committee, Quality and Safety Committee and trust board meetings. Externally, we are held to account for our operational performance by NHS England/ Improvement.

The consequent impact on the patients over 62 days than in previous 18 week RTT standard has been years. Our cancer performance was dramatic, although we have continued below the national average as it was to deliver performance higher than the more impacted by COVID-19 than national average. other providers that had more flexible facilities to maintain elective activity Delivery of the national cancer during COVID-19 waves. standards was also impacted by COVID-19, however we prioritised We continue to be committed to the maintenance of cancer services the delivery of all national cancer by transferring activity to the standards and plans are now in independent sector. After both waves place to reduce the backlog from the of COVID-19, cancer recovery first wave. The new 28 day faster plans were implemented across all diagnosis standard is coming into specialties and these led to sustained effect during 2021 and we have improvements in clearing the backlog implemented a number of pathway of long waiting patients in the autumn, changes in response to COVID-19 which is reflected in the low 62 day that set up the achievement of the 28 performance seen as we treated more day standard in 2021-22.

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Operational performance

Diagnostic performance

Urgent care and ED performance

Diagnostic performance was also impacted by COVID-19 demand, as routine appointments were paused twice during 2020-21. Cancer and urgent diagnostics continued and despite considerable staff absence levels, the diagnostics department delivered additional support to the emergency departments for COVID-19 patients.

The urgent care attendances during the year have been untypical of an average year, with the waves of COVID-19 reducing non COVID-19 attendances, however attendances in March 2021 have shown an increase to pre-COVID-19 winter levels.

In between each wave of COVID-19, the diagnostic services recommenced routine work and increased capacity as far as possible with the use of CT vans on site, offsite additional working and patients travelling to independent providers for their diagnostic. The graph below shows clearly the drop in performance during COVID-19 and the rapid improvements in between. The graph below shows clearly the drop in performance during COVID-19 and the rapid improvements in between.

The emergency department rapidly created a respiratory emergency department to take COVID-19 attendances and ensure segregated non COVID-19 urgent care services. During the majority of 2020, we maintained performance against the four hour standard ahead of the national average, however in the winter and early 2021 the increased COVID-19 admissions created huge pressure on bed capacity and the urgent care departments were unable to place patients on wards quickly to

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Operational performance

We have continued to work with our system partners to further develop streamlined services that can be delivered in the most effective location and to prevent attendances and admissions to hospital. The Local Delivery Board has continued to forge close working relationships across organisations and enabled improved

service provision, such as increased intermediate care capacity and patient at home support for patients with existing care packages. Patient experience has been enhanced by the opening of the Adult Assessment Unit and Same Day Emergency Care in addition to improvements in the Frailty Unit. We have continued to focus on reducing long length of stays for patients through collaborative work with the community across the integrated care system (ICS). The length of stay of COVID-19 patients directly impacted the overall non elective length of stay, particularly as each wave of COVID-19 showed different average lengths of stay.

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maintain the 4 hour standard. This also then impacted the ambulance handover performance and patients waited longer for handover to the emergency departments. The rapid assessment treatment (RAT) pathways continued to be in place over the year, but staff absence due to COVID-19 impacted the number of RAT teams available for this pathway.

Responding in an emergency Throughout 2020-21, the resilience team focused predominantly on supporting colleagues across the organisation with the response to the COVID-19 pandemic.

The response to COVID-19 has not been without its challenges, however, our people have gone above and beyond to demonstrate their ability to respond to challenges in a safe, coordinated and effective manner to ensure that our patients receive the best possible care. From the end of January 2020 a

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Operational performance

Along with our internal work, we recognise the importance of multi-agency working, and continue to actively engage in the work of the local health resilience partnership, the Essex Resilience Forum and local organisations within our care system to provide a coordinated approach to emergency preparedness, resilience and response.

As required nationally, we undertook an assessment against the NHS England emergency preparedness, resilience and response core standards for which we were able to provide full assurance to NHS England. The coming year will see us working alongside our partners and a range of other organisations, as we face the continued challenges posed by the COVID-19 pandemic, and our work to recover, identify learning, and restore our services, in a way that reflects a dramatically different way of working. Further detail on how we are managing the COVID-19 pandemic is included in the infection prevention and control section overleaf.

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full ‘command and control’ structure was implemented to ensure a robust response to what has been at times a rapidly changing situation. This structure comprised a Strategic Command Cell, with tactical cells managing operational response, clinical response, infection prevention and control, supporting our people, communications response and the management of our estate and infrastructure.

Clinical performance Infection prevention and control COVID-19 Our infection and prevention control (IPC) programme was in place well before our first COVID-19 admission on 15 March 2020. The IPC programme was supported and escalated using our ‘command and control’ structure, as the pandemic evolved. Numbers of COVID-19 positive inpatients are listed in the table below from the dates stated until 31 March 2021: Inpatient spells since:

01 02 20: First wave

01 09 20: Second wave

Total inpatient spells (with 2069 a positive swab):

1542

Inpatients (positive) - on 31/03/21:

Inpatients (previously positive) - on 31/03/21:

Discharged home (with a positive swab in spell):

1249

1018

Discharged other (with positive swab in spell):

Inpatient deaths (with positive swab in spell):

529

330

Transferred (with positive 210 swab in spell):

135

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Table 1 – Data up to 31/03/21

The graph on the previous page shows the number of new positive inpatients by day, and also the total cumulative number of positive patients admitted.

01/04/20 – 31/03/21

Patients testing 31 positive for the first time 3-7 days after admission (indeterminate cases) Patients 19 positive for the first time 8-14 days after admission (probable nosocomial infection) Patients 12 positive for the first time >15 days after admission (definite nosocomial infection)

y Cases are ‘indeterminate’ as it is y There was acceleration of coordination, possible these are community acquired planning, monitoring, training including and not hospital associated cases. IPC training, staff resource and finance. y It is likely patients had the more y Risk communication, operational transmissible Kent variant in Q3 and 4, support, logistics, and supply chains as nosocomial infection rose steeply were optimised. despite outbreak control measures. y CCG and Public Health (Essex Health Protection Unit) engagement with the A variety of strategies were put in IPC team and executive team occurred place to manage patients admitted with on a regular basis. SARS CoV2 and control COVID-19 y Data management (COVID-19 data, infections at PAHT. This was supported mortality, and operational data), IT by the trust board. support and remote working was y The executive team had access to facilitated throughout the year. national and regional support and feedback, provided visible leadership and chaired all trust meetings.

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The table below shows numbers of nosocomial COVID-19 at PAHT, using national definitions:

y Constant review of national guidance y All staff in PPE appropriate to their took place with adherence in all assessed risk (FRSM IIR or FFP3, aspects of IPC including uniform policy, gloves, scrubs, aprons/ gowns, linen and waste disposal. goggles/ visors), including in nony 27 COVID-19 associated outbreaks clinical areas. were noted at PAHT from 1 April 2020 y Staff support up to seven days a week, to 31 March 2021; 22 associated with by the staff health and wellbeing team clinical areas and five with non-clinical and the people team. areas. Regular reporting to East of y Robust IPC risk assessment processes England regional leads took place. and control practices including for non y In order to reduce staff sickness and COVID-19 infections and pathogens. staff outbreaks, close contact between staff was minimised at work stations, The following measures were also ward rounds and handover sessions, implemented and escalated at the trust: moving to ‘virtual’ multi-disciplinary meetings, and staggering staff breaks. y Epidemiological investigation and y Mortality reviews of all probable and contact tracing within the hospital and definite nosocomial COVID-19 cases via public health links in the community. took place. This helped us learn y Adherence to all mandatory reporting lessons and implement improvements systems, risk registers, board in practice such as minimal ward assurance framework. transfers. y Individual risk assessments for all staff, redeployment and COVID-19 secure Changes made in March 2020 to the settings. way the organisation and the IPC team y Ventilation reviews, system functioned continued throughout 2020modifications, and introducing air 21. The IPC cell, clinical cell, people cleaning and disinfection devices to cell, and strategic cell shared decisions reduce airborne transmission. with the incident management team y Isolation of immunocompromised for onward action. Ten PPE safety patients using a side room priority marshals were appointed to work isolation list stratified by pathogen and alongside the IPC team to support and infection risk. monitor the PPE programme. y PPE supply and compliance monitoring, for low risk (green), medium Other IPC measures continued risk (amber) and high risk (red) patient including: pathways. y Respiratory segregation and respiratory y A significant expansion in microbiology etiquette. laboratory capacity and diagnostics: Iny PCR testing of in-patients every 48 house PCR testing capacity increased hours for COVID-19, to detect cases to 252 tests per day on weekdays, with early. 126 tests per day during weekends. y Ward cleaning up to four times daily, y The introduction of point of care using a neutral detergent and a (POC) tests, mainly Samba II nucleic chlorine-based disinfectant. acid amplification units with ED y Single use items were used where testing capacity of 72 samples a day, possible, including allocations for side increasing to 96 samples per day. rooms. y Social distancing when possible, inpatients wearing masks (FRSM IIR) when possible, any visitors to wear masks.

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Clinical performance

Clinical performance y Daily meeting of the Infection Prevention and Control (IPC) cell including weekends when required, with roll out and monitoring of all IPC methods. y Protection of the health workforce including monitoring of staff sickness, database of COVID-19 related staff illness, lateral flow testing and participation in the national PHE run SIREN study. y Case management, and improvements in therapeutics managed by the PAHT clinical cell. y Introduction of the COVID-19 care bundle at the trust, which included protocols on use of antibiotics only for concurrent bacterial infections.

y A well-publicised vaccine programme made available to all staff from December 2020 with booster doses in March - April 2021. y In line with national guidance, monitoring for variants of concern by isolating any patients with a travel history, and providing positive isolates for genome sequencing. Only the UK Kent variant B.1.1.7 has been detected at PAHT to date. y Monitoring patients for COVID-19 reinfections, and more recently also being vigilant for COVID-19 infections post vaccination.

Clostridium difficile (C.difficile) - There were a total of 43 hospital-onset and 11 community-onset healthcare associated (i.e. these patients were inpatients in the previous four weeks) C.difficile cases at the Trust during the year 2020-2021 (first two categories in table one below). This compares with 17 hospital-onset and five community-onset healthcare associated cases last year. The rise in cases is likely to be associated with the COVID-19 pandemic and the increase in broad spectrum antibiotic prescribing. Of the C.difficile cases in January to March 2021, at least half were known to have had COVID-19. Community cases have also risen, and C.difficile in the whole population of West Essex CCG are higher; 73% compared to around 60% in the other two CCGs in the Integrated Care System (ICS). Table 1 - Clostridium difficile - cases by month

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Alert organisms

MRSA bacteraemia There have been no trust-attributable MRSA bacteraemia cases this year, which means the organisation remains in an excellent position nationally. Community cases have increased (four in 2020-2021) and are being investigated by the CCG. Total number of cases during the year 2020-21

MSSA bacteraemia There is no trajectory in place for MSSA bacteraemia. There were seven trustapportioned cases during the year which is a low number of cases. Case numbers are the same this year as for the previous year. Gram Negative Blood Stream Infections (GNBSIs) There is a whole healthcare economy ambition for reducing healthcare associated GNBSIs by 50% by 20232024. Cases during 2020-21 were comparable with the number seen in 2019-20.

Gram negative blood stream infections

Pre 48 hour cases

Post 48 hour cases

E.coli bacteraemia

156

Klebsiella spp. bacteraemia

Pseudomonas Aeruginosa bacteraemia

Infection incidents and outbreaks Norovirus There were no outbreaks of norovirus.

Audits and surveillance PPE compliance and hand hygiene audits continued throughout the year with actions plans implemented by health care groups and monitored by the IPC cell/IPC Committee.

Influenza and other respiratory viruses From 28 September 2020 influenza A and B, and RSV testing was undertaken routinely. Conclusion Together with our colleagues across Just six of 20,000 patients tested were the UK, we are reviewing lessons positive for Influenza A, nine were learned from the COVID-19 virus positive for Influenza B and ten were and our response, identifying gaps positive for RSV throughout the six in our knowledge and anticipating month period. potential challenges that may lie ahead. With global travel stopping and These are extraordinarily low numbers, starting depending on the evolving showing the predominant role of SARS epidemiological situation around the CoV 2, and the success of the influenza world, the COVID-19 vaccination vaccination. programme and emergence of SARSCoV-2 variants of concern, the virus is currently still being monitored very closely.

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Control of C.difficile will be a top priority for our clinical teams, the IPC Committee, and the Antimicrobial Stewardship Group in the months to come.

Learning from incidents

10,226 incidents were reported during 2020-21, 0.8% increase from 2019-20. 6902 were patient safety incidents (67%) reported this year, a decrease from 72% last year. Other incident reporting types were: y 738 staffing shortage (7.4%) y 652 staff related (6.4%) y 564 equipment related (5.6%) y 485 security (4.8%) y 463 environmental (4.6%)

y 369 monitoring (3.7%) not incidents by recorded on Datix for monitoring purposes y 53 visitor related (0.5%)

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At PAHT, patient safety is a priority and IMG reviews all incidents graded as we continuously work to ensure that moderate and above and makes a incidents are managed effectively and decision on the appropriate harm most importantly that we learn and share grading and the level of investigation. the improvements from them. All moderate, severe and death graded harms were reviewed through this A patient safety incident or adverse process. incident is defined as ‘any unintended or unexpected incident which could IMG is chaired by the director of clinical have, or did lead to harm for one or quality governance, deputised by the more patients receiving NHS funded associate director of quality governance. care’. This includes all terms such as There is executive oversight of the adverse incidents, adverse events and incident management process through near misses, where an incident was quality briefings and reports submitted recognised and averted. to the Patient Safety Group and Quality and Safety Committee. This year saw changes in the incident management process in response to the For the year 1 April 2020 to 31 March impact of the pandemic. Twice weekly 2021, a total of 10,226 incidents were Incident Management Group meetings reported on the trust’s Datix incident (IMG) took over from the historical daily management system; this is a 0.8% oversight and serious incident group increase from 2019/20. meetings.

In comparison with last year there has been a rise in: y Security incidents from 2% to 4.8% y Staffing shortage from 5.8% to 7.4%

Never events The trust reported one Never Event in 2020-21.

Friends and Family Test (FFT) Both of these incident types saw an The use of the Friends and Family increase related to the social and test was suspended at PAHT as the organisational pressure of the pandemic. approach to gathering data presented Other incident types have either seen a risk of infection for patients and congruent or decreased reporting staff. National returns of this data were numbers. also suspended for much of 202021 due to the pandemic. As a result, Top ten patient safety incidents although some evidence was gathered The top ten categories of patient electronically, this section of the report safety incidents reported in year are focuses on the wider patient experience summarised in the table below. These metrics. are reported to the National Reporting and Learning System (NRLS) now part The year in patient experience of NHS England to enable learning We closed 2020-21 with 204 complaints and comparison with similar sized received, the first increase in complaints organisations to occur. year on year since 2011 (176 in 201920) and 3112 PALS cases received (vs. 3462 2019-20).

Serious incidents 94 serious incidents (SIs) were reported by the trust in 2020-21. In comparing the last two years with 2020-21, there has been a reduction in incidents for falls, treatment delays, surgical procedure, and diagnostic incidents meeting the criteria for SI. There was an increase in maternity incidents from 4 to 9, and an increase in health care associated infections related to the COVID-19 pandemic.

A richer picture of communication issues As we develop plans to renew our patient safety, experience and quality strategy, we have been taking a closer look at the issues underlying our communication challenges. As a result of this analysis we now have a richer, more complex picture of the people who are most concerned about communication. We see that caregivers and relatives play the most significant role in raising concerns about the quality of care and communication, confusion about the correct information from professionals to both patients and relatives appears to be a systemic issue and in addition to this telephone contact with relatives is a significant issue.

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The top trending theme is medical care expectations and communication issues which continue to be the most significant issue.

y The team developed new inpatient visiting guidance which has restarted based on the national guidance, supports open visiting for high risk groups as well as visiting at the ward manager's discretion for those for whom this would ‘enhance the care experience’ so that family carers are fully supported. y Repatriated patient property for over 200 families who may otherwise not have received their family member’s belongings, refreshing our policy in the process, introducing securely tagged, colour coded bags for elements of property, a night safe and centralised control. y New communication channels for carers with a group operating the first and third Monday of the month, being publicised through local voluntary sector groups and trust communications. y Work on health inequalities as a result of funding from the East of England Cancer Alliance who funded a cancer information film from a patient perspective translated into five community languages on video and information card. The languages are Polish, Romanian, Italian, Urdu and Punjabi. Mortality Some of the statistical markers for mortality have been higher than expected for 2020-21. This year a change in requirements for the configuration of the data submitted to HES has led to incomplete data submission affecting the HSMR and SHMI from September 2020-November 2020.

Resolution is expected by May 2021 and a data bundle will be submitted which will enable correction of the SHMI and HSMR for that period. Hospital Standardised Mortality Ratio (HSMR) and Standardised Mortality Ratios (SMR) The Hospital Standardised Mortality Ratio is the ratio of observed deaths to expected deaths for a basket of 56 diagnosis groups, which represent approximately 80% of in hospital deaths. The trust’s rolling HSMR and SMR reported for the last 12 months have been higher than expected. For the period December 2019 to November 2020 (including a time lag of one month) the trust’s HSMR was 116 (higher than expected) but improved from 2018-2019 (122). It is anticipated that the HSMR will continue to improve. PAHT is one of six trusts within the peer group of 15 that sit within the ‘higher expected’ range. Summary Hospital-Level Mortality Indicator (SHMI) The Summary Hospital-level Mortality Indicator (SHMI) reports on mortality at trust level across the NHS in England using a standard and transparent methodology. It is produced and published monthly as a national statistic by NHS Digital. The SHMI is the ratio between the actual number of patients who die following hospitalisation at the trust and the number that would be expected to die on the basis of average England figures, given the characteristics of the patients treated at the trust. SHMI for the period December 2019 to November 2020 is 101.85 (as expected). Progress over the past year Mortality governance is a key priority for the trust board. The medical director has executive responsibility for the learning from deaths agenda and a non-executive director has responsibility for oversight of progress.

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Some examples of our operational response to these issues: Existing support projects continue with 1542 family video calls completed through our seven day service in the last year, over 1533 carers messages distributed and 128 ITU patients' carers and relatives provided with ITU information.

The national system of structured judgement reviews has also been rolled out across the trust. Themes identified from these reviews inform the quality improvement projects to be undertaken and learning from mortality reviews is shared across the organisation. A lead nurse for mortality and quality was also appointed to facilitate the mortality review process. The COVID-19 pandemic has increased the actual and the expected number of deaths both nationally and at PAHT. The first COVID-19 death at PAHT was reported on 18 March 2020. All deaths related to COVID-19 are included in the structured judgement review process with the learning shared rapidly through the IPC reporting infrastructure. Going forward a new software system (SMART) is being implemented to enable a ‘live’ and ‘visible to all staff’ view of the trust status in terms of learning from deaths. Go live is anticipated to be May 2021 and the benefits expected include more timely insights in to the effectiveness of the care we give.

The healthcare groups will be appointing medical patient safety and quality leads who will work with all the clinical specialties to ensure learning from deaths across the organisation and support a continuing improvement in mortality indices. Quality improvement The trust is registered with the Care Quality Commission (CQC) and our current status is ‘registered without condition’. Our staff used the CQC inspection outcomes as the foundation upon which to critically examine our services and focus on how we plan and deliver the fundamental aspects of safe care and have taken decisive action to change everyday activities which have led to significant improvements. The last full trust inspection conducted by the CQC was completed in March and April 2019 with the report published in July 2019, this showed improvements, with five of the trust’s core services rated as Good. The trust received an outstanding rating for caring for children and young people. The overall quality rating for the trust remained the same at Requires Improvement. However, the trust received an overall rating of Good for both the well-led assessment and also for the use of resources assessment. The current CQC ratings received in July 2019:

Overall rating

Requires improvement

Are services safe?

Requires improvement

Are services effective?

Requires improvement

Are services caring?

Good

Are services responsive?

Requires improvement

Are serves well-led?

Good

Are resources used productively?

Good

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A trust wide improvement programme and Mortality Improvement Board was established in 2019-20 utilising quality improvement methodology to deliver improvements in patient outcomes and mortality rates. Over the past year the national medical examiner's system has been fully implemented and 100% of all inpatient deaths are reviewed and scrutinised.

Within this inspection report, the CQC identified areas where the trust needed to improve performance and these were: y Mandatory training not completed (doctors) and insufficient nursing staff y Poor and incomplete record keeping y Limited audit activity (national and local) y Four hour standard for urgent and emergency care not achieved y Slow response to issues of risk and poor performance The report detailed 42 recommendations for the trust: y 22 must do actions y 20 should do actions The recommendations were collated into 14 individual projects based on themes, using our quality improvement methodology to enable a consistent and sustained approach to the achievement of these objectives. Each project has a designated executive, a senior responsible officer (SRO) and may have a small project team appointed.

The trust is using the quality improvement plan as a dynamic document; with additional topics added over time, as we identify areas that require further improvement. The quality improvement plan is monitored monthly through the Clinical Quality Improvement Group and reports into the Trust Compliance Group and the Quality and Safety Committee. 2020 The CQC undertook an unannounced winter assurance visit to the urgent and emergency care department on 3 February 2020. Their report was published in April 2020 and rated the service Requires Improvement with two areas receiving a regulation notice: y The trust must ensure sufficient provision of an out of hours endoscopy service to minimise risk of treatment delay to patients who require access to the service y The trust must ensure detailed up to date records are kept in relation to provision of care and treatment and it is reflective of each patient’s full clinical pathway and include actions taken in response to individual risks The trust implemented a quality improvement plan to address recommendations raised and strengthen the leadership team within the service areas. 2021 The CQC conducted an unannounced inspection of the emergency and urgent care department on 14 February 2021. Their report was published on 27 April 2021, giving the department a rating of inadequate and the trust received a section 29A warning notice. The concerns identified by the CQC from their inspection was: y Risk assessments were not being completed for all patients within the emergency department

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During the 2019 inspection, the CQC identified areas where the trust was performing well and had made improvements from the previous inspection in 2017, these were: y Safety incidents reported well y Pain management regularly monitored y Patients treated with compassion, kindness, privacy and dignity y Services were inclusive and complaints treated seriously y Positive culture where staff felt respected, supported and valued y Clear vision for the trust and embedding of large amounts of change over the last three years y 72% of all ratings are now ‘good’ or ‘outstanding’ y Caring rated as ‘good’ for the third consecutive inspection

Immediate actions were implemented following receipt of the warning notice, with further actions underway. We have undertaken a review of these findings across PAHT, for all core services to ensure the learning is shared widely and improve services across the whole organisation. We are confident that the actions undertaken and planned in the coming weeks will ensure we continue to improve the safety of patients in our emergency department. The CQC will complete a further unannounced inspection of the emergency department after 1 June 2021 to monitor our progress against the action plan and we look forward to the opportunity to show them the improvements we have made. Quality first team The quality first team defines their purpose as:

exponentially increased pace, due to the necessity to keep patients safe. This is evidenced by the ability of our teams to introduce non face to face outpatient services within two weeks. Our learning from such changes has supported the ability to sustain and enhance this change for the benefits of our patients, people, performance, places and pounds. The Quality First team responded at pace to the necessary changes to activity the pandemic has necessitated. This included redeployment of members of the team to high risk areas such as critical care, introduction and delivery of the lateral flow tests for our people and key patient groups and leading the COVID-19 vaccination service to circa 7000 local health and social care staff. The improvement partnership The improvement partnership is our programme for enrolling, engaging, involving and developing our people in quality improvement. The quality first team runs leading change and leading projects learning and development sessions with the objective of enabling them to deliver successful quality improvement projects. When the staff member completes a quality improvement project (capturing project outcomes in poster), they become PAHT improvement partners.

The improvement partnership is an ‘Inspiring our people to put quality enabler and addresses the leadership, first for the benefit of our patients, culture and organisational development staff and wider community by building required to embed quality improvement confidence and capability in quality at PAHT. improvement’ We continue to develop our people with The past year has been a very different quality improvement skills, knowledge year for everyone, especially those and capability with a focus on leading working and receiving care in the NHS. change and leading projects. 385 staff members have completed leading Ours and the NHS’s response to the change, with 198 completing leading COVID-19 pandemic has seen some projects. We now have 52 improvement quality improvement initiatives and partners at PAHT. transformation projects not progress at the pace that had been hoped for or Improving patient outcomes anticipated. However, in other areas Our work to improve outcomes (mortality our response to the pandemic has seen some changes occurring at an

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y Not assured that patients presenting with acute mental health illness were receiving timely assessments y There was a lack of adherence to infection, prevention and control procedures y The process for the provision of the out of hours endoscopy service for patients presenting with acute upper gastrointestinal bleeding was not embedded.

We have significantly improved our learning from death processes and standardised the mortality and morbidity meetings that happen in our speciality teams, giving us greater ability to address lessons learnt as well as celebrate our successes. Our focus will continue to be on the areas where we know we have an opportunity to improve, namely the following diagnosis areas, sepsis, acute kidney injury (AKI), acute respiratory (COPD, pneumonia and aspiration pneumonia), fracture of neck of femur and our end of life pathways, which we will continue to do in partnership with our wider health and care system colleagues. Every specialty has a clear clinical strategy in place and a big part of delivering these will address unwarranted variation in care and ultimately improve patient outcomes. A significant milestone achievement for PAHT was being able to provide noninvasive positive pressure ventilation in our respiratory ward, in addition to critical care. We know beginning non-invasive positive pressure ventilation quickly can improve patient outcomes, reduce length of stay in hospital and reduce the need for admission to critical care. Thank you to the respiratory, Locke Ward, critical care, emergency department and clinical site teams for their support with developing the pathway. Theatre utilisation The development of a QlikView dashboard to show performance in theatres to help identify opportunity for improvement was completed and went live on 15 September 2020. This development will support focus for the surgical teams to improve theatre

utilisation to achieve 85% utilisation by March 2022. The focus is now on improving utilisation within three clinical specialties, ophthalmology, ENT and maxillofacial. If we reach 85% within these specialties it will increase our utilisation by 10%. Outpatients Patient initiated follow up (PIFU) allows patients to determine whether their condition requires clinical intervention and allows access to the specialist when it is needed. In turn, this reduces the number of follow up appointments needed. The first pilot for fracture went live on 22 February 2021 and as at 25 March 2021, 38 patients have been discharged onto this pathway. Prior to PIFU, these patients would have been booked for a follow up appointment. Plans are in place for a pilot in neurology to go live on 12 April 2021. We will be working with specialties to determine the roll out plan for PIFU across PAHT. Doctor Dr was introduced and enabled paperless communication for patients. A text message generates a link for correspondence to be viewed. This is in place for all appointments in outpatients with outcome letters due to go live in April 2021. There has been a 71% uptake in patients choosing to view their letters electronically, which has both cost savings, due to reduction in postage, and environmental saving, as less paper is used. We moved away from a one-way messaging flow provider to a new provider enabling two way messaging with our patients. We have gone live with paediatric and paediatric diabetes as a two way messaging flow for appointments. Other main outpatient services will be live by October 2021 and pilots are due to commence for gynaecology elective activity in April 2021 before roll out to all elective activity. Telemedicine was rolled out rapidly, using the Attend Anywhere platform, as part of the national response to COVID-19 in April 2020 with 70% of specialties trained

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rates) for our patients has continued throughout the COVID-19 pandemic. Original plans were amended as many of the clinical and operational leads had to prioritise supporting our response to the pandemic; however here are some notable achievements from the previous year.

to use the system. Template letters and processes have been established to support the delivery of telemedicine. We are now engaging with operational teams to identify opportunities to increase non-face to face capacity in line with new hospital ambitions. National Careers Week More than 150 students took part in virtual work experience as part of National Careers Week, where they looked at three of the NHS’s wicked problems (recruitment and retention, patient flow and patient experience). They then presented their ideas on how these problems could be solved to the board of directors during National Careers Week. Strategic realisation and system partnership

We also work with system partners in the development and delivery of the ICP/S and transformation plans and support expert oversight groups (EOGs) in the delivery of quality improvement.

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The Quality First team works in partnership with PAHT’s strategy team to support the facilitation of clinical strategy workshops and the quality improvement methodology is embedded into each of the specialty level strategies, ensuring that our plans have clear aims, measurable deliverables and achievable actions (tests of change).

In 2020-21 our people faced many challenges in response to the COVID-19 pandemic. Staff were required to work in significantly different ways through skill development and redeployment in the management of unprecedented levels of acute patients as well as COVID-19 related staff absences. We have continued to recruit throughout the year to both substantive posts and temporary recruitment to support this increase and pressure in the services.

out practical actions for employers and systems in light of the challenges faced by organisations in their response to COVID-19, as outlined below: • Looking after our people – with quality health and wellbeing support for everyone • Belonging in the NHS – with a particular focus on tackling the discrimination that some staff face • New ways of working and delivering care – making effective use of the full range of our people’s skills and experience • Growing for the future – how we recruit and keep our people, and welcome back colleagues who want to return

The key workforce indicators are reflected We focused on how we continue to look after each other and foster a culture of in the table below: inclusion and belonging, as well as taking action to grow and develop our workforce, People KPI 2019-20 Year to date and work together differently to deliver target patient care. Vacancy 8.6% 8% rate Sickness 4.3% 3.6% absence One of the key priorities during 2020Voluntary 10.7% 9.7% 21 was to implement and embed a turnover sustainable health and wellbeing offer Statutory 92% 87% to our staff in response to the impact of and COVID-19 and the challenges that have mandatory been faced. training Appraisal 89% 71% We had 160 staff who were required to Flu 80.1% 81% shield under government rules. Laptops Time to hire 31 days Average 41 were distributed to enable staff to work from home where possible. This included days some redeployment into roles that could continue to provide support remotely from The below key themes highlight the home. outputs that form our people framework and clarifies the five key pillars of the A seven days per week first line absence people strategy: reporting service was set up during the peak of the pandemic to take calls y Culture, health and wellbeing from staff reporting their absence y Workforce resourcing and planning either through their own sickness or a y Learning, leadership and team requirement to self-isolate. This captured development live absence data throughout the day and y New service and workforce models enabled clinical staff to review staffing y Optimising technology levels on an ongoing basis. It is acknowledged that the last year Individual risk assessments were carried has been a challenge for our workforce, out on staff working on all hospital in addition to PAHT’s people strategy, sites which assessed any underlying the NHS 2020-21 People Plan also set

Health and wellbeing

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People performance

Project Wingman was a national initiative resourced voluntarily by pilots and cabin crew who were grounded at the time of the pandemic. The purpose of the initiative was to provide a first class style socially distanced breakout area where drinks and refreshments were served to staff. An additional key element of this initiative was that all of the cabin crew were mental health first aiders. This was well received by staff. The winter flu campaign saw 81% of staff vaccinated, a slight increase on 19/20 figures. Webinars took place within PAHT to provide our people with updated information and advice, a number of these were facilitated specifically for our BAME staff to address emerging themes and concerns. We have developed a range of health and wellbeing support initiatives for our people, whether at the front line or in supporting services. A number of these services have been developed on a national and Integrated Care System (ICS) level and additional support implemented locally in partnership with SHaW (staff health and wellbeing) our occupational health service, our employee assistance programme, the Red Cross and Essex Partnership University NHS Foundation Trust (EPUT). Work was undertaken to support both shielding staff and their managers in returning to work and psychological and physical support was made available. We delivered an ongoing series of webinars for both staff and managers throughout

the COVID-19 period. Lateral flow testing was implemented across the trust in October 2020, initially to frontline staff and in December this was rolled out to all staff. January 2021 saw the first doses of the COVID-19 vaccination delivered to staff, students and volunteers working within PAHT. This programme was led by our occupational health department, with the support of the quality first team. The second vaccination dose programme commenced in March and completed in April. 85% of staff received their first vaccination through PAHT, those staff who were unable to receive their vaccinations were supported to book their vaccination through the community provider in Harlow. We introduced a peer support initiative called 'time to talk'. This initiative is supported by substantive staff from within PAHT who are trained as either mental health first aiders or are trauma and risk management practitioners. The concept is to provide immediate intervention with face to face drop in support to staff across PAHT at designated times and places such as at the end of each shift. This support has been well received by our people and will continue as part of our recovery plan going forward. We launched a 12 week Back to better people focused campaign with the aim of supporting our people to develop and drive refreshed approaches to delivering services, following the significant challenges that have been faced over the last 12 months and will continue to face going forward. There are four themes underpinning this campaign: y Health and wellbeing y Compassionate and inclusive leadership y Civility y Operational leadership The trust's intranet, Alex, has a page dedicated to the health and wellbeing offer available to our people. This

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conditions that may affect the level of risk of becoming seriously unwell if they tested positive for COVID-19. Advice and coaching was provided to staff and managers on undertaking the risk assessment and managing outputs. Where required, action plans were then agreed between the staff member, their manager and our staff health and wellbeing service (SHaW).

In line with the NHS People Plan, the trust has appointed a non-executive director as a health and wellbeing guardian. This role will work closely with the people division and wellbeing leads across the organisation to encourage a model of wellbeing leadership.

Workforce, resourcing and planning

We implemented agile working across the organisation, including working from home. The wide use of laptops and digital telephone systems enabled us to implement social distancing guidance and decrease footfall across our working sites. The impact of agile working/working from home has enabled greater productivity efficiencies though reevaluation of current processes and systems and has enabled specific objectives and targets to be set and measured more efficiently. y We continued to welcome international nursing staff to PAHT, facilitating the required isolation period with designated hospital accommodation. The nursing staff group now has a vacancy rate of 7.8%. The overall PAHT vacancy rate is less than 10% y There have been a number of national initiatives to support staff groups in being deployed across the NHS in response to the pandemic. These included medical student aspirant nurses and staff deployed from other organisations, both private and public sector y We have continued to support NHS management graduates placed within the organisation y Following a pause during the pandemic, pre-registration students restarted placements with PAHT in March 2020 y Whilst apprenticeships were paused

in a number of areas during wave 1 and wave 2 of the COVID-19 pandemic, we have continued to support this scheme where possible and currently have 65 apprentices working across PAHT y Our management and leadership development programmes were paused for most of 2020-21, the ward managers' leadership programme commenced in March 2020 y Non-statutory training was paused during the pandemic to maximise availability of staff. All training was reinstated in March 2021, a majority of which is either online or via MS Teams y Appraisals were also paused during the pandemic, these were reinstated in March 2021

Research, development and innovation

y There were 13 commercial portfolio studies throughout 2020-21. Five were open with one having a significant delay/suspension due to the COVID-19 pandemic (Diamond Study). Eight of the studies were in follow up. We had 70 non-commercial portfolio studies in 2020-21. Out of the 50 open studies, 15 were significantly suspended or delayed due to the COVID-19 pandemic. There was one COVID-19 non UPH study and nine COVID-19 UPH studies. 17 were closed to recruitment and had moved to in follow up only and three were closed following the conclusion of follow up.

The performance report

includes signposting staff to the services which offer both psychological and physical wellbeing and support, as well as online resources, toolkits and self assessments.

Recruitment per speciality Speciality

Directorate

Commercial/noncommercial

777

Cancer

CCCS

Non-commercial

Gastroenterology

Medical

Non-commercial

Emergency dept

Urgent and AMBU

Non-commercial

Critical care

Surgery

Non-commercial

369

People

Corporate

Non-commercial

Respiratory

Medical

Non-commercial

Maternity

Non-commercial

Opthalmology

Family and women's Medical

Musculoskeletal

Medical

Non-commercial

Diabetes

Medical

Non-commercial

Cancer

CCCS

Commercial

Portfolio activity

Improving our estate

y Development schemes (£5.7m)

The trust has invested substantially in remodelling and maintaining the estate with the following initiatives and priorities progressing at pace over 2020-21. y Improving the management of buildings and engineering systems y Providing excellent facilities y Ensuring safety and security

2020-21 saw the trust implementing agile working, reducing office accommodation onsite to enable maximising the availability for clinical space, in line with the emerging demand from increased patient activity.

The approved capital programme was significant, including £7.7m backlog maintenance and £17m investment in improving the estate. The programme was made up of three elements, these include: y Emergency backlog and critical infrastructure maintenance schemes (£7.7m) y Capacity schemes (£11.3m)

Completed schemes include: y Fracture Clinic y Kao Park (administrative hub) y Adult Assessment Unit (AAU) y Multi-faith facility y Alex study (consultants' office) y Dolphin Ward upgrade y Drammen House upgrade y Kalmar House upgrade The locations of the projects are shown on the site plan overleaf. Included are schemes initiated in 2020-21 but due for completion in early 2021-22.

The performance report

Non-commercial

In addition, we completed a total of 54 schemes (90 individual projects) ranging from £10k to £500k to manage maintenance backlog and the trust’s critical infrastructural risks. These included: y Asbestos - encapsulation/removal works. y Fire damper remedial works - trust wide. y Replacement of kerosene tanks located in boiler house compound. y Water management remedial works from audit. y Labour ward corridor and room upgrade. y Upgrade of bereavement suite. y Bird proofing to roof mounted AHU/ chiller plant. y Site underground services survey update and required remedial works. y New external door sets to meet LSMS audit report. y Upgrade of main block and Eye Unit lift . y Obsolete switchgear replacement north and south side. y Medical gas plant remedial works

identified in BOC audit. y CSSD - ventilation replacement. y New UPS/IPS to ED, theatres and ITU department on critical equipment. y Basement fabric, electrical, mechanical repairs required for compliance and business continuity. y Refurbishment of main sewerage stack. y Site-wide roadway and footpath repairs. The locations of the projects are shown on the site plan above.

Sustainability

The Clinical Senate Council (South West) acknowledged that climate change should be treated as a healthcare emergency and that there is much that can be done both in the short and medium term to make the NHS more sustainable, at provider, organisational, procurement, estates and individual levels. In light of this the trust has continued to pursue its commitment to ensure delivery of high quality health care service with minimal negative impact on the environment.

The performance report

Improving our estate

We reported significant progress on our Sustainable Development Management Plan (SDMP) for 2019-20 financial year; where we achieved 28% energy related carbon footprint reduction in compliance with the set regulatory target by the Environmental Agency on our Carbon Reduction Commitment (CRC) on 2013 baseline figures. This success was replicated in our waste management practices where we laid emphasis on processes and methodology to support waste hierarchy and circular economy and in water management with reduction in water usage. Despite the impact of COVID-19 pandemic in 2020-21 financial year, the trust continued to embark on environment and sustainability driven projects to realise set actions on its SDMP and to comply with requirements

set by the Sustainable Development Unit (SDU), NHSI and the government. The projects focused on include: y Completion of the LED lighting project to actualise the projected carbon and cost savings. y The green zone project: y Implementing the green travel plan – installation of Electric Vehicle (EV) charging infrastructure. y Cycle rack installation y Changing facilities for cyclists and runners y Waste recycling area y Green plan requirement – review of SDMP activities and timelines to align them to the new green plan guideline introduced by the SDU, NHS England and NHSI y Delivering net zero by 2045

To refresh our SDMP in line with new SDU guidance the trust is working with a net zero consultancy firm to establish our baseline emission data and to set measurable targets and a pathway to achieve net zero by 2045. The analytics method is based on the tools proposed by the Intergovernmental Panel on Climate Change (IPCC) for compilation of Greenhouse Gas (GHG) emissions. The data stream includes limited emissions under scope one and two (purchased electricity, gas and fuel used in transport) and limited emissions under scope three (fuel used in personal/hire cars for business purposes, purchasing, generated waste and water supply/sewerage). The interim report (using data available as at February 2021) shows total carbon emission of 17,321.77tCO2e and the following percentage breakdown by category: y Purchasing (scope three) – 64.21% y Natural gas (scope one) – 22.42% y Electricity (scope two) – 11.65% y Others (scope one and three) – 1.72%

The 2020-21 GHG emissions data indicates that a high percentage of our carbon footprint is from purchasing i.e. supply chain contributors, so a key action of the updated SDMP (Green Plan) will be to collaboratively work with our supply chain partners to fully integrate sustainable and ethical procurement practices into our procurement strategy/processes for all goods and services.

Sustainability activities update Light-Emitting Diode (LED) lighting project The estates and facilities team along with the installation contractor worked through the challenges of the COVID-19 pandemic to deliver the first and second phases of the LED project to programme in

The performance report

Carbon footprint statement

Green zone project The green zone construction phase works started in February 2021 (delayed due to COVID-19 pandemic). The scheme is split into two major elements – the installation of Electric Vehicle (EV) charging points and the cyclist and runners welfare scheme. In addition to the reduction of travel related carbon footprint, these projects also support staff welfare and travel modal shift as indicated in the staff response to travel survey conducted in 2019. Electric Vehicle (EV) charging point The EV charging point works have completed. This scheme will enhance modal shift to use of electric vehicles rather than fossil fuelled vehicles. The installation provides the following: y Capability to charge up to 22kW (“fast charging”) to ensure the system is future proofed ready for improvements in vehicle battery y Load-balancing between multiple vehicles to optimise available supply capacity y MID-approved (Measuring Instrument Directive) compliant meters fitted to each charge point connection ensures accurate consumption monitoring y Integrated Wi-Fi to enable remote monitoring and fault resolution Changing facilities for cyclist and runners The planned completion date for this work is May 2021. Deliverables from this element of the green zone scheme are: y Fully refurbished changing facilities

with external cladding y Installation of cycle storage facilities y Improved landscape around the changing facilities, providing outdoor garden space for staff y Improved lighting and footpath with benches Provision of waste recycling area and receptacles The provision of recycling area and receptacles will enable the trust to embark on recycling more domestic waste streams as well as supporting the local community with recycling of clothing and glass bottles. Net zero strategy project scope The trust is undertaking this project to align its carbon emission reduction commitments to the NHS and UK government goal of achieving net zero by 2050. The output will be a defined and measurable net zero strategy to be adopted by the trust and will include high-level cost-benefit analysis and action plan pathway to net zero carbon emission. This project involves: y Comprehensive assessment of the current major greenhouse gas (GHG) emission sources and emissions across the trust aligning to the NHS carbon footprint guidance including access to the net zero hub for ongoing carbon reporting y Baseline and technical audits including data capture, assessment of the energy performance of the hospital to inform the strategy and behavioural surveys to understand employee influence y Assessment of climate-related risks and opportunities available to the trust including PESTLE analysis of climate change relating to operation and value chain carbon and assessment of the trust’s strengths, weaknesses, opportunities and threats y Assessment of existing and known potential climate-related legislation and compliance schemes that the trust are to be aware of

The performance report

December 2020. The total number of installations across the site and the benefits are listed below: y Total number of LED luminaires / lamps installed – 4,144 units y Annual cost savings – £150,068.74 y Annual energy savings – 1,005,016.35 kWh y Annual carbon savings – 384.18 Tonnes of CO2

Low Carbon Skill Fund (LCSF) and public sector decarbonisation scheme (PSDS) y The trust’s application for the public sector LCSF grant was successful. We received a grant of £19,140 through Salix and the department of Business Energy and Industrial Strategy (BESI). The funding enabled the trust to carry out surveys for applicable sustainability technologies to reduce its carbon footprint and deliver an effective PSDS grant scheme application, however the £1bn fund made available by the government was oversubscribed and the trust’s £450k grant application was not successful. The trust is in a better position to put in another application once the government provides further funding opportunities; this is deemed to be imminent due to government’s commitment to sustainability. Waste management Due to the pandemic, clinical waste generated across all healthcare settings had increased significantly; PAHT produced 608 tonnes in 2020, an increase of 128 tonnes over 2019 data. This unprecedented increase in waste generation happened across the country and impacted on the national clinical waste treatment infrastructure leading to

regular service disruptions and the cabinet office established a national emergency logistic cell to manage the situation. The trust managed to remain compliant with the ‘COVID-19 waste management standard operating procedure (SOP) issued by the NHSE/I for the management of waste during the pandemic. We have implemented the guidance to ensure our waste is managed in a safe manner using appropriate receptacles and waste bags for infectious and non-infectious waste consignments so that our activities do not negatively affect critical national waste disposal resources during the emergency response period. Procurement - supply chain Through working collaboratively with our supply chain partners we currently have 75% of our electricity supply from renewable sources (not fossil) that are REGOS certified. The aim is to fully integrate sustainable and ethical procurement practices into our procurement strategies and processes for all goods and services. This is being incorporated into the procurement of our environment and sustainability related contract agreements. We will continue to specify environmentally friendly practises to our supply chain partners to ensure that our contract arrangements for services that have direct or indirect impact on the environment are managed with climate risk elements mitigated Looking ahead In addition to making visible the trust's commitment to work towards the national goal of keeping the global average temperature increase below 2°C and achieving net zero by 2050, we will continue to review the carbon footprint of our estates and its impact on the environment, our staff, patients and our finances in line with our strategy to decarbonise our facilities.

The performance report

y Scenario modelling using government, national and local data sets to assess various technical and financial approaches to net zero and informing other works, namely objective settings workshop y Objective setting workshop to collaborate with the trust to set a reasonable and achievable target for the net zero journey y Production of a net zero strategy in line with the NHS’s green plan guidance bringing together all data sources and work completed to compile an adoptable document supported by various technical workbooks

new premises and for off-site/local community healthcare services. Conclusion – sustainable development goals The trust is constantly striving to understand fully and reduce the environmental impact created through delivering quality healthcare services. We are also looking at how sustainable principles can help provide a better environment for our staff, patients and the local and global community. We will continue to analyse the environmental, social and economic impacts of our activities; covering the three approved global Greenhouse Gas (GHG) emission scope protocols (scopes one, two and three) with the aim of fully embedding sustainability themes throughout the whole organisation in compliance with the target set by the Climate Change Act (2008), net zero by the year 2045 and to fulfil our moral responsibilities of ensuring better environment for future generations.

Lance McCarthy Chief executive

The performance report

To achieve this we will: y Produce an achievable and measurable Green Plan (SDMP) from established site specific baseline data, pestle analysis and defined net zero pathway scenarios i.e. with outlined programme of goals where we can keep track of planned actions and progress. The actions will include: y Proposal to change fleet and estate vans to electric vehicles y Further removal of single use plastic from our restaurant y Switch over to low power laptops where reasonably practical y Collaboration to positively influence our supply chain partners y Drive further energy, water and carbon reductions in owned buildings and rented buildings y Achieving the BREEAM (Building Research Establishment Environmental Assessment Method) standard for all our capital projects and new builds y Maintain comprehensive measurement and reporting systems with external verification and publish our annual report y Challenge building contractors to propose cost-effective, low carbon solutions when undertaking refurbishment projects and monitor the benefits y Work with waste contractors to implement the waste hierarchy, achieve zero waste to landfill and turn residual waste into a resource opportunity wherever possible y Aim to increase the amount of electricity we purchase from the national grid that is generated from renewable energy sources y Produce a net zero strategy alongside partners to understand the trust’s current position and actions required to work towards net zero within the NHS’s timeframe no later than 2045 y Implementation of the trust's green travel plan to ensure that all travel options and impacts are taken into consideration when planning

Corporate governance report Our board

The trust board meets bi-monthly in public. The times and venues are advertised on the hospital’s website (www.pah.nhs.uk) and board papers are published ahead of each meeting. The role of the trust board is to determine strategy and policy for the trust, to monitor in-year performance against its plans and ensure the trust is well governed. The trust board formally operates in accordance with its governance manual comprising the standing orders, standing financial instructions and scheme of delegation.

Name

Position

Voting From

Lance McCarthy

Chief executive officer

03.05.17

Current

Trevor Smith

Chief financial officer

15.07.13

13.12.20

Simon Covill

Acting chief financial officer

01.09.20

13.12.20

Saba Sadiq

Director of finance

14.12.20

Current

Stephanie Lawton

Chief operating officer

02.03.16

Current

James McLeish Director of quality improvement

01.04.16

Current

Sharon McNally

10.10.18

Current

Ogechi Emeadi Director of people, organisational development and communications

01.08.18

Current

Michael Meredith

Director of strategy

04.06.18

Current

Marcelle Michail

Acting chief medical officer

30.03.30

31.10.20

Director of nursing and midwifery

The accountability report

Executive directors

Fay Gilder

Medical director

11.11.20

Current

Phil Holland

Chief information officer N

01.02.21

Current

Name

Position

Voting From

03.12.18

Current

Senior independent director and chair of audit committee Pam Court Non-executive director Chair of CFC util 01.01.20 and chair of PAF from 01.01.20 John Hogan Non-executive director Chair of QSC until 01.01.20 and chair of the strategy committee from 01.01.20 Helen Glenister Non-executive director Chair of CFC until 01.01.20 and chair of the QSC from 01.01.20 Helen Howe Non-executive director Chair of workforce committee from 01.04.20 John Keddie Associate nonexecutive director Chair of charitable funds commitee from 01.01.20 Darrel Arjoon NExT non-executive director

01.07.19

30.06.21

28.09.15

27.09.21

01.08.17

03.07.23

01.04.18

31.03.23

11.06.18

31.03.23

01.07.19

30.06.21

04.01.21

6-12 month placement

Darshana Bawa

NExT non-executive director

11.01.21

6-12 month placement

Anne WafulaStrike

Associate nonexecutive director

15.02.21

14.02.23

Steve Clarke

Chairman

George Wood

The accountability report

Non-executive directors

Attendance at board meetings

Number of board members present at board meetings in 2020-21:

The trust board has established the following committees to discharge its responsibilities on Board assurance:

Audit Committee

The Audit Committee provides the board of directors with an independent and objective review of financial and corporate governance, assurance processes and risk management across the whole of the trust’s activities (clinical and non-clinical) both generally and in support of the annual governance statement. In addition it oversees the work programmes for external and internal audit and receives assurance of their independence, monitoring the trust’s arrangements for corporate governance.

Remuneration and nominations committee

The remuneration and nominations committee determines the remuneration and terms of service of the trust’s directors and senior managers; it also considers the overall skill mix and balance of the board of directors.

Performance and Finance Committee The purpose of the Performance and Finance Committee is: • Consider, challenge and recommend the trust’s operating plan to the board

• Scrutinise operational and financial performance and monitor achievement of national and local targets and recommend any re-basing or re-forecasting of operational and financial performance trajectories to the board • Assure the board of directors that the trust has robust processes in place to prioritise its finance and resources and make decisions about their deployment to ensure that they best meet patients’ needs, deliver best value for money and are efficient, economical, effective and affordable • Recommend the trust’s cost improvement programme to the board and monitor its delivery including investigating reasons for variance from plan and recommend any re-basing or reforecasting of the plan to the board • Monitor the management of the trust’s asset base and the implementation of the trust’s enabling strategies in support of the trust’s clinical strategy and clinical priorities • Review and monitor the management of finance, performance and contracting risks

Quality and Safety Committee

The Quality and Safety Committee (QSC) functions as the trust’s umbrella clinical governance committee.

The accountability report

Committees

Workforce Committee

The purpose of the workforce committee is: • Maintain oversight of the development and design of the workforce and ensure it is aligned with the strategic context within which the trust is required to operate • Assure the trust board on all aspects of workforce and organisational development and provide leadership and oversight for the trust on workforce issues that support delivery of the trust’s annual objectives • Assure the trust board that the trust has adequate staff with the necessary skills and competencies to meet both the current and future needs of the trust and ensure delivery of efficient services to patients and service users

• Assure the trust board that legal and regulatory requirements relating to workforce are met

New Hospital Committee

The PAHT new hospital committee is established under delegated authority from the trust board to oversee the strategic direction and progress of the new build and provide a forum to monitor progress of the new hospital programme, including mitigation of risks and management of financial elements.

Charitable Funds Committee

The Charitable Funds Committee was established by the trust board to make and monitor arrangements for the control and management of the trust’s charitable funds.

The accountability report

It enables the trust board to obtain assurance that high standards of care are provided by the trust and that adequate and appropriate governance structures, processes and controls are in place throughout the trust to enable it to deliver a quality service according to each of the dimensions of quality set out in High Quality Care for All and enshrined through the Health and Social Care Act 2012.

Name

Title

Interests/memberships declared

Steve Clarke

Chairman

y Trustee and honorary treasurer of Dementia UK y Independent director, University of Suffolk y Trustee and honorary treasurer of Young Dementia UK y Wife employed by NHS England (EoE Regional Office)

Pam Court

Non-executive y Chief executive officer of Saint Francis Hospice director y Daughter employed by Princess Alexandra Hospital Trust

Helen Glenister

Non-executive y Chair of Accelerate CIC Limited director y Chief Eeecutive of Isabel Hospice y Chair of Saffron Walden Orchestral Society

Helen Howe

Non-executive y Trustee of Addenbrooke’s Charitable Trust director y Honorary professor pharmacy/chairman of pharmacy pre-registration training advisory group (HEE funded) for East of England y Member UEA undergraduate pharmacy advisory group y Chair of governors at Great Abington Primary School

John Hogan

Non-executive y Consultant cardiologist at Barts Health NHS director Trust y Non-executive director Whitfield Academy Trust

George Wood

Non-executive y Chairman of the King George's Hospital Charity director y Associate non-executive director BHRUT

John Keddie

Associate y Governor, Anglia Ruskin University non-executive y Trustee, Anglia Trust director y Chair, Harlow Growth Board y Chair, Discover Harlow Board y Deputy Chair, London Stansted Cambridge Consortium y Chair, ARU Direct Ltd

Darrel Arjoon

NExT Nonexecutive director

Darshana Bawa NExT Nonexecutive director

y Executive chair for Reuse Technology Group Ltd

y Finance director for Micro Scooter Ltd y Company secretary at Kit Imports Ltd

The accountability report

Statement of board members' interests 2020-21

NExT Nonexecutive director

Name

Title

y Founder of Olympia-Wafula Foundation y Non-executive director for UK Athletics y Non-executive director for British Paralympic Association y Non-executive director for Dimensions UK y Non-executive director for Active Essex

Interests/memberships declared

Lance McCarthy Chief executive officer

y Trustee, NHS providers

Saba Sadiq

Finance director

y No interests declared

Michael Meredith

Director of strategy and estates

y No interests declared

Ogechi Emeadi

Director of people, organisational development and communications

y No interests declared

Sharon McNaly

Director of nursing, midwifery and allied health professionals Chief operating officer

y No interests declared

Stephanie Lawton

y No interests declared

James McLeish Director of quality improvement

y Spouse is a paramedic for East of England Ambulance Service y Daughter is a student nurse, Anglia Ruskin University

Fay Gilder

Medical director

y Director, Gilder Medical Ltd

Phil Holland

Chief information officer

y No interests declared

Each director knows of no information which would be relevant to the auditors for the purposes of their audit report, and of which the auditors are not aware, and; has taken “all the steps that he or she ought to have taken” to make himself/ herself aware of any such information and to establish that the auditors are aware of it.

Statement of director’s responsibilities The full statement of director’s responsibilities is included in the financial statements. The statement of accounting officer’s responsibilities The chief executive of NHS Improvement, in exercise of powers conferred on the NHS trust development authority, has designated that the chief executive should be the accountable officer of the trust.

The accountability report

Anne WafulaStrike

The relevant responsibilities of accountable officers are set out in the NHS trust accountable officer memorandum. These include ensuring that:

At the same time, we have taken a full and active role within the Hertfordshire and West Essex Integrated Care System (ICS) and the West Essex Integrated Care Partnership system (ICP).

• There are effective management systems in place to safeguard public funds and assets and assist in the implementation of corporate governance.

Delivering high quality, timely and cost effective care to our local community are core components of our strategic objectives, and the ICS and ICP both give clear clinically led focus on improving standards, financial stability and adapting services to a growing and changing community across West Essex and Hertfordshire.

• The expenditure and income of the trust has been applied to the purposes intended by Parliament and conform to the authorities which govern them. • Effective and sound financial management systems are in place. • Annual statutory accounts are prepared in a format directed by the Secretary of State to give a true and fair view of the state of affairs as at the end of the financial year and the income and expenditure, recognised gains and losses and cash flows for the year. To the best of my knowledge and belief, I have properly discharged the responsibilities set out in my letter of appointment as an accountable officer.

Lance McCarthy Chief executive officer Date: 31 May 2021 The Princess Alexandra Hospital Annual Governance Statement 2020-21 My Annual Governance Statement (AGS) has been written describing the governance arrangements in place at the trust during 2020-21. During the year, we continued to review and strengthen our governance arrangements and took into account the findings of our CQC inspections together with continuing feedback and support from NHS England and Improvement.

The trust has received from the external auditors a qualified opinion on its financial statements in that the accounts present a true and fair view on the trust’s financial position for the 2020-21 financial year. The key financial results for 2020-21 are that the trust delivered a surplus of £1,816k. Scope of responsibility As accountable officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of the NHS trust’s policies, aims and objectives, whilst safeguarding the public funds and departmental assets for which I am personally responsible, in accordance with the responsibilities assigned to me. I am also responsible for ensuring that the NHS trust is administered prudently and economically and that resources are applied efficiently and effectively. I also acknowledge my responsibilities as set out in the NHS trust accountable officer memorandum.

The accountability report

• Value for money is achieved from the resources available to the trust.

The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the policies, aims and objectives of The Princess Alexandra Hospital NHS Trust, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control has been in place in The Princess Alexandra Hospital NHS Trust for the year ended 31 March 2021 and up to the date of approval of the annual report and accounts. The governance framework of the organisation The governance framework describes the structure and systems that are in place for the direction and control of the trust to fulfil the functions as set out in the Statutory Instrument 1994 No. 3179. These mechanisms include the board, its committees, management arrangements, governance manual and risk management strategy. The trust board is responsible for making sure we provide safe, effective and compassionate care to our patients at the same time as supporting their families, relatives and carers. It does this by making the key decisions that affect our hospital and setting the values, aims and strategic direction for the trust. It also reviews performance against our objectives, as well as against national standards and targets. It has overall responsibility for the effective control of the trust and is accountable, through its chairman, to NHS Improvement and the Secretary of State for Health and Social Care. The trust board consists of:

• a chairman • five voting non-executive directors and two non-voting associate non-executive directors • two non-voting NExT non-executive directors (NHSEI placement scheme) • five voting executive directors - chief executive officer, director of finance, medical director, chief operating officer and director of nursing, midwifery and allied health professionals and four further executive directors without voting rights; the director of people, organisational development and communications, the director of strategy and estates, the director of quality improvement and the chief information officer. The following non-executive director appointments were made in the year: • Helen Howe, previously an associate non-executive director was appointed as a substantive non-executive director in Andrew Holden’s vacant post; Andrew Holden’s term of appointment ended on 31 March 2020. • Two NExT non-executive directors, Darshana Bawa and Darrel Arjoon joined the board in January 2021. • Anne Wafula-Strike joined the board as an associate non-executive director in February 2021. The following executive appointments were made in the year: • Andy Morris, chief medical officer, was seconded to NHSEI to support COVID-19 planning and Marcelle Michail, deputy chief medical officer (strategy), was appointed as the acting chief medical officer, with effect from 30 March 2020 until 31 October 2020. • Fay Gilder, medical director, was appointed on 1 November 2020. • Trevor Smith, chief financial officer, left the trust on 31 August 2020 and Simon Covill was appointed as acting chief financial officer from 1 September to 13 December 2020. • Saba Sadiq, director of finance, was appointed on 14 December 2020.

The accountability report

The purpose of the system of internal control The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

Attendance at board and committee meetings throughout 2020-21 has been monitored and is recorded in the Annual Report.

Capacity to handle risk As chief executive, I am accountable for the overall risk management activity within the trust.

The trust board has established the following committees to discharge its responsibilities in relation to board assurance: • Audit Committee • Quality and Safety Committee • Performance and Finance Committee • Workforce Committee • New Hospital Committee • Remuneration and Nominations Committee • Charitable Funds Committee • Senior Management Team Meeting

Committed leadership in the area of risk management is essential to maintaining sound systems of internal control required to manage risks associated with the achievement of the corporate goals of the trust.

Following each meeting of the committees the committee chairs present written and verbal reports to the next board meeting. These reports provide a summary of the matters discussed at the meetings, areas of risk or concern as well as areas of good news or positive performance. Progress against the committees’ work plans is also included in each committee report to board. In response to the pandemic a full command and control structure was implemented from the end of January 2020. This consisted of a strategic command cell, with tactical cells managing operational response, clinical response, infection prevention and control, supporting our people, communications response and the management of our estate and infrastructure. In the peak of the pandemic, the cells met daily and as the number of COVID-19 patients reduced, the frequency of the meetings also reduced.

I am responsible for ensuring that the trust is in a position to provide overall assurance that the organisation has in place the necessary controls to manage its risk exposure. In discharging these responsibilities I was assisted by the following directors during 2020-21: • The director of finance has delegated responsibility for co-ordinating the management of financial and business related risk and assisted me in ensuring that the trust’s resources were managed efficiently, economically and effectively. • The director of nursing, midwifery and AHPs has delegated authority and responsibility for the professional leadership of the nursing, midwifery and allied health professions. The role is also the executive lead for infection prevention and control, with the director of infection prevention and control reporting to them. The role has delegated responsibility for reporting to the trust board on medicines management, the achievement of quality and patient experience standards and complaints and claims management and is PAHT's safeguarding lead.

The accountability report

An annual effectiveness review of each committee is undertaken to ensure they continue to meet their terms of reference. The outcomes of the reviews are reported to the trust board.

The trust’s risk management strategy details my overall accountability to the trust board for risk management and makes it clear that managing risk is a key responsibility for the trust and all staff employed by it. The trust board receives regular reports that detail quality, financial and operational performance risk, and, where required, the action being taken to reduce identified high-level risks.

The medical director is also the Caldicott Guardian for the trust. • The chief operating officer has delegated authority for managing the trust’s performance delivery both against national operating standards and key performance indicators together with local contractual standards set by the Clinical Commissioning Groups (CCGs). • The director of people, organisational development and communications has delegated responsibility for overseeing all people functions across the trust including recruitment, staff training and managing absence as well as embedding the trust’s people strategy and organisational development and culture programme. • The director of quality improvement has delegated responsibility for managing the trust’s transformation and modernisation programme as well as the quality first team and implementing the quality improvement strategy. • The director of strategy has delegated responsibility for managing the development of the new hospital, the estates strategy and the capital programme for the trust. • The chief information officer has delegated responsibility for ensuring that information governance arrangements at the trust are suitable, is the trust’s senior information risk owner (SIRO) and is responsible for the development and implementation of the digital strategy for the trust.

As chief executive I also hold responsibility for managing the strategic development and leadership of the trust’s quality improvement agenda; ensuring the implementation of the quality management improvement agenda; and ensuring the safety and quality of the care provided to our patients. All our people receive risk management and related training at induction and further updates as required. The training covers topics such as risk assessments, health and safety at work, moving and handling, fire safety, incident reporting, information governance as well as infection prevention and control. In addition to providing staff with skills and knowledge to carry out their work safely, staff are actively encouraged to report incidents and escalate any identified risks in a timely manner. In addition, thematic learning from incidents is shared through newsletters, internal safety alerts, simulation sessions and/or case scenarios through the trust’s sharing the learning sessions. We also support a programme of counter fraud training and awareness provided by the local counter fraud specialist team. The risk and control framework The role of the risk and control framework is to identify, evaluate and prioritise clinical and non-clinical risks and gain assurance that these are properly controlled to ensure safe and effective care. Within the trust, there are systems and processes in place for identifying, managing and monitoring risks. These include: • A risk management strategy (for the effective management of clinical and nonclinical risk) • A board committee structure with clear reporting lines to the trust board • A risk management group reporting to the trust board via senior management team meetings

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y The medical director has overall accountability for operational and clinical risk and incident management. This includes the establishment and monitoring of assurance mechanisms and provision of associated risk reports to the trust board. The medical director also has delegated responsibility for co-ordinating and monitoring the trust’s revalidation programme for medical staff in line with the ‘Maintaining High Professional Standards’ system for the NHS.

Risk is managed at different levels of the organisation. Each health care group and corporate department has a risk register that is regularly reviewed, ensuring that risk scores are accurate and that risks are appropriately mitigated, managed and escalated. Each risk on the register has a risk owner accountable for that risk. The risk management group meets on a monthly basis to review risks across all health care groups as well as corporate departments. The group’s objectives are: y To champion and promote the identification, proactive management of risks and sound risk management practices across the trust, facilitating and embedding a strong risk management process and culture. y To ensure the identification of the burden of risks across the trust by providing a critical review of risks on all risk registers y To offer constructive challenge, serving as risk moderators in the trust's risk escalation process and ensuring that significant risks are appropriately escalated y To support the delivery of the trust’s objectives by obtaining assurance on the effectiveness of controls and actions identified to minimise risks y To improve the standard of decision making on risk management The trust has a board assurance framework (BAF) which provides a mechanism for the board to monitor the risks to delivery of the trust’s strategic objectives as well as the effectiveness of the controls and assurance processes. The risks reflect the trust’s in-year and future risks. Each risk on the BAF has an executive lead and a designated responsible committee. The risks are reviewed monthly with executive leads and are

reviewed by the relevant committees and the trust board bi-monthly. The Risk Management Group reviews the BAF by exception. The highest scoring BAF risks throughout 2020-21 were the risks relating to our estate/infrastructure, delivery of the ED standard and our financial position. Further detail on these risks and their management is outlined in the Annual Report. Following the annual review of the trust’s risk management processes and BAF by the trust’s internal auditors an overall assessment of reasonable assurance was provided. Quality governance arrangements There is clear accountability at board level for patient safety and clinical quality outcomes along with structured reporting of performance against these objectives. Executive oversight of quality improvement is through the director of nursing, midwifery and allied health professionals who, with the medical director ensures an organisation-wide approach to the integrated delivery of the quality governance agenda. For any transformational change required, they are supported by the trust’s quality improvement team. Each of the trust’s four health care groups has a patient safety and quality group where themes and trends from reviews of incidents and complaints and learning are reported. Performance is reviewed at monthly performance review meetings and at the quality and safety committee each health care group presents a quarterly overview of its performance on a rolling programme, in line with the CQC key lines of enquiry. Throughout 2020-21, the quality and safety committee continued to receive updates on progress against the quality improvement plan developed to address concerns raised by the CQC during their inspection.

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y A significant risk register and board assurance framework, both of which are reviewed by the risk management group and trust board y Monitoring systems for incidents and complaints

Following a review of the quality governance framework in quarter four of 2019-20 a new structure for the meeting groups reporting to the quality and safety committee was agreed and implemented during 2020-21. Mortality is monitored by the quality and safety committee as well as the trust board. The statistical markers for mortality have been higher than expected for 2020-21. The trust’s rolling HSMR for the last 12 months has been ‘higher than expected’. The SHMI has been ‘as expected’. For the period December 2019 to November 2020 (including a time lag of one month) the trust’s HSMR was 116 (higher than expected) but improved from 2018-2019 (122). It is anticipated that the HSMR will continue to improve. PAHT is one of six trusts within the peer group of 15 that sit within the ‘higher than expected’ range. A trust-wide mortality improvement programme was established which utilised quality improvement methodology to deliver improvements in patient outcomes across a number of identified work streams. Medical examiners have been appointed and structured judgement reviews are undertaken. The quality and safety committee receives monthly reports on mortality and learning from deaths whilst the trust board receives an update at every public board meeting (held bi-monthly). The quality and safety committee and trust board receive monthly reports on nursing and midwifery staffing levels in line with guidance received from NHS England and the Care Quality Commission on the delivery of the ‘hard

truths’ commitments associated with publishing staffing data regarding nursing, midwifery and care staff levels. CEO assurance panels have been convened to provide enhanced oversight and assurance where high risk areas have been identified in relation to quality. In October 2020 the trust reported its first Never Event since 2016. It related to unintentional connection of a patient requiring oxygen to an air flowmeter. This was reported as a serious incident and a full root cause analysis was undertaken with immediate learning noted and actions taken. Well-led reviews The board commissioned an external review of the well-led framework in March 2021 and the outcome of that review will be reported to the board in June 2021. The board’s own self-assessment against the CQC’s well-led framework resulted in an overall rating of ‘Good’ being assigned. The CQC rated the trust as ‘Good’ for well-led at its last inspection. Compliance with NHS provider licence The trust is compliant with the following NHS provider licence conditions: y The provider has taken all precautions necessary to comply with the licence, NHS acts and NHS constitution (condition G6 (3)). y The provider has complied with required governance arrangements (condition FT4 (8)). In relation to general condition 4 (Fit and proper persons) of the provider licence the trust has a robust process for monitoring the trust’s compliance with the regulations. Annual compliance checks, by way of annual self-declarations are undertaken and reported to the Workforce Committee.

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Regular ‘sharing the learning’ reports providing an overview of themes, trends and learning arising from incidents, serious incidents and on-going quality improvement initiatives for topics such as falls, dementia and pressure ulcers are also received. The chief pharmacist provides regular reports to the committee on medicines management.

department. y The trust’s workforce plan underpins the trust’s annual operating plan which is reviewed by the Performance and Finance Committee and approved by the trust board. y The trust remains focused on increasing and retaining its core nursing workforce, utilising new roles such as nursing associates, paramedics and physician associates whilst continuing to further develop and embed new workforce models. Working with our ICS partners we will continue to explore opportunities for joint roles as we identify workforce models that support integrated working and the implementation of our new models of care. Managing conflicts of interest The trust has published an up-to-date register of interests, including gifts and hospitality for decision-making staff within the past twelve months, as required by the ‘managing conflicts of interest in the NHS’ guidance. The trust’s audit committee monitors and approves the registers of interest. Care Quality Commission The trust is fully compliant with the registration requirements of the Care Quality Commission (CQC). The last full inspection conducted by the CQC was completed in March and April 2019 with the report published in July 2019. This showed improvements, with five of the trust’s core services rated as Good. The trust received an outstanding rating for ‘caring’ for children and young people. The overall quality rating for the Trust remained the same at ‘Requires Improvement’. However, the trust received an overall rating of ‘Good’ for both the well-led assessment and also for the use of resources assessment.

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Developing workforce safeguards The trust ensures that short, medium and long-term workforce strategies and staffing systems are in place which provide assurance to the trust board that staffing processes are safe, sustainable and effective. Compliance with the ‘developing workforce safeguards’ recommendations is demonstrated through the following systems: y The integrated performance report (IPR) is received at each public trust board meeting and details a range of staffing metrics including vacancy rates, sickness absence, turnover, appraisal rates, friends and family test results, statutory and mandatory training compliance. y A workforce report is presented to the workforce committee bi-monthly where the metrics listed above are scrutinised. y The safer nurse staffing report is presented to the Quality and Safety Committee monthly and bi-monthly to the Workforce Committee and trust board; this details the actions taken to provide safe, sustainable and productive staffing levels for nursing, midwifery and care staff as well as providing an update on nursing vacancy rates, and in 2020-21, the plans to further reduce the vacancy rate to achieve the target vacancy rate. y Trust board reporting is underpinned by monthly performance review reports which detail a range of performance indicators including vacancy rates, sickness absence, turnover, maternity leave, training and average absence y Freedom to Speak Up Guardians and Guardian of Safe Working reports are presented to the trust board and Workforce Committee. y Electronic job planning processes are in place for medical staff. y Bi-annual nursing and midwifery establishment reviews are undertaken and reported to the Workforce Committee, Quality and Safety Committee and the trust board. The reviews utilise the Safer Nursing Care Tool (SNCT) for adult ward areas, the Baseline Emergency Staffing Tool (BEST) for the emergency department and birth-rate plus for the maternity

Immediate actions were implemented following receipt of the warning notice, with further actions underway. Formal progress against these concerns is due to be reported to the CQC by 1 June 2021. A review of all core services across the trust is being undertaken to ensure this learning is shared widely and improves the safety and quality of care our patients receive. NHS pension scheme As an employer with staff entitled to membership of the NHS pension scheme, control measures are in place to ensure all employer obligations contained within the scheme regulations are complied with. This includes ensuring that deductions from salary, employer’s contributions and payments into the scheme are in accordance with the scheme rules, and that member pension scheme records are accurately updated in accordance with the timescales detailed in the regulations. Equality, diversity and human rights Control measures are in place to ensure that all the organisation’s obligations under equality, diversity and human rights legislation are complied with. Carbon reduction The trust has undertaken risk assessments and has a sustainable development management plan in place which takes account of UK climate

projections 2018 (UKCP18). The trust ensures that its obligations under the Climate Change Act and the adaptation reporting requirements are complied with. Review of economy, efficiency and effectiveness of the use of resources The trust has a governance manual comprising standing orders and standing financial instructions, which provide the framework for ensuring appropriate authorisation of expenditure commitments in the trust. The board’s processes for managing its resources include approval of annual budgets for both revenue and capital, reviewing financial performance against these budgets, and assessing the results of the trust’s cost improvement programme on a monthly basis. The trust has a process for the development of business cases for both capital and revenue expenditure and, depending on the level of investment, these are reviewed by the senior management team, performance and finance committee and trust board. The performance and finance committee reviews productivity, operational and financial performance and use of resources both at trust and health care group level. The trust was rated ‘good’ following the use of resources assessment in March 2019. More details of the trust’s performance and some specific trust projects aimed at increasing efficiency are included in the Annual Report. The trust’s external auditors are required to consider whether the trust has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. They report the results of their work to the Audit Committee. Information governance/data security risks The trust has reported two information governance (IG) data security breaches to the Information Commissioner's Office (ICO) during 2020-21 and both have been closed. The first breach related to a member of bank staff accessing a patient record inappropriately in breach of trust policy. The ICO has investigated and closed this incident with no further action

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Following the CQC winter assurance visit on 14 February 2021, the CQC issued a Section 29a warning notice in relation to a lack of effective governance processes including: 1. Risk assessments were not being completed for all patients within the emergency department. 2. A lack of assurance that patients presenting with acute mental health illness were receiving timely assessments. 3. A lack of adherence to infection, prevention and control procedures. 4. The process for the provision of the out of hours endoscopy service for patients presenting with acute upper gastrointestinal bleeding was not embedded

Elective waiting time data Patients who have been referred to the trust on a Cancer Waiting Time or Referral to Treatment (RTT) pathway are managed daily by the clinical and operational teams, in line with the hospital’s access policy and the national addendum relating to COVID-19. These pathways are reviewed at weekly Patient Tracker List (PTL) meetings, chaired by the performance manager where pathway trigger points are reviewed and remedial actions taken, if required. The PTL meetings report to the weekly access board meetings which are chaired by the head of performance and planning. The access board also reviews RTT data quality reports and determines required actions to ensure that processes maintain accurate data recording. In addition, a number of data quality reports are produced to enable the service management teams to monitor patients on non-RTT pathways. These are reviewed through the data quality steering group. Both the access board and the data quality steering group report to the senior management team and then onto performance and finance committee and the trust board. Review of effectiveness As accountable officer, I have responsibility for reviewing the effectiveness of the system of internal control. My review of the effectiveness of the system of internal control is informed by the work of the internal auditors, clinical audit, the executive team, managers and clinical leads within the trust who have responsibility for the development and maintenance of the internal control framework. I have drawn on the information provided in this annual report and other

performance information available to me. My review is also informed by comments made by the external auditors in their management letter and other reports. I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the trust board and audit committee and a plan to address weaknesses and ensure continuous improvement of the system is in place. The trust has an annual clinical audit programme in place including mandated audits addressing national and local issues, targets and performance. The trust’s internal auditors provide an opinion on the overall arrangements for gaining assurance as part of the riskbased annual internal audit plan. During the year, the following internal audit report received a limited assurance rating: y Supply chain and EROS – authorisation controls The trust’s internal auditors undertook a detailed follow up exercise of the recommendations in relation to the limited assurance reports and concluded that all high priority recommendations had either been implemented by the trustor or were not yet due for implementation. Action plans are in place to address internal audit’s recommendations for all audits undertaken. The internal auditors provide a progress report to the executive management team, senior management team and audit committee. The executive team as well as the audit committee continues to focus on the implementation of recommendations to ensure the audit committee is receiving adequate assurance that control weaknesses are being addressed. Head of Internal Audit Opinion (HoIA) on the effectiveness of the system of internal control for the year ended 31 March 2021: The purpose of my annual HoIA Opinion is to contribute to the assurances available to the accounting officer and the board which underpin the board’s

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taken. The second breach occurred due to human error, where documents from a vacated room were left unsecured in a space outside the back of a building for a limited time. The ICO has investigated and closed this incident with no further action taken.

My opinion is set out as follows: 1. Overall opinion 2. Basis for the opinion 3. Commentary 1. My overall opinion is that reasonable assurance can be given that there is a generally sound system of internal control, designed to meet the organisation’s objectives, and that controls are generally being applied consistently. However, some weakness in the design and/or inconsistent application of controls, put the achievement of particular objectives at risk. 2.The basis for forming my opinion is as follows: i.An assessment of the design and operation of the underpinning assurance framework and supporting processes; and ii. An assessment of the range of individual opinions arising from riskbased audit assignments contained within internal audit risk-based plans that have been reported throughout the year. This assessment has taken account of the relative materiality of these areas and management’s progress in respect of addressing control weaknesses. Additional areas of work that may support the opinion will be determined locally but are not required for Department of Health purposes e.g. any reliance that is being placed upon third party assurances. Significant issues The following is a summary of significant issues which were and will continue to be the focus of the trust board’s attention and direct the trust’s management efforts during 2021 (and beyond); these issues are also reflected on the Board Assurance Framework: Operational performance – A&E standard The trust has struggled to deliver

against this standard throughout the year. Year to date the trust achieved 83.2% for all attendances. The urgent care attendances during the year have been untypical of an average year, with the pandemic reducing non COVID-19 attendances. During most of 2020 the trust maintained the four hour standard ahead of the national average however in the winter and early 2021 the increase in COVID-19 attendances and admissions created pressure on bed capacity across the trust and the urgent care department was unable to place patients on wards quickly enough to maintain the four hour standard. The Rapid Assessment Treatment (RAT) pathways continued to be in place over the year but staff absence due to COVID-19 impacted the number of RAT teams available for this pathway. Patient experience and the flow of patients in to and through the hospital has been enhanced by the opening of the Adult Assessment Unit and Same Day Emergency Care in addition to improvements in the frailty unit. The urgent care improvement board meets on a weekly basis to review actions being taken to improve performance against the standard. Recovery plans remain in place to address performance issues both internally and across the health and social care system. There is also a system wide local delivery board supporting the management of urgent care patients across all parts of the health and care sectors. The urgent care board and governance structure beneath has been enhanced following the CQC unannounced winter assurance visit on 14 February 2021.

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own assessment of the effectiveness of the organisation’s system of internal control. This opinion will in turn assist the Board in the completion of its Annual Governance Statement (AGS).

The intensity of the response to the pandemic has had a marked impact on the trust’s people. The same group of staff who worked through the pandemic are stepping up to recover elective backlogs and the trust has launched a number of health and wellbeing initiatives to support colleagues. The trust has expanded endoscopy, CT and MRI capacity to support the management of cancer patients and has continued to work closely with independent sector colleagues to maximise access to key services and maintain timely services for patients. All patients who have been waiting for longer than they would do normally continue to be reviewed by the relevant clinical team and reprioritised where relevant. The trust acknowledges the scale of the challenge that lies ahead and continues to work with partners across the local health and care system to bring waiting lists down in a way that is transparent and equitable, that provides equity for patients and looks after the workforce. Despite a huge amount of hard work from everyone it will be some time before the trust’s services are restored to pre-pandemic levels. Estate The quality and safety of the estate remain significant challenges for us at a time of financial constraint. It has been well communicated that the current hospital estate has reached its limit in terms of capacity and development. A significant portion of the hospital site is more than 60 years old and falls short of modern day expectations with areas of key infrastructure in need of replacement.

Our ability to keep up with the changing clinical landscape, technological advances and delivery of new models of care is limited by our current estate. These key risks and concerns drive our long term estate strategy which includes building a new hospital to address these challenges and enable the trust to be successful in delivering integrated care as part of an Integrated Care Partnership. However we still need to deliver high quality, efficient services from the current estate for at least the next five years. Conclusion As accountable officer, I receive information and assurance from a wide range of sources about the trust’s internal control systems and structures in place to ensure the effective operation of the trust. These facilitate the identification of strengths and areas in need of attention enabling appropriate action plans to be established and acted on. Although some significant issues have been identified, my review confirms that the trust has a generally sound system of internal control that supports the achievement of its policies, aims and objectives and statutory duties. I and the trust board remain committed to achieving continuous improvement and enhancement of the systems of internal control.

Lance McCarthy Chief executive officer (31 May 2021)

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COVID-19: recovery and restoration The impact of the COVID-19 pandemic on the trust’s services has been significant. As elective procedures were reduced during the pandemic, there has been an increase in the number of patients waiting for more than 52 weeks for routine surgery and a rise in demand for diagnostic services.

Remuneration and staff report

The trust has established a remuneration and nominations committee to advise and assist the board in meeting its responsibilities to ensure appropriate remuneration, allowances and terms of service for the chief executive officer, executive directors and very senior managers. The remuneration committee is chaired by the trust’s chairman and meets at least annually. Membership of the committee consists of the trust chairman and all non-executive directors with the director of people and others in attendance. The chief executive officer and directors' remuneration is determined on the basis of reports to the remuneration and nominations committee taking account of any independent evaluation of the post, national guidance on pay rates and market rates. Pay rates for the chair and non-executive directors of the trust are determined in accordance with national guidance. The trust does not operate any system of performance related pay and no proportion of remuneration is dependent on performance conditions. The performance of non-executive directors is appraised by the chair. The performance of the chief executive officer is appraised by the chair. The performance of trust executive directors is appraised by the chief executive officer. Annual pay increases are implemented in accordance with national pay awards for all other NHS staff.

Pay multiples Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the median remuneration of the organisation’s workforce. y The banded remuneration of the highest paid director in PAHT in the financial year 2020-21 was £185k-£190k (£235k- £240k in 201920). This was 5.7 times the median remuneration of the workforce which was £33.1k (in 2019-20 the ratio was 7.5 times with the median remuneration being £31.8k) y In 2020-21, 19 employees received remuneration in excess of the highest paid director (this was 2 employees in 2019-20). Remuneration ranged from the bands £0k-£5k to £270k-£275k (in 2019-20 these were £0k-£5k to £255k-£260k) y Total remuneration includes salary, benefits-in-kind, golden hellos and compensation for loss of office. It does not include employer pension contributions, termination payments and the cash equivalent transfer value of pensions Consultancy and professional services spend 2020-21 total expenditure on consultancy and professional services was £3,419k (2019-20 £3,532k).

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Background This report includes details regarding “senior managers” remuneration in accordance with paragraphs 3.31 to 3.78 of the DHSC (Department of Health and Social Care) Group Accounting Manual 2020-21. The remuneration report set out below is subject to audit by our external auditors.

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Employee benefits

Staff sickness and ill health retirements

Annual references for staff sickness absence relate to calendar years. For ill health retirements, year references relate to financial years. Staff sickness absence data can be accessed via NHS Digital using the following link: NHS Digital Staff Sickness Data

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Average staff numbers

Reporting of compensation schemes exit packages 2020-21 (subject to audit)

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Redundancy and other departure costs have been paid for in accordance with the provisions of the NHS Pensions Scheme. Exit costs in this note are accounted for in full in the year of departure. Where the trust has agreed early retirements, the additional costs are met by the trust and not by the NHS Pensions Scheme. Ill health retirement costs are met by the NHS Pensions Scheme and are not included in the table.

Exit packages: other (non-compulsory) departure payments (subject to audit)

Note: the prior year exit packages figure has been restated for 1 case (“other” £27k) identified during 20/21 as relating to 19/20. Off payroll arrangements No individual holding a board position was paid directly through an associated limited company. During 2020-21 there were no executive posts covered by off-payroll arrangements.

Table of salaries - executive directors (subject to audit)

1. Not a member of the NHS Pension Scheme 2. Where calculations of pension related benefits returns a negative figure, this has been replaced with a zero as per national guidance. Negative balances can be returned where a member retires, or leaves the pension scheme, during the year.

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Table of salaries - non-executive directors (subject to audit)

Salary pension entitlement of senior managers (subject to audit)

1. Member opted out of pension scheme during 2019-20. 2. Real increase to lump sum may be low/zero or negative as now a member of 2008/2015 scheme which does not provide automatic lump sum. 3. Member retired in 2020-21.

CETV is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member's accrued benefits and any contingent spouse's pension payable from the scheme. A CETV is a payment made by a pension scheme, or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which the disclosure applies. The CETV figures and the other pension details include the value of any pension benefits in another scheme or arrangement which the individual has transferred to the NHS Pension Scheme.

They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries. Real increase / (decrease) in CETV - this reflects the increase in CETV effectively funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another scheme or arrangement) and uses common market valuation factors for the start and end of the period.

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There are no entries in respect of pensions for non-executive members as they do not receive pensionable remuneration.

The National NHS Staff Survey

The feedback is useful in helping highlight strengths, and determine improvements that will make the hospital a better place to both work and be treated. A full census was held in the trust between 28 September and 27 November 2020 with all our people employed on 1 September 2020 having the opportunity to take part. In total 1368 (38.2%) completed and returned their survey questionnaire, which was 6.8% lower than 2019, and 6.8% lower than the average 2020 response rate (there are 128 acute and acute and community trusts within our benchmarking group). The table below summarises the survey results by the key national themes, benchmarked against the 128 other trusts. The full findings report of the 2020 NSS were presented to the Workforce

Committee in March 2021 and to the full Trust Board in April 2021. Action plans are being developed by each of the health care groups to address those areas most requiring improvement, which will align to three priority actions identified by the trust: Priority one: Improving the physical and mental health and wellbeing of our people Priority two: Improving our learning and safety culture, encouraging people to openly raise concerns and ensure they are acted upon (improving psychological safety) Priority three: Improving the effectiveness of line managers Action plan progress will be monitored by the executive team at monthly performance review meetings, with bi-monthly assurance reporting to the Workforce Committee and updates to trust board. These are particularly important as we continue to deliver our quality improvement plan, which focuses on enabling outstanding care for all of our patients, all of the time.

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The annual NHS National Staff Survey (NSS) is recognised as an important tool for ensuring that the views of people working in the NHS are used to help inform local improvements.

PAHT COVID-19 Staff Survey Following a recommendation from the PAHT COVID-19 people cell a decision was taken by the strategic cell to replace the formal SFFT quarter one survey with a specifically designed COVID-19 survey. The survey ran from 26 May to 21 June 2020, and a total of 3529 questionnaires were issued (via e-mail and QR codes). PAHT received 739 full completions and 387 partial completions, with an overall response rate (full and partial) of 31.91%. A full report was made available to all PAHT staff, and a summary of the findings was presented to Workforce Committee in September 2020. Responses ranged from issues initially with PPE supply and the impact of ward moves, to positive feedback from our people feeling supported by the organisation, and appreciation for the daily COVID-19 communications updates.

Staff breakdown March 2021 staff composition

Male

Female

Executive directors 4

Other employees

825

2921

Total

829

2925

Staff turnover March Male 2021 staff composition Executive 4 directors

Female

Other employees

825

2921

Total

829

2925

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2020-21 Staff Friends and Family Test Due to the pandemic, NHSE/I issued new guidance pausing the quarterly Staff Friends and Family Test (SFFT) surveys from quarter one (April to June 2020) to quarter four (January to March 2021).

The equality, diversity and inclusion steering group meets monthly to review activities and initiatives to promote and support awareness and education of equality, diversity and inclusion (EDI) at PAHT. Due to the COVID-19 pandemic, the monthly meetings have been successfully held virtually. It has also required the steering group to review the ways it can highlight EDI activities, predominately through virtual events. Black, Asian and Minority Ethnic (BAME) staff are an identified group that is disproportionately more likely to be impacted by COVID-19. In collaboration with other trusts within the Integrated Care System (ICS), we have developed a number of initiatives to support our BAME staff: y Establishment of a BAME staff support line y Agreed consistent risk assessment and outcomes for all COVID-19 identified vulnerable groups y Research methods were explored to understand BAME staffing needs and views on the COVID-19 response y Creation of system-wide EDI network and BAME chairs network for ongoing transformation The steering group agreed a calendar of events for 2020-21, to promote protected

characteristics throughout the year. Some activities focused on celebrations, others on awareness and education. These events have included: y Working in partnership with the staff health and wellbeing (SHaW) team and infection prevention control (IPC) colleagues on the content for InTouch briefings. The aim of these briefings was to raise awareness of the importance of completing COVID-19 risk assessments and to give colleagues an opportunity to ask questions of a panel of experts on COVID-19 vaccinations y We celebrated Black History Month in October 2020, supported by a calendar of webinars and a social media campaign with engaging content throughout the month y We marked International Men’s Day in November 2020, with a variety of content across our internal and external communications channels to promote the work of our #PAHTPeople y We recognised Armed Forces Day on 27 June 2020 with a special feature in our staff newsletter, InTouch weekly y Linking with Essex Pride, we celebrated LGBT+ Pride in June 2020, developing bespoke graphics with quotes from our #PAHTPeople, which we promoted across our internal and external communications channels y We celebrated International Women’s Day on 8 March 2021 and this year’s theme of ‘choose to challenge’ across our internal and external communications channels. This included an InTouch briefing with a panel of inspirational women from PAHT sharing their experiences.

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Equality and diversity: significant achievements during 2020-21

As we reflect on the past year and raise our eyes to view the year to come, we must pay respect to all that we have learnt from the last year and make sure that we continue to make a difference to our patients and care for each other and those around us. Currently (May 2021), the COVID-19 pandemic remains with us and the Government has a roadmap to the easing of lockdown restrictions. Of course, the significant difference that 12 months has brought us are the COVID-19 vaccines and the delivery of many thousands of vaccinations across our people and local communities. We will continue to support the vaccination programme and work with our system partners in ensuring people have all the information they need about the vaccination options available to them. Back to better As an organisation, we have been focusing in recent months on the learning from the pandemic and on resetting how we work and provide care differently in to the future, building on the many changes that we put in place at great speed over the last year. Although we will, and need, to get back to a more familiar routine and deliver business as usual, we must make sure that we continue to improve and make sure that in moving back to a new normal that this is better for our patients and for our people. For our patients, this will mean maximising the improvements we have made to further enhance the care we provide. For our people, this will mean a continued focus on the changes we make and the guidance, assistance and health and wellbeing support that is available. Working together Aligned to the NHS Long Term Plan’s ambitions around more collaboration and integration in local health and social care settings, we are proactively involved in strengthening existing partnership working. We are also at the forefront of seeking the greater efficiencies that will

come from combining how services are delivered and using the time released for patients and continued improvements. PAHT 2030 Our vision to deliver outstanding healthcare to our community underpins our PAHT 2030 strategy and improvement plans to achieve our three goals, to be: Modern Integrated Outstanding Our PAHT 2030 plans are based on five key strategic priorities: 1. Our culture 2. Transforming our care 3. Digital health 4. Corporate modernisation 5. New hospital The business case development, design and build of a new hospital for local people will continue with a focused attention on ensuring we have a hospital fit for the 21st century that maximises technology to deliver the very best care for our patients, Our focus on our journey to outstanding, delivered through the detailed plans in place for PAHT 2030, remains clear. Our amazing people are our greatest asset and with their passion and energy we will continue to work together with our health and social care partners to make a difference to our patients and the people living and working in the communities we serve.

Lance McCarthy Chief executive

Looking forward

The Princess Alexandra Hospital NHS Trust, Hamstel Road, Harlow, Essex, CM20 1QX 01279 44 44 55 NHSHarlow @NHSHarlow @PrincessAlexandraNHS The Princess Alexandra Hospital NHS Trust 74

The Princess Alexandra Hospital NHS Trust Annual Accounts for year ended 31 March 2021

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Statement of the chief executive’s responsibilities as the accountable officer of the Trust The chief executive of NHS Improvement, in exercise of powers conferred on the NHS trust development authority, has designated that the chief executive should be the accountable officer of the trust. The relevant responsibilities of accountable officers are set out in the NHS trust accountable officer memorandum. These include ensuring that: - there are effective management systems in place to safeguard public funds and assets and assist in the implementation of corporate governance - value for money is achieved from the resources available to the trust - the expenditure and income of the trust has been applied to the purposes intended by Parliament and conform to the authorities which govern them - effective and sound financial management systems are in place and - annual statutory accounts are prepared in a format directed by the Secretary of State to give a true and fair view of the state of affairs as at the end of the financial year and the income and expenditure, other items of comprehensive income and cash flows for the year. As far as I am aware, there is no relevant audit information of which the trust’s auditors are unaware, and I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the entity’s auditors are aware of that information. To the best of my knowledge and belief, I have properly discharged the responsibilities set out in my letter of appointment as an accountable officer.

Chief Executive ______________________________________

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Date: 11 June 2021

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

11 June 2021

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Statement of directors’ responsibilities in respect of the Accounts

The Directors are required under the National Health Service Act 2006 to prepare accounts for each financial year. The Secretary of State, with the approval of HM Treasury, directs that these accounts give a true and fair view of the state of affairs of the Trust and of the income and expenditure, other items of comprehensive income and cash flows for the year. In preparing those accounts, the Directors are required to: - apply on a consistent basis accounting policies laid down by the Secretary of State with the approval of the Treasury; - make judgements and estimates which are reasonable and prudent; - state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the Accounts; and - prepare the financial statements on a going concern basis and disclose any material uncertainties over going concern. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the trust and to enable them to ensure that the accounts comply with requirements outlined in the above mentioned direction of the Secretary of State. They are also responsible for safeguarding the assets of the trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors confirm to the best of their knowledge and belief they have complied with the above requirements in preparing the accounts. The Directors confirm that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for patients, regulators and stakeholders to assess the NHS Trust’s performance, business model and strategy

By order of the Board

Chief Executive

________________________________

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Date: 11 June 2021

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21 Finance Director

________________________________

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Date: 11 June 2021

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Independent auditor’s report to the directors of The Princess Alexandra Hospital NHS Trust Qualified Opinion We have audited the financial statements of The Princess Alexandra Hospital NHS Trust for the year ended 31 March 2021 under the Local Audit and Accountability Act 2014. The financial statements comprise the Trust’s Statement of Comprehensive Income, the Trust Statement of Financial Position, the Trust Statement of Changes in Taxpayers’ Equity, the Trust Statement of Cash Flows and the related notes 1 to 36. 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 2020/21 HM Treasury’s Financial Reporting Manual (the 2020/21 FReM) as contained in the Department of Health and Social Care Group Accounting Manual 2020/21 and the Accounts Direction issued by the Secretary of State with the approval of HM Treasury as relevant to the National Health Service in England (the Accounts Direction). In our opinion, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements: • give a true and fair view of the financial position of The Princess Alexandra Hospital NHS Trust as at 31 March 2021 and of its expenditure and income for the year then ended; a • have been prepared properly in accordance with the National Health Service Act 2006 (as amended by the Health and Social Care Act 2012) and the Accounts Directions issued thereunder. Basis for qualified opinion Due to the restrictions on movement imposed as a result of the COVID-19 pandemic, in 2019/20 the trust was unable to undertake, and we were unable to observe, the counting of physical inventories at the beginning of the year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 31 March 2020, which are included as comparatives in the balance sheet at £4.565 million, by using other audit procedures. Consequently, we were unable to determine whether any adjustment to this amount was necessary the year ended 31 March 2021. We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report below. We are independent of the trust in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and the Comptroller and Auditor General’s (C&AG) AGN01 and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Conclusions relating to going concern In auditing the financial statements, we have concluded that the Directors use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Trust’s ability to continue as a going concern for a period of 12 months to 30 June 2022 from when the financial statements are authorised for issue.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Independent auditor’s report to the directors of The Princess Alexandra Hospital NHS Trust (continued) Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Trust’s ability to continue as a going concern. Other information The other information comprises the information included in the Annual Report 2020 – 2021, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the comparative inventory quantities of £4.565 million held at 31 March 2020. We have concluded that where the other information refers to the comparative inventory balance, it may be materially misstated for the same reason. Opinion on other matters prescribed by the Health Services Act 2006 Basis for qualification on the remuneration report The remuneration report, set out on pages 73 to 82, does not disclose the total accrued pension, accrued lump sum and the cash equivalent transfer value for the acting chief medical officer and medical director because the NHS Business Services Authority did not request the information from the NHS Pensions Agency. Qualified opinion on the remuneration report Except for the reasons set out in the basis for qualification on the remuneration report, in our opinion the part of the remuneration report subject to audit has been prepared properly in accordance with requirements of the National Health Service Act 2006. Opinion on the staff report In our opinion the part of the staff report subject to audit has been prepared properly in accordance with requirements of the National Health Service Act 2006. Matters on which we are required to report by exception We are required to report to you if: • in our opinion the governance statement does not comply with the NHS Improvement’s guidance; or

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

• 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 Trust, or an officer of the Trust, 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; or • we issue a report in the public interest under section 24 of the Local Audit and Accountability Act 2014; or

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Independent auditor’s report to the directors of The Princess Alexandra Hospital NHS Trust (continued) • we make a written recommendation to the Trust under section 24 of the Local Audit and Accountability Act 2014; or • we are not satisfied that the Trust has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2021. We have nothing to report in these respects. Responsibilities of the Directors and Accountable Officer As explained more fully in the Statement of Directors’ Responsibilities in respect of the Accounts, set out on page 3, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Directors are responsible for assessing the Trust’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to cease operations, or has no realistic alternative but to do so. As explained in the statement of the Chief Executive's responsibilities, as the Accountable Officer of the Trust, the Accountable Officer is responsible for ensuring that the financial statements are prepared in a format directed by the Secretary of State and for the arrangements to secure economy, efficiency and effectiveness in the use of the Trust's resources. Auditor’s responsibility for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Trust and determined that the most significant are the National Health Service Act 2006 (as amended by the Health and Social Care Act 2012), as well as relevant employment laws of the United Kingdom. In addition, the Trust has to comply with laws and regulations in the areas of anti-bribery and corruption, data protection and health & safety.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Independent auditor’s report to the directors of The Princess Alexandra Hospital NHS Trust (continued) • We understood how The Princess Alexandra Hospital NHS Trust is complying with those frameworks by understanding the incentive, opportunities and motives for noncompliance, including inquiring of management, internal audit and those charged with governance and obtaining and reviewing documentation relating to the procedures in place to identify, evaluate and comply with laws and regulations, and whether they are aware of instances of non-compliance. We corroborated this through our review of the Trust’s board minutes, through enquiry of employees to verify Trust policies, and through the inspection of HR Policies and other information. Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures had a focus on compliance with the accounting framework through obtaining sufficient audit evidence in line with the level of risk identified and with relevant legislation. • We assessed the susceptibility of the Trust’s financial statements to material misstatement, including how fraud might occur by understanding the potential incentives and pressures for management to manipulate the financial statements, and performed procedures to understand the areas in which this would most likely arise. Based on our risk assessment procedures, we identified manipulation of reported financial performance (through improper recognition of revenue), inappropriate capitalisation of revenue expenditure and management override of controls to be our fraud risks. • To address our fraud risk around the manipulation of reported financial performance through improper recognition of revenue, we reviewed the Trust’s manual year end receivable and payable accruals, challenging assumptions and corroborating the income and expenditure to appropriate evidence. We tested year-end cut-of arrangements by selecting samples of income and expenditure from either side of the 31 March 2021 balance sheet date and reviewing to supporting evidence to ensure these were recorded in the appropriate financial year. We also undertook cut-off testing of expenditure as at month 6 of the financial year to establish whether the Trust had incorrectly included expenditure relating to later months that would trigger Reimbursement and top-up funding for that period of the financial year that it would otherwise not be entitled to. • To address our fraud risk of inappropriate capitalisation of revenue expenditure we tested the Trust’s capitalised expenditure to ensure the capitalisation criteria were properly met and the expenditure was genuine. • To address our fraud risk of management override of controls, we tested specific journal entries identified by applying risk criteria to the population of manual journals. For each journal selected, we tested specific transactions back to source documentation to confirm that the journals were appropriate. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Page 7

Independent auditor’s report to the directors of The Princess Alexandra Hospital NHS Trust (continued) 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 reporting criteria issued by the Comptroller and Auditor General in April 2021, as to whether the Trust had proper arrangements for financial sustainability, governance and improving economy, efficiency and effectiveness. The Comptroller and Auditor General determined these criteria as that necessary for us to consider under the Code of Audit Practice in satisfying ourselves whether the Trust put in place proper arrangements for securing economy, efficiency and effectiveness in its use of 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 Trust had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources. We are required under section 21(3)(c), as amended by schedule 13 paragraph 10(a), of the Local Audit and Accountability Act 2014 to be satisfied that the Trust 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 Trust’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively. Certificate We certify that we have completed the audit of the accounts of The Princess Alexandra Hospital NHS Trust in accordance with the requirements of the Local Audit and Accountability Act 2014 and the Code of Audit Practice. Use of our report This report is made solely to the Board of Directors of The Princess Alexandra Hospital NHS Trust, as a body, in accordance with Part 5 of the Local Audit and Accountability Act 2014 and for no other purpose. Our audit work has been undertaken so that we might state to the Directors of the Trust 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 Directors, for our audit work, for this report, or for the opinions we have formed.

Debbie Hanson (Key Audit Partner) Ernst & Young LLP (Local Auditor)

Luton 17-Jun-21

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Statement of comprehensive income 2020/21 Note £000's Operating income from patient care activities Other operating income Operating expenses Operating surplus from continuing operations

3 4 6

267,835 47,287 (308,104) 7,018

2019/20 £000's 246,747 41,744 (286,048) 2,443

Finance income Finance expenses PDC dividends payable Net finance costs

11 12 22

(18) (3,034) (3,052)

85 (2,032) (1,947)

Surplus for the year from continuing operations

3,966

496

Other comprehensive income Revaluations Other recognised gains and losses Total comprehensive income for the period

1 1

613 117 730

Adjusted financial performance (control total basis): Surplus for the period Net impairments not scoring to DHSC expenditure limit Net impact of inventories received from DHSC for COVID Remove I&E impact of capital grants and donations Remove 2018/19 post audit PSF reallocation Adjusted financial performance surplus

3,966 341 (655) (1,836) 1,816

496 (78) (368) 50

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Statement of financial position

Non-current assets Intangible assets Property, plant and equipment Receivables Total non-current assets Current assets Inventories Receivables Cash and cash equivalents Total current assets Current liabilities Trade and other payables Borrowings Provisions Other liabilities Total current liabilities Total assets less current liabilities Non-current liabilities Borrowings Provisions Total non-current liabilities Total assets employed Financed by Public dividend capital Revaluation reserve Income and expenditure reserve Total taxpayers' equity

31 March 2021 Note £000's

31 March 2020 £000's

14 15 18

7,169 137,845 1,189 146,203

7,633 117,405 692 125,730

17 18 19

5,697 8,381 65,242 79,320

4,565 49,837 1,144 55,546

20 22 24 21

(49,070) (30) (1,142) (2,180) (52,422) 173,101

(27,068) (150,958) (1,186) (1,158) (180,370) 906

22 24

(10) (1,077) (1,087) 172,014

(40) (767) (807) 99

320,559 591 (149,136) 172,014

133,863 19,343 (153,107) 99

The notes on pages 13 to 49 form part of these accounts.

11 June 2021 Date

Chief Executive

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Statement of changes in equity for the year ended 31 March 2021 Public dividend capital £000's Taxpayers' equity at 1 April 2020 133,863Surplus for the year Other transfers between reserves Impairments Revaluations Other recognised gains and Public dividend capital received 186,696 Taxpayers' equity at 31 March 2021 320,559 Taxpayers' equity at 1 April 2019 Surplus for the year Other transfers between reserves Revaluations Other recognised gains and Public dividend capital received Taxpayers' equity at 31 March 2020

130,918 2,945 133,863

Revaluation reserve

Income and expenditure reserve

£000's 19,343(5) (18,748) 1 591

£000's (153,107) 3,966 5 (149,136)

18,626 (13) 613 117 19,343

(153,616) 496 13 (153,107)

Public dividend capital Public Dividend Capital (PDC) is a type of public sector equity finance based on the excess of assets over liabilities at the time of establishment of the predecessor NHS organisation. Additional PDC may also be issued to Trusts by the Department of Health and Social Care. A charge, reflecting the cost of capital utilised by the Trust, is payable to the Department of Health and Social Care as the Public Dividend Capital. Income and expenditure reserve The balance of this reserve is the accumulated surpluses and deficits of the trust. Revaluation reserve Increases in asset values arising from revaluations are recognised in the revaluation reserve, except where, and to the extent that, they reverse impairments previously recognised in operating expenses, in which case they are recognised in operating income. Subsequent downward movements in asset valuations are charged to the revaluation reserve to the extent that a previous gain was recognised unless the downward movement represents a clear consumption of economic benefit or a reduction in service potential.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Total £000's 993,966 (18,748) 1 186,696 172,014 (4,072) 496 613 117 2,945 99

e based on the excess ssor NHS organisation. Health and Social Care. e to the Department of

of the trust.

sed in the revaluation mpairments previously d in operating income. ged to the revaluation e downward movement service potential.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Statement of cash flows 2020/21 £000's

2019/20 £000's

7,018

2,443

10,451 341 (1,857) 41,230 (1,132) 11,374 273

9,385 (98) (30,746) (50) 3,989 1,015

67,698

(14,062)

4 (446) (35,562)

85 (522) (13,042)

(36,004)

(13,479)

186,696 (150,467) (30) (461) (3,309) (25)

2,945 26,511 (20) (1,937) (11)

Net cash flows from financing activities

32,404

27,488

Increase / (decrease) in cash and cash equivalents

64,098

(53)

Cash and cash equivalents at 1 April

1,144

1,197

65,242

1,144

Note Cash flows from operating activities Operating surplus Non-cash income and expense: Depreciation and amortisation Net impairments Income recognised in respect of capital donations Decrease / (increase) in receivables and other assets Increase in inventories Increase in payables and other liabilities Increase in provisions

6 7 4

Net cash flows from / (used in) operating activities Cash flows from investing activities Interest received Purchase of intangible assets Purchase of PPE and investment property Net cash flows from / (used in) investing activities Cash flows from financing activities Public dividend capital received Movement on loans from DHSC Capital element of finance lease rental payments Interest on loans PDC dividend paid Cash flows used in other financing activities

Cash and cash equivalents at 31 March

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Notes to the Accounts Note 1. Accounting policies and other information Note 1.1 Basis of preparation The Department of Health and Social Care has directed that the financial statements of the Trust shall meet the accounting requirements of the Department of Health and Social Care Group Accounting Manual (GAM), which shall be agreed with HM Treasury. Consequently, the following financial statements have been prepared in accordance with the GAM 2020/21 issued by the Department of Health and Social Care. The accounting policies contained in the GAM follow International Financial Reporting Standards to the extent that they are meaningful and appropriate to the NHS, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the GAM permits a choice of accounting policy, the accounting policy that is judged to be most appropriate to the particular circumstances of the trust for the purpose of giving a true and fair view has been selected. The particular policies adopted are described below. These have been applied consistently in dealing with items considered material in relation to the accounts. Note 1.1.1 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. Note 1.1.2 Going concern These accounts have been prepared on a going concern basis, in accordance with the definition as set out in section 4 of the Department of Health and Social Care (DHSC) Group Accounting Manual (GAM) which outlines the interpretation of IAS1 'Presentation of Financial Statements' as "the anticipated continuation of the provision of a service in the future, as evidenced by the inclusion of financial provision for that service in published documents". The directors of the trust have considered whether there are any local or national policy decisions that are likely to affect the continued funding and provision of services by the Trust. The Trust is a member of the Hertfordshire and West Essex Integrated Care System (ICS). The ICS has published its Strategic Delivery Plan and NHS Long Term Plan response for the five year period 2020/21 - 2024/25 and this plan includes the continued provision of services by the trust. In addition, the trust continues to develop an Outline Business Case to build a new hospital, which is being supported by a variety of stakeholders. No circumstances were identified causing the Directors to doubt the continued provision of NHS services. For the 2020/21 financial year, the trust achieved a surplus of £1.8m against a planned deficit of £0.4m. Income from our local Clinical Commissioning Groups was largely based on the adapted finance regime introduced in response to the COVID-19 pandemic and this provided predictability and improved cash flow with the Trust finishing the year with a £65.2m cash balance. Additional costs arising from the pandemic were reimbursed in the first half the year and incorporated into a block payment basis for the second half of the year.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

In April 2020, the DHSC and NHS England and NHS Improvement (NHSE/I) announced reforms to the NHS cash regime for the 2020/21 financial year. During 2020/21 existing DHSC interim revenue loans as at 31 March 2020 were extinguished and replaced with the issue of Public Dividend Capital (PDC) to allow their repayment. Consequently, the Trust received PDC of £146.2m to repay these loans which had accumulated from prior year deficits. In addition, capital loans of £4.3m were also extinguished and replaced with PDC and therefore total net assets increased by £150.5m. This strengthened the value of the trust’s Statement of Financial Position and means that the trust is no longer required to generate surpluses to service this historic debt.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Notes to the Accounts Note 1. Accounting policies and other information (continued) For 2021/22 the current financial funding arrangements will remain in place for the first half of the year, with additional funding to support elective recovery post COVID. The national financial arrangements for the second half of the year are not fully known at this stage and while the implications of COVID-19 should be greatly reduced, there is likely to be some ongoing effect and, potentially, additional funding for this. The trust’s income is largely based on commissioner block contracts which will continue throughout the second half of the year. Reducing the trust’s underlying cost base and increasing efficiencies is essential with the focus on delivering a cost-improvement programme of £6.7m (or 2.2%). In 2019/20, the Trust achieved £9.9m (or 3.4%) of cost improvements and therefore is reasonably assured of being able to achieve this target. The Trust has prepared a cash forecast modelled on the above expectations for funding during the going concern period to 30 June 2022. The cash forecast shows sufficient liquidity for the Trust to continue to operate during that period with no need to borrow. In addition, the Trust has access to working capital arrangements should the need for this arise. In conclusion, these factors, and the anticipated future provision of services in the public sector, support the Trust’s adoption of the going concern basis for the preparation of the accounts. Note 1.2 Critical judgements in applying accounting policies In the application of the trust'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 considered 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 both the estimate is revised if the revisions affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The following are the judgements, apart from those involving estimations (see below) that management has made in the process of applying the trust's accounting policies and that have the most significant effect on the amounts recognised in the financial statements: • Adoption of the going concern basis (see note 1.1.2) • Classification of leases as finance or operating leases. Leases have been reviewed to determine if they are classified as operating or finance leases in line with IAS17. Critical judgements include whether the ownership transfers at the end of the term, the level of risk transfer, whether the lease term is for a major part of the economic life of the asset and whether the present value of the minimum lease payment is substantially all of the fair value of the asset.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Department of Health and Social Care guidance specifies that the trust’s land and buildings should be valued on the basis of depreciated replacement cost, applying the Modern Equivalent Asset (MEA) concept. The MEA is defined as “the cost of a modern replacement asset that has the same productive capacity as the property being valued.” Therefore the MEA is not a valuation of the existing land and buildings that the Trust holds, but a theoretical valuation for accounting purposes of what the trust could need to spend in order to replace the current assets. The MEA valuation approach continues to be adopted by the Trust (Note 1.7.2). The Valuer has continued to exercise professional judgement in providing the valuation and this remains the best information available to the trust. The valuation is not reported as being subject to ‘material valuation uncertainty’ as defined by VPS 3 and VPGA 10 of the RICS Valuation.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Notes to the Accounts Note 1. Accounting policies and other information (continued) Note 1.2.1 Sources of estimation uncertainty The following are assumptions about the future and other major sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year: Provisions (Note 24) Provisions have been made for legal and constructive obligations of uncertain timing or amount as at the reporting date where the liability meets the recognition criteria of IAS 37. These are based on judgements and estimates of future cash flows and are dependent on future events. Any differences between expectations and the actual future liability will be accounted for in the period when such determination is made. Public liability claims are based on information received from the NHS Resolution (NHSR, previously NHS Litigation Authority) which handles claims on behalf of the trust. For cases not yet concluded, provision, or contingent liability, is made according to NHSR assessment of expected outcomes. Pensions provisions are based on information received from NHS Pension Agency (part of NHS Business Services Authority). Other provisions for legal and constructive obligations (including employment) are made by management, and informed by professional opinion. Provisions are made where past events are known and settlement by the Trust is probable and a reliable estimate can be made. As actual settlement is not known at the reporting date provisions are calculated on the best information available on likely settlement at the date the Accounts are approved. Accruals At the end of each accounting period management review expenditure items that are outstanding and estimate the amount to be accrued in financial statements. Accruals are generally based on estimates and judgements of historical trends and outcomes. Any variation in prior periods has not been material to the Accounts. Inventories In 2019/20 the Trust was unable to perform a complete stocktake of all inventory items, specifically the impact of COVID led to an inability to access some clinical areas e.g. Theatres. For those areas not counted in 2019/20 the Trust performed a mid year stocktake count during September 2021. In addition, during March 2021 the Trust has reperformed a full inventory count of all inventory held. To ensure completeness and accuracy of inventory verification this exercise was supported by a suitably qualified third party. The final value of the stockholding was £5.7m. This compares to the previous calculated stock value of £4.6m. The increase in inventory includes consumables and drugs increases totalling £0.5m. In addition during 2020/21, and as part of the response to COVID the Trust received 'Push' deliveries of Personal Proteactive Equipment (PPE). The cost of this PPE was funded centrally with the closing stock of PPE inventory Note 1.3 Charitable funds

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Under the provisions of IAS 27 Consolidated and Separate Financial Statements, those Charitable Funds that fall under common control with NHS bodies are consolidated within the entity's financial statements. IAS 1 states that specific disclosure requirements as set out in individual standards or interpretations need not be satisfied if the information is not material, and on that basis the Trust has not consolidated its Charitable Funds.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Notes to the Accounts Note 1. Accounting policies and other information (continued) Note 1.4 Revenue Note 1.4.1 Revenue from contracts with customers Where income is derived from contracts with customers, it is accounted for under IFRS 15. The GAM expands the definition of a contract to include legislation and regulations which enables an entity to receive cash or another financial asset that is not classified as a tax by the Office of National Statistics (ONS). Revenue in respect of goods/services provided is recognised when (or as) performance obligations are satisfied by transferring promised goods/services to the customer and is measured at the amount of the transaction price allocated to those performance obligations. At the year end, the trust accrues income relating to performance obligations satisfied in that year. Where the trust’s entitlement to consideration for those goods or services is unconditional a contract receivable will be recognised. Where entitlement to consideration is conditional on a further factor other than the passage of time, a contract asset will be recognised. Where consideration received or receivable relates to a performance obligation that is to be satisfied in a future period, the income is deferred Revenue from NHS contracts The accounting policies for revenue recognition and the application of IFRS 15 are consistently applied. The contracting arrangements in the NHS changed between 2019/20 and 2020/21 affecting the application of the accounting policy under IFRS 15. This difference in application is explained below. Current Year (2020/21) The main source of income for the trust is contracts with commissioners for health care services. In 2020/21, the majority of the Trust’s income from NHS commissioners was in the form of block contract arrangements. During the first half of the year the Trust received block funding from its commissioners. For the second half of the year, block contract arrangements were agreed at an Integrated Care System level. The related performance obligation is the delivery of healthcare and related services during the period, with the Trust’s entitlement to consideration not varying based on the levels of The Trust has received additional income outside of the block and system envelopes to reimburse specific costs incurred and other income top-ups to support the delivery of services. Reimbursement and top-up income is accounted for as variable consideration. Comparative period (2019/20) In the comparative period (2019/20), the Trust’s contracts with NHS commissioners included those where the Trust’s entitlement to income varied according to services delivered. A performance obligation relating to delivery of a spell of health care was generally satisfied over time as healthcare was received and consumed simultaneously by the customer as the Trust performed it. The customer in such a contract was the commissioner, but the customer benefited as services were provided to their patient.

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Even where a contract could be broken down into separate performance obligations, healthcare generally aligned with paragraph 22(b) of the Standard entailing a delivery of a series of goods or services that were substantially the same and had a similar pattern of transfer. At the year end, the Trust accrued income relating to activity delivered in that year, where a patient care spell was incomplete. This accrual was disclosed as a contract receivable as entitlement to payment for work completed was usually only dependent on

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Notes to the Accounts Note 1. Accounting policies and other information (continued) For 2020/21 and 2019/20 Where the effects of practical expedients mandated by the GAM are material, these should be disclosed as accounting policies. These include: (1) As per paragraph 121 of the Standard the Trust does not disclose information regarding performance obligations part of a contract that has an original expected duration of one year or less. (2) The GAM does not require the Trust to disclose information where revenue is recognised in line with the practical expedient offered in paragraph B16 of the Standard where the right to consideration corresponds directly with value of the performance completed to date. (3) The GAM has mandated the exercise of the practical expedient offered in C7A of the Standard that requires the Trust to reflect the aggregate effect of all contracts modified Revenue from research contracts Where research contracts fall under IFRS 15, revenue is recognised as and when performance obligations are satisfied. For some contracts, it is assessed that the revenue project constitutes one performance obligation over the course of the multi-year contract. In these cases it is assessed that the Trust’s interim performance does not create an asset with alternative use for the Trust, and the Trust has an enforceable right to payment for the performance completed to date. It is therefore considered that the performance obligation is satisfied over time, and the Trust recognises revenue each year over the course of the contract. Some research income alternatively falls within the provisions of NHS injury cost recovery scheme The Trust receives income under the NHS injury cost recovery scheme, designed to reclaim the cost of treating injured individuals to whom personal injury compensation has subsequently been paid, for instance by an insurer. The Trust recognises the income when performance obligations are satisfied. In practical terms this means that treatment has been given, it receives notification from the Department of Work and Pension's Compensation Recovery Unit, has completed the NHS2 form and confirmed there are no discrepancies with the treatment. The income is measured at the agreed tariff for the treatments provided to the injured individual, less an allowance for unsuccessful compensation claims and doubtful debts in line with IFRS 9 requirements of measuring Provider Sustainability Fund (PSF) and Financial Recovery Fund (FRF) In 2019/20, the Provider Sustainability Fund and Financial Recovery Fund enabled providers to earn income linked to the achievement of financial controls and performance targets. Income earned from the funds is accounted for as variable consideration. A revised financial regime was established for 2020/21 and PSF and PRF were not Note 1.4.2 Other income Grants and donations Government grants are grants from government bodies other than income from commissioners or trusts for the provision of services. Where a grant is used to fund revenue expenditure it is taken to the Statement of Comprehensive Income to match that expenditure. Where the grant is used to fund capital expenditure, it is credited to the consolidated statement of comprehensive income once conditions attached to the grant have been met. Donations are treated in the same way as government grants.

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Notes to the Accounts Note 1. Accounting policies and other information (continued) Apprenticeship service income The value of the benefit received when accessing funds from the Government's apprenticeship service is recognised as income at the point of receipt of the training service. Where these funds are paid directly to an accredited training provider from the Trust’s Digital Apprenticeship Service (DAS) account held by the Department for Education, the corresponding notional expense is also recognised at the point of recognition for the benefit. Note 1.5 Expenditure on employee benefits Short-term employee benefits Salaries, wages and employment-related payments such as social security costs and the apprenticeship levy are recognised in the period in which the service is received from employees. The cost of annual leave entitlement earned but not taken by employees at the end of the period is recognised in the financial statements to the extent that employees are permitted to carry-forward leave into the following period. Pension costs - NHS Pension Scheme Past and present employees are covered by the provisions of the two NHS Pension Schemes. Both schemes are unfunded, defined benefit schemes that cover NHS employer, general practices and other bodies, allowed under the direction of Secretary of State for Health and Social Care in England and Wales. The scheme is not designed in a way that would enable employers to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as though it is a defined contribution scheme: the cost to the trust is taken as equal to the employer’s pension contributions payable to the scheme for the accounting period. The contributions are charged to operating expenses as they become due. Additional pension liabilities arising from early retirements are not funded by the scheme except where the retirement is due to ill-health. The full amount of the liability for the additional costs is charged to the operating expenses at the time the trust commits itself to the retirement, regardless of the method of payment. Note 1.6 Expenditure on other goods and services Expenditure on goods and services is recognised when, and to the extent that they have been received, and is measured at the fair value of those goods and services. Expenditure is recognised in operating expenses except where it results in the creation of a non-current asset such as property, plant and equipment. Note 1.7 Property, plant and equipment Note 1.7.1 Recognition Property, plant and equipment is capitalised where: • it is held for use in delivering services or for administrative purposes • it is probable that future economic benefits will flow to, or service potential be provided to, the Trust • it is expected to be used for more than one financial year Page 18

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

• the cost of the item can be measured reliably • the item costs at least £5,000, or • collectively, a number of items have a cost of at least £5,000 and individually cost more than £250, where the assets are functionally interdependent, had broadly simultaneous purchase dates, are anticipated to have similar disposal dates and are under single managerial control.

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Notes to the Accounts Note 1. Accounting policies and other information (continued) Where a large asset, for example a building, includes a number of components with significantly different asset lives, e.g. plant and equipment, then these components are treated as separate assets and depreciated over their own useful economic lives. Note 1.7.2 Measurement Valuation All property, plant and equipment assets are measured initially at cost, representing the costs directly attributable to acquiring or constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner intended Assets are measured subsequently at valuation. Assets which are held for their service potential and are in use (i.e. operational assets used to deliver either front line services or back office functions) are measured at their current value in existing use. Assets that were most recently held for their service potential but are surplus with no plan to bring them back into use are measured at fair value where there are no restrictions on sale at the reporting date and where they do not meet the definitions of investment properties or assets held for sale. Revaluations of property, plant and equipment are performed with sufficient regularity to ensure that carrying values are not materially different from those that would be determined at the end of the reporting period. Current values in existing use are • Land and non-specialised buildings – market value for existing use • Specialised buildings – depreciated replacement cost on a modern equivalent asset basis. For specialised assets, current value in existing use is interpreted as the present value of the asset’s remaining service potential, which is assumed to be at least equal to the cost of replacing that service potential. Specialised assets are therefore valued at their depreciated replacement cost (DRC) on a modern equivalent asset (MEA) basis. An MEA basis assumes that the asset will be replaced with a modern asset of equivalent capacity and location requirements of the services being provided. Assets held at depreciated replacement cost have been valued on an alternative site basis where this would meet the location requirements. Properties in the course of construction for service or administration purposes are carried at cost, less any impairment loss. Cost includes professional fees and, where capitalised in accordance with IAS 23, borrowings costs. Assets are revalued and depreciation commences when the assets are brought into use. IT equipment, transport equipment, furniture and fittings, and plant and machinery that are held for operational use are valued at depreciated historic cost where these assets have short useful lives or low values or both, as this is not considered to be materially different from current value in existing use.

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The valuation exercise was carried out from 13 January 2021 to 31 March 2021 with the valuation date being 31 March 2021. Valuations were undertaken in accordance with International Financial Reporting Standards (IFRS) as interpreted, and applied by the HMT Treasury FReM compliant with Department of Health Group Manual for Accounts. They are also prepared in accordance with the professional standards of the Royal Institution of Chartered Surveyors: RICS Valuation - Global Standards 2017 and RICS UK National Supplement, commonly known together as the 'Red Book'.

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Notes to the Accounts Note 1. Accounting policies and other information (continued) Impact of COVID-19 on valuation In applying the RICS Valuation Global Standards the valuer has recognised the outbreak of the COVID-19 pandemic on the 11 March 2020. The valuer recognises the pandemic, and the measures taken to tackle COVID-19 continue to affect economies and real estate market. Nevertheless, as at the valuation date some property markets have started to function again, with transaction volumes and other relevant evidence returning to levels where an adequate quantum of market evidence exists upon which to base opinions of value. Accordingly, and for the avoidance of doubt, the valuer's valuation is not reported as subject to 'material uncertainty' as defined by the RICS valuation - global standard. In respect of the total value of estate, being the aggregate of current values, including depreciated replacement cost, of operating properties, the fair values of non-operational properties and excluding leased properties as at 31 March 2021 may be taken to be £89.985m. These values can be apportioned between land £8.150m and buildings £81.835m. On the basis, and for the reasons outlined above, the Board of Directors are content that the valuation used is reasonable and materially valid. Subsequent expenditure Subsequent expenditure relating to an item of property, plant and equipment is recognised as an increase in the carrying amount of the asset when it is probable that additional future economic benefits or service potential deriving from the cost incurred to replace a component of such item will flow to the enterprise and the cost of the item can be determined reliably. Where a component of an asset is replaced, the cost of the replacement is capitalised if it meets the criteria for recognition above. The carrying amount of the part replaced is de-recognised. Other expenditure that does not generate additional future economic benefits or service potential, such as repairs and maintenance is charged to the Statement of Comprehensive Income in the period in which it is incurred. Depreciation Items of property, plant and equipment are depreciated over their remaining useful lives in a manner consistent with the consumption of economic or service delivery benefits. Freehold land is considered to have an infinite life and is not depreciated. Property, plant and equipment which have been reclassified as ‘held for sale’ cease to be depreciated upon the reclassification. Assets in the course of construction and residual interests in off-Statement of Financial Position PFI contract assets are not depreciated until the asset is brought into use or reverts to the Trust, respectively. Revaluation gains and losses Revaluation gains are recognised in the revaluation reserve, except where, and to the extent that, they reverse a revaluation decrease that has previously been recognised in operating expenses, in which case they are recognised in operating expenditure. Revaluation losses are charged to the revaluation reserve to the extent that there is an available balance for the asset concerned, and thereafter are charged to operating Page 20

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Gains and losses recognised in the revaluation reserve are reported in the Statement of Comprehensive Income as an item of ‘other comprehensive income’.

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Notes to the Accounts Note 1. Accounting policies and other information (continued) Impairments In accordance with the GAM, impairments that arise from a clear consumption of economic benefits or of service potential in the asset are charged to operating expenses. A compensating transfer is made from the revaluation reserve to the income and expenditure reserve of an amount equal to the lower of (i) the impairment charged to operating expenses; and (ii) the balance in the revaluation reserve attributable to that asset before the impairment. An impairment that arises from a clear consumption of economic benefit or of service potential is reversed when, and to the extent that, the circumstances that gave rise to the loss is reversed. Reversals are recognised in operating expenditure to the extent that the asset is restored to the carrying amount it would have had if the impairment had never been recognised. Any remaining reversal is recognised in the revaluation reserve. Where, at the time of the original impairment, a transfer was made from the revaluation reserve to the income and expenditure reserve, an amount is transferred back to the revaluation reserve when the impairment reversal is recognised. Other impairments are treated as revaluation losses. Reversals of ‘other impairments’ are treated as revaluation gains. Note 1.7.3 De-recognition Assets intended for disposal are reclassified as ‘held for sale’ once the criteria in IFRS 5 are met. The sale must be highly probable and the asset available for immediate sale in its present condition. Following reclassification, the assets are measured at the lower of their existing carrying amount and their fair value less costs to sell. Depreciation ceases to be charged and the assets are not revalued, except where the 'fair value less costs to sell' falls below the carrying amount. Assets are de-recognised when all material sale contract conditions Property, plant and equipment which is to be scrapped or demolished does not qualify for recognition as ‘held for sale’ and instead is retained as an operational asset and the asset’s useful life is adjusted. The asset is de-recognised when scrapping or demolition Note 1.7.4 Donated and grant funded assets Donated and grant funded property, plant and equipment assets are capitalised at their fair value on receipt. The donation/grant is credited to income at the same time, unless the donor has imposed a condition that the future economic benefits embodied in the grant are to be consumed in a manner specified by the donor, in which case, the donation/grant is deferred within liabilities and is carried forward to future financial years to the extent that the condition has not yet been met. The donated and grant funded assets are subsequently accounted for in the same manner as other items of property, plant and equipment. In 2020/21 this includes assets donated to the trust by the Department of Health and Social Care as part of the response to the coronavirus pandemic. As defined in the GAM, the Trust applies the principle of donated asset accounting to assets that the Trust controls and is obtaining economic benefits from at the year end. Page 21

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Notes to the Accounts Note 1. Accounting policies and other information Note 1.7.5 Useful lives of property, plant and equipment Useful lives reflect the total life of an asset and not the remaining life of an asset. The range of useful lives are shown in the table below: Min life Max life Years Years Buildings 15 30 Plant & machinery 5 15 Transport equipment 3 7 Information technology 5 8 Furniture & fittings 5 15 Finance leased assets (including land) are depreciated over the shorter of the useful life or the lease term, unless the Trust expects to acquire the asset at the end of the lease term in which case the assets are depreciated in the same manner as owned assets Note 1.8 Intangible assets Note 1.8.1 Recognition Intangible assets are non-monetary assets without physical substance which are capable of being sold separately from the rest of the trust’s business or which arise from contractual or other legal rights. They are recognised only where it is probable that future economic benefits will flow to, or service potential be provided to, the trust and where the cost of the asset can be measured reliably. Internally generated intangible assets Internally generated goodwill, brands, mastheads, publishing titles, customer lists and similar items are not capitalised as intangible assets. Expenditure on research is not capitalised. Expenditure on development is capitalised when it meets the requirements set out in IAS 38. Software Software which is integral to the operation of hardware, e.g. an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software which is not integral to the operation of hardware, e.g. application software, is capitalised as an intangible asset. Note 1.8.2 Measurement Intangible assets are recognised initially at cost, comprising all directly attributable costs needed to create, produce and prepare the asset to the point that it is capable of operating in the manner intended by management.

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Subsequently, intangible assets are measured at current value in existing use. Where no active market exists, intangible assets are valued at the lower of depreciated replacement cost and the value in use where the asset is income generating. Revaluations gains and losses and impairments are treated in the same manner as for property, plant and equipment. An intangible asset which is surplus, with no plan to bring it back into use, is valued at fair value where there are no restrictions on sale at the reporting date, and where they do not meet the definitions of investment properties or assets held for sale. Intangible assets held for sale are measured at the lower of their carrying amount or “fair value less costs to sell”.

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Notes to the Accounts Note 1. Accounting policies and other information Amortisation Intangible assets are amortised over their expected useful lives in a manner consistent with the consumption of economic or service delivery benefits. Note 1.8.3 Useful economic life of intangible assets Useful lives reflect the total life of an asset and not the remaining life of an asset. The range of useful lives are shown in the table below: Min life Years Information technology Development expenditure

Max life Years 5 8

8 8

Note 1.9 Inventories Inventories are valued at the lower of cost and net realisable value. The cost of inventories is measured using the weighted average cost method. In 2020/21, the Trust received push inventories including personal protective equipment Note 1.10 Cash and cash equivalents Cash is cash in hand and deposits with any financial institution repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments that mature in three months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. In the statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and that form an integral part of the trust’s cash management. Cash, bank and overdraft balances are recorded at current values. Note 1.11 Financial assets and financial liabilities Note 1.11.1 Recognition Financial assets and financial liabilities arise where the trust is party to the contractual provisions of a financial instrument, and as a result has a legal right to receive or a legal obligation to pay cash or another financial instrument. The GAM expands the definition of a contract to include legislation and regulations which give rise to arrangements that in all other respects would be a financial instrument and do not give rise to transactions classified as a tax by the Office of National Statistics (ONS). This includes the purchase or sale of non-financial items (such as goods or services), which are entered into in accordance with the trust’s normal purchase, sale or usage requirements and are recognised when, and to the extent which, performance occurs, i.e. when receipt or delivery of the goods or services is made. Note 1.11.2 Classification and measurement

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Financial assets and financial liabilities are initially measured at fair value plus or minus directly attributable transaction costs except where the asset or liability is not measured at fair value through income and expenditure. Fair value is taken as the transaction price, or otherwise determined by reference to quoted market prices or valuation techniques.

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Notes to the Accounts Note 1. Accounting policies and other information (continued) Financial assets or financial liabilities in respect of assets acquired or disposed of through finance leases are recognised and measured in accordance with the accounting policy for leases described below: • Financial assets are classified as fair value through income and expenditure. • Financial liabilities classified as fair value through income and expenditure. Financial assets and financial liabilities at amortised cost Financial assets and financial liabilities at amortised cost are those held with the objective of collecting contractual cash flows and where cash flows are solely payments of principal and interest. This includes cash equivalents, contract and other receivables, trade and other payables, rights and obligations under lease arrangements and loans receivable After initial recognition, these financial assets and financial liabilities are measured at amortised cost using the effective interest method less any impairment (for financial assets). The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortised cost of a financial Interest revenue or expense is calculated by applying the effective interest rate to the gross carrying amount of a financial asset or amortised cost of a financial liability and recognised in the Statement of Comprehensive Income as a financing income or expense. In the case of loans held from the Department of Health and Social Care, the effective interest rate is the nominal rate of interest charged on the loan. Financial assets measured at fair value through other comprehensive income A financial asset is measured at fair value through other comprehensive income where business model objectives are met by both collecting contractual cash flows and selling financial assets and where the cash flows are solely payments of principal and interest. Movements in the fair value of financial assets in this category are recognised as gains or losses in other comprehensive income except for impairment losses. On de-recognition, cumulative gains and losses previously recognised in other comprehensive income are reclassified from equity to income and expenditure, except where the Trust elected to measure an equity instrument in this category on initial recognition. Financial assets and financial liabilities at fair value through income and expenditure Financial assets measured at fair value through profit or loss are those that are not otherwise measured at amortised cost or at fair value through other comprehensive income. This category also includes financial assets and liabilities acquired principally for the purpose of selling in the short term (held for trading) and derivatives. Derivatives which are embedded in other contracts, but which are separable from the host contract are measured within this category. Movements in the fair value of financial assets and liabilities in this category are recognised as gains or losses in the Statement of Comprehensive Income. Impairment of financial assets Page 24

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For all financial assets measured at amortised cost including lease receivables, contract receivables and contract assets or assets measured at fair value through other comprehensive income, the Trust recognises an allowance for expected credit losses.

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Notes to the Accounts Note 1. Accounting policies and other information (continued) The Trust adopts the simplified approach to impairment for contract and other receivables, contract assets and lease receivables, measuring expected losses as at an amount equal to lifetime expected losses. For other financial assets, the loss allowance is initially measured at an amount equal to a 12 month expected credit losses (stage 1) and subsequently at an amount equal to lifetime expected credit loss if the credit risk assessed for the financial asset significantly increases (stage 2). All outstanding non-NHS receivables over one year old are included in the credit loss allowance. Any receivable relating to prescription charges that are over six months old plus any receivable where the trust considers there to be a high risk of being uncollectable are included. The amount included for Injury Cost Recovery receivables follows the DHSC GAM guidance (an allowance of 22.43% of outstanding receivables is included - was previously 21.79% in 2019/20). For financial assets that have become credit impaired since initial recognition (stage 3), expected credit losses at the reporting date are measured as the difference between the asset’s gross carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. Expected losses are charged to operating expenditure within the Statement of Comprehensive Income and reduce the net carrying value of the financial asset in the Statement of Financial Position. Note 1.11.3 De-recognition Financial assets are de-recognised when the contractual rights to receive cash flows from the assets have expired or the Trust has transferred substantially all the risks and rewards of ownership. Financial liabilities are de-recognised when the obligation is discharged, cancelled or expires. Note 1.12 Leases Leases are classified as finance leases when substantially all the risks and rewards of ownership are transferred to the lessee. All other leases are classified as operating leases. The trust as Lessee Finance leases Where substantially all risks and rewards of ownership of a leased asset are borne by the trust, the asset is recorded as property, plant and equipment and a corresponding liability is recorded. The value at which both are recognised is the lower of the fair value of the asset or the present value of the minimum lease payments, discounted using the interest rate implicit in the lease. The implicit interest rate is that which produces a constant periodic rate of interest on the outstanding liability.

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The asset and liability are recognised at the commencement of the lease. Thereafter the asset is accounted as an item of property plant and equipment. The annual rental charge is split between the repayment of the liability and a finance cost so as to achieve a constant rate of finance over the life of the lease. The annual finance cost is charged to finance costs in the Statement of Comprehensive Income.

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Notes to the Accounts Note 1. Accounting policies and other information (continued) Note 1.12.1 The Trust as lessee Operating leases Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease incentives are recognised initially as a liability and subsequently as a reduction of rentals on a straight-line basis over the lease term. Contingent rentals are recognised as an expense in the period in which they are incurred. Leases of land and buildings Where a lease is for land and buildings, the land component is separated from the building component and the classification for each is assessed separately. Note 1.12.2 The trust as lessor Finance leases Amounts due from lessees under finance leases are recorded as receivables at the amount of the trust's net investment in the leases. Finance lease income is allocated to accounting periods to reflect a constant periodic rate of return on the Trust's net investment outstanding in respect of the leases. Operating lease Rental income from operating leases is recognised on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised as an expense on a straight-line basis over the lease term. Note 1.13 Provisions The trust recognises a provision where it has a present legal or constructive obligation of uncertain timing or amount; for which it is probable that there will be a future outflow of cash or other resources; and a reliable estimate can be made of the amount. The amount recognised in the statement of financial position is the best estimate of the resources required to settle the obligation. Where the effect of the time value of money is significant, the estimated risk-adjusted cash flows are discounted using the discount rates published and mandated by HM Treasury. The discounted rate used by the trust for early retirements is minus 0.95% in real terms (2019/20 rate was minus 0.50%). Clinical negligence costs NHS Resolution operates a risk pooling scheme under which the trust pays an annual contribution to NHS Resolution, which, in return, settles all clinical negligence claims. Although NHS Resolution is administratively responsible for all clinical negligence cases, the legal liability remains with the trust. The total value of clinical negligence provisions carried by NHS Resolution on behalf of the trust is disclosed at note 25 but is not recognised in the trust’s accounts. Non-clinical risk pooling

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The trust participates in the property expenses scheme and the liabilities to third parties Scheme. Both are risk pooling schemes under which the trust pays an annual contribution to NHS Resolution and in return receives assistance with the costs of claims arising. The annual membership contributions, and any excesses payable in respect of particular claims are charged to operating expenses when the liability arises.

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Notes to the Accounts Note 1. Accounting policies and other information (continued) Note 1.14 Contingencies Contingent assets (that is, assets arising from past events whose existence will only be confirmed by one or more future events not wholly within the entity’s control) are not recognised as assets, but are disclosed in note 26 where an inflow of economic benefits Contingent liabilities are not recognised, but are disclosed in note 26, unless the probability of a transfer of economic benefits is remote. Contingent liabilities are defined as: • possible obligations arising from past events whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the entity’s or obligations arising from past events but for which it is not probable that a •control; present transfer of economic benefits will arise or for which the amount of the obligation cannot be measured with sufficient reliability. Note 1.15 Public Dividend Capital Public Dividend Capital (PDC) is a type of public sector equity finance based on the excess of assets over liabilities at the time of establishment of the predecessor NHS organisation. HM Treasury has determined that PDC is not a financial instrument within the meaning of IAS 32. The Secretary of State can issue new PDC to, and require repayments of PDC from, the Trust. PDC is recorded at the value received. A charge, reflecting the cost of capital utilised by the trust, is payable as public dividend capital dividend. The charge is calculated at the rate set by HM Treasury (currently 3.5%) on the average relevant net assets of the Trust during the financial year. Relevant net assets are calculated as the value of all assets less the value of all liabilities, with certain additions and deductions as defined in the PDC dividend policy issued by the Department of Health and Social Care. This policy is available at https://www.gov.uk/government/publications/guidance-on-financing-available-to-nhstrusts-and-foundation-trusts. In accordance with the requirements laid down by the Department of Health and Social Care (as the issuer of PDC), the dividend for the year is calculated on the actual average relevant net assets as set out in the “pre-audit” version of the annual accounts. The dividend calculated is not revised should any adjustment to net assets occur as a result Note 1.16 Value Added Tax (VAT) Most of the activities of the trust are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are Note 1.17 Climate change levy Expenditure on the climate change levy is recognised in the Statement of Comprehensive Income as incurred, based on the prevailing chargeable rates for energy consumption. Note 1.18 Foreign exchange Page 27

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

The functional and presentational currency of the trust is sterling. A transaction which is denominated in a foreign currency is translated into the functional currency at the spot exchange rate on the date of the transaction.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Notes to the Accounts Note 1. Accounting policies and other information (continued) Note 1.18 Foreign exchange (continued) Where the trust has assets or liabilities denominated in a foreign currency at the Statement of financial position date: • monetary items are translated at the spot exchange rate on 31 March • non-monetary assets and liabilities measured at historical cost are translated using the spot exchange rate at the date of the transaction and • non-monetary assets and liabilities measured at fair value are translated using the spot exchange rate at the date the fair value was determined. Exchange gains or losses on monetary items (arising on settlement of the transaction or on re-translation at the statement of financial position date) are recognised in income or expense in the period in which they arise. Exchange gains or losses on non-monetary assets and liabilities are recognised in the same manner as other gains and losses on these items. Note 1.19 Third party assets Assets belonging to third parties (such as money held on behalf of patients) are not recognised in the accounts since the Trust has no beneficial interest in them. However, they are disclosed in a separate note to the accounts in accordance with the requirements of HM Treasury’s FReM. Note 1.20 Losses and special payments Losses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments. They are divided into different categories, which govern the way that individual cases are handled. Losses and special payments are charged to the relevant functional headings in expenditure on an accruals basis. The losses and special payments note is compiled directly from the losses and compensations register which reports on an accrual basis with the exception of provisions Note 1.21 Gifts Gifts are items that are voluntarily donated, with no preconditions and without the expectation of any return. Gifts include all transactions economically equivalent to free and unremunerated transfers, such as the loan of an asset for its expected useful life, and the sale or lease of assets at below market value. Note 1.22 Early adoption of standards, amendments and interpretations No new accounting standards or revisions to existing standards have been early adopted in 2020/21.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Notes to the Accounts Note 1. Accounting policies and other information (continued) Note 1.23 Standards, amendments and interpretations in issue but not yet effective or adopted In light of COVID-19 pressures, HM Treasury and the Financial Reporting Advisory Board (FRAB) have decided that IFRS 16 implementation in the public sector will be deferred until 2021/22. Note 1.24 Early adoption of standards, amendments and interpretations No new accounting standards or revisions to existing standards have been early adopted in 2020/21.

Note 1.25 Standards, amendments and interpretations in issue but not yet effective or adopted IFRS 16 Leases IFRS 16 Leases will replace IAS 17 Leases, IFRIC 4 Determining whether an arrangement contains a lease and other interpretations and is applicable in the public sector for periods beginning 1 April 2022. The standard provides a single accounting model for lessees, recognising a right of use asset and obligation in the statement of financial position for most leases: some leases are exempt through application of practical expedients explained below. For those recognised in the statement of financial position the standard also requires the remeasurement of lease liabilities in specific circumstances after the commencement of the lease term. For lessors, the distinction between operating and finance leases will remain and the accounting will be largely unchanged. IFRS 16 changes the definition of a lease compared to IAS 17 and IFRIC 4. The trust will apply this definition to new leases only and will grandfather its assessments made under the old standards of whether existing contracts contain a lease.

On transition to IFRS 16 on 1 April 2022, the trust will apply the standard retrospectively with the cumulative effect of initially applying the standard recognised in the income and expenditure reserve at that date. For existing operating leases with a remaining lease term of more than 12 months and an underlying asset value of at least £5,000, a lease liability will be recognised equal to the value of remaining lease payments discounted on transition at the trust’s incremental borrowing rate. The Trust's incremental borrowing rate will be defined by HM Treasury. Currently this rate is 0.91% but this may change between now and adoption of the standard. The related right of use asset will be measured equal to the lease liability adjusted for any prepaid or accrued lease payments. For existing peppercorn leases not classified as finance leases, a right of use asset will be measured at current value in existing use or fair value. The difference between the asset value and the calculated lease liability will be recognised in the income and expenditure reserve on transition. No adjustments will be made on 1 April 2022 for existing finance leases.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

For leases commencing in 2022/23, the trust will not recognise a right of use asset or lease liability for short term leases (less than or equal to 12 months) or for leases of low value assets (less than £5,000). Right of use assets will be subsequently measured on a basis consistent with owned assets and depreciated over the length of the lease term.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 1.25 Standards, amendments and interpretations in issue but not yet effective or adopted (cont.) The Trust has estimated the impact of applying IFRS 16 in 2022/23 on the opening statement of financial position and the in-year impact on the statement of comprehensive income and capital additions as follows: £000's Estimated impact on 1 April 2022 statement of financial Additional right of use assets recognised for existing operating Net impact on net assets on 1 April 2022

18,492 18,492

Estimated in-year impact in 2022/23 Additional depreciation on right of use assets Additional finance costs on lease liabilities Lease rentals no longer charged to operating expenditure Estimated impact on surplus / deficit in 2022/23

(1,450) (216) 1,484 (182)

Note 2. Operating Segments The nature of the Trust's services is the provision of healthcare. Similar methods are used to provide services across locations, since all policies, procedures and governance arrangements are Trust wide. As a Trust, all services are subject to the same regulatory environment and standards set out by our external performance managers. Accordingly the Trust operates one segment. Note 3. Operating income from patient care activities All income from patient care activities relates to contract income recognised in line with accounting policy 1.4. 2020/21 2019/20 Note 3.1 Income from patient care activities (by nature) £000's £000's Acute Services Block contract / system envelope income* High cost drugs income from commissioners (excluding passthrough costs) Other NHS clinical income All services Private patient income Additional pension contribution central funding** Other clinical income Total patient income from activities

255,169

222,400

1,631 1,923

14,077 912

175 7,061 1,876 267,835

290 6,440 2,628 246,747

*As part of the COVID pandemic response, transaction flows were simplified in the NHS and providers and their commissioners moved onto block contract payments at the start of 2020/21. In the second half of the year, a revised financial framework built on these arrangements but with a greater focus on system partnership and providers derived most of their income from these system envelopes. Comparatives in this note are presented to be comparable with the current year activity. This does not reflect the contracting and payment mechanisms in place during the prior year.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

**The employer contribution rate for NHS pensions increased from 14.3% to 20.6% (excluding administration charge) from 1 April 2019. Since 2019/20, NHS providers have continued to pay over contributions at the former rate with the additional amount being paid over by NHS England on providers' behalf. The full cost and related funding have been recognised in these accounts.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 3.2 Income from patient care activities (by source) Income from patient care activities received from:

2020/21 £000's

2019/20 £000's

NHS England Clinical commissioning groups Department of Health and Social Care Other NHS providers NHS other Local authorities Non-NHS: private patients Non-NHS: overseas patients (chargeable to patient) Injury cost recovery scheme Total income from activities

29,662 236,425 22 955 1 175 100 495 267,835

29,937 215,150 27 490 103 19 290 93 638 246,747

Note 3.3 Overseas visitors (relating to patients charged directly by the provider) 2020/21 2019/20 £000's £000's Income recognised this year Cash payments received in-year Amounts added to provision for impairment of receivables Amounts written off in-year

100 92 199 1

93 43 38 1

2020/21 £000's

2019/20 £000's

543 7,644 2,782 27,454 1,318

632 6,772 2,706 5,787 21,829 548

1,857 4,888 801 47,287

98 101 41,744

Note 4. Other operating income

Other operating income from contracts with customers Research and development Education and training Non-patient care services to other bodies Provider sustainability fund (2019/20 only) Financial recovery fund (2019/20 only) Marginal rate emergency tariff funding (2019/20 only) Reimbursement and top up funding Other income Other non-contract operating income Receipt of capital grants and donations Charitable and other contributions to expenditure Rental revenue from operating leases Total other operating income

3,271

Note 5. Additional information on contract revenue (IFRS 15) recognised in the period 2020/21 2019/20 £000's £000's Revenue recognised in the reporting period that was included within contract liabilities at the previous period end 613 656

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

n the period

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 6. Operating expenses

Purchase of healthcare from NHS and DHSC bodies Purchase of healthcare from non-NHS and non-DHSC Staff and executive directors costs Remuneration of non-executive directors Supplies and services - clinical (excluding drugs costs) Supplies and services - general Drug costs (drugs inventory consumed and purchase of noninventory drugs) Consultancy and professional services Establishment Premises Transport (including patient travel) Depreciation on property, plant and equipment Amortisation on intangible assets Net impairments Movement in credit loss allowance: contract receivables / contract assets Change in provisions discount rate Audit fees payable to the external auditor audit services - statutory audit Internal audit costs Clinical negligence Legal fees Insurance Education and training Rentals under operating leases Redundancy Car parking & security Hospitality Losses, ex gratia & special payments Other external services Other Total

2020/21 £000's

2019/20 £000's

2,426 4,768 203,722 114 22,152 3,133

4,741 3,880 193,119 94 19,864 3,395

21,087 3,419 2,249 14,219 652 8,520 1,931 341

20,189 3,532 1,618 10,328 816 7,494 1,891 -

526 5

158 7

138 89 13,010 382 165 710 2,624 35 802 12 297 199 377 308,104

73 104 9,924 416 117 741 2,292 11 459 1 73 276 435 286,048

During 2020/21 some items of operating expenditure were impacted by the response to COVID-19. For some items of expenses this led to comparative increases in expenditure and in some cases expenditure reduced when compared to 2019/20. Limitation on auditor's liability The limitation on auditor's liability for external audit work is £2 million (2019/20: £2

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 7. Impairment of assets 2020/21 £000's

2019/20 £000's

Net impairments charged to operating surplus Changes in market price Total net impairments charged to operating surplus

341 341

Impairments charged to the revaluation reserve Total net impairments

18,748 19,089

Salaries and wages Social security costs Apprenticeship levy Employer's contributions to NHS pensions Pension cost - other Temporary staff (including agency) Total gross staff costs

2020/21 £000's 136,950 12,456 606 23,171 36 33,141 206,360

2019/20 £000's 124,956 12,319 605 21,144 35 35,865 194,924

Total staff costs

206,360

194,924

2,603

1,794

35 203,722

11 193,119

Note 8. Employee benefits

Of which, included above Costs capitalised as part of assets Redundancy Total staff and executive directors costs

Note 8.1 Retirements due to ill-health During 2020/21 there were three retirements from the trust agreed on the grounds of ill-health (three in 2019/20). The estimated additional pension liabilities of these illhealth retirements is £147k (£151k in 2019/20). These estimated costs are calculated on an average basis and will be borne by the NHS Pension Scheme. Note 9. Pension costs Past and present employees are covered by the provisions of the two NHS Pension Schemes. Details of the benefits payable and rules of the Schemes can be found on the NHS Pensions website at www.nhsbsa.nhs.uk/pensions. Both are unfunded defined benefit schemes that cover NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State for Health and Social Care in England and Wales. They are not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, each scheme is accounted for as if it were a defined contribution scheme: the cost to the NHS body of participating in each scheme is taken as equal to the contributions payable to that scheme for the accounting period.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 9. Pension costs (continued) In order that the defined benefit obligations recognised in the financial statements do not differ materially from those that would be determined at the reporting date by a formal actuarial valuation, the FReM requires that “the period between formal valuations shall be four years, with approximate assessments in intervening years”. An outline of these a) Accounting valuation A valuation of scheme liability is carried out annually by the scheme actuary (currently the Government Actuary’s Department) as at the end of the reporting period. This utilises an actuarial assessment for the previous accounting period in conjunction with updated membership and financial data for the current reporting period, and is accepted as providing suitably robust figures for financial reporting purposes. The valuation of the scheme liability as at 31 March 2021, is based on valuation data as 31 March 2020, updated to 31 March 2021 with summary global member and accounting data. In undertaking this actuarial assessment, the methodology prescribed in IAS 19, relevant FReM interpretations, and the discount rate prescribed by HM Treasury have also been The latest assessment of the liabilities of the scheme is contained in the report of the scheme actuary, which forms part of the annual NHS Pension Scheme Accounts. These accounts can be viewed on the NHS Pensions website and are published annually. Copies can also be obtained from The Stationery Office. b) Full actuarial (funding) valuation The purpose of this valuation is to assess the level of liability in respect of the benefits due under the schemes (taking into account recent demographic experience), and to recommend contribution rates payable by employees and employers. The latest actuarial valuation undertaken for the NHS Pension Scheme was completed as at 31 March 2016. The results of this valuation set the employer contribution rate payable from April 2019 to 20.6% of pensionable pay. The 2016 funding valuation was also expected to test the cost of the Scheme relative to the employer cost cap that was set following the 2012 valuation. In January 2019, the Government announced a pause to the cost control element of the 2016 valuations, due to the uncertainty around member benefits caused by the discrimination ruling relating to the McCloud case. The Government subsequently announced in July 2020 that the pause had been lifted, and so the cost control element of the 2016 valuations could be completed. The Government has set out that the costs of remedy of the discrimination will be included in this process. HMT valuation directions will set out the technical detail of how the costs of remedy will be included in the valuation process. The Government has also confirmed that the Government Actuary is reviewing the cost control mechanism (as was originally announced in 2018). The review will assess whether the cost control mechanism is working in line with original government objectives and reported to Government in April 2021. The findings of this review will not impact the 2016 valuations, with the aim for any changes to the cost cap mechanism to be made in time for the completion of the 2020 NEST Pension Scheme Where staff are not eligible for, or choose to opt out of, the NHS Pensions Scheme, they are entitled to join the National Employment Savings Trust (NEST) scheme. Page 34

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

NEST is a government-backed, defined contribution pension scheme set up to make sure that every employer can easily access a workplace pension scheme. The employer's contribution rate in 2020/21 was 3% (2019/20: 3%)

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 10. Operating leases Note 10.1 The trust as a lessor This note discloses income generated in operating lease agreements where the Trust is the lessor.

Operating lease revenue Minimum lease receipts Total

Future minimum lease receipts due: - not later than one year; - later than one year and not later than five years; - later than five years. Total

2020/21 £000's

2019/20 £000's

801 801

101 101

31 March 2021 £000's

31 March 2020 £000's

311 247 146 704

101 247 146 494

Note 10.2 The Princess Alexandra Hospital NHS Trust as a lessee This note discloses costs and commitments incurred in operating lease arrangements where The Princess Alexandra Hospital NHS Trust is the lessee.

Operating lease expense Minimum lease payments Total

Future minimum lease payments due: - not later than one year; - later than one year and not later than five years; - later than five years. Total

2020/21 £000's

2019/20 £000's

2,624 2,624

2,292 2,292

31 March 2021 £000's

31 March 2020 £000's

1,881 6,381 8,606 16,868

2,089 6,942 9,320 18,351

Note 11. Finance income Finance income represents interest received on assets and investments in the period. 2020/21 2019/20 £000's £000's Interest on bank accounts Total finance income

Page 35

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 12. Finance expenditure Finance expenditure represents interest and other charges involved in the borrowing of money or asset financing. 2020/21 2019/20 £000's £000's Interest expense: Loans from the Department of Health 2,019 Total interest expense 2,019 Unwinding of discount on provisions Other finance costs Total finance costs

(7) 25 18

2 11 2,032

Note 12.1 The late payment of commercial debts (interest) Act 1998 / Public Contract Regulations 2015 There were nil interest charges on late payments in 2020/21 (nil in 2019/20) Note 13. Other gains / (losses) There were no gains or losses from disposals of assets in 2020/21 (nil in 2019/20) Note 14.1 Intangible assets - 2020/21

Internally Development generated expenditure information technology

Total

£000's

Valuation / gross cost at 1 April 2020 116 Additions 1,467 Valuation / gross cost at 31 March 2021 1,583

15,295 15,295

15,411 1,467 16,878

Amortisation at 1 April 2020 Provided during the year Amortisation at 31 March 2021

36 3 39

7,742 1,928 9,670

7,778 1,931 9,709

Net book value at 31 March 2021 Net book value at 1 April 2020 Note 14.2 Intangible assets - 2019/20 Note 14.2 Intangible assets - 2019/20

1,544 80

5,625 7,553

7,169 7,633

Internally Development generated expenditure information technology

Total

£000's

Valuation / gross cost at 1 April 2019 48 Additions 68 Valuation / gross cost at 31 March 2020 116

14,860 435 15,295

14,908 503 15,411

Amortisation at 1 April 2019 Provided during the year Amortisation at 31 March 2020

5,866 1,876 7,742

5,887 1,891 7,778

21 15 36 Page 36

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Net book value at 31 March 2020 Net book value at 1 April 2019

80 27

Page 36

7,553 8,994

7,633 9,021

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 15.1 Property, plant and equipment - Land 2020/21

Valuation/gross cost at 1 April 2020 Additions Impairments Reclassifications Valuation/gross cost at 31 March 2021

Assets under construction

Plant and machinery

Transport equipment

Information technology

Furniture and fittings

Total

£000's

Buildings excluding dwellings £000's

£000's

8,150

80,176

11,637

28,028

279

21,480

1,169

150,919

9,762 (19,089) 17,340

25,018 -

9,064 (17,404)

4,169 -

36 -

48,049 (19,089) -

8,150

88,189

36,655

19,688

343

25,649

1,205

179,879

569

19,701

109

12,011

1,124

33,514

Accumulated depreciation at 1 April 2020 Provided during the year

3,192

2,243

3,046

8,520

Accumulated depreciation at 31 March 2021 -

3,761

21,944

136

15,057

1,136

42,034

Net book value at 31 March 2021 Net book value at 1 April 2020

84,428 79,607

36,655 11,637

(2,256) 8,327

207 170

10,592 9,469

69 45

137,845 117,405

Assets under construction

Plant and machinery

Transport equipment

Information technology

Furniture and fittings

Total

£000's

Buildings excluding dwellings £000's

£000's

8,150

80,445

1,849

26,520

18,068

1,169

136,277

1,772 (2,107) 66 -

9,854 (66) -

1,739 (71) (160)

132 71 -

3,412 -

16,909 (2,107) (160)

8,150

80,176

11,637

28,028

279

21,480

1,169

150,919

535

17,783

9,440

1,114

28,900

2,754 (2,720) -

2,149 (71) (160)

10 71 -

2,571 -

10 -

7,494 (2,720) (160)

Accumulated depreciation at 31 March 2020 -

569

19,701

109

12,011

1,124

33,514

Net book value at 31 March 2020 Net book value at 1 April 2019

79,607 79,910

11,637 1,849

8,327 8,737

170 48

9,469 8,628

45 55

117,405 107,377

8,150 8,150

Note 15.2 Property, plant and equipment - Land 2019/20

Valuation / gross cost at 1 April 2019 Additions Revaluations Reclassifications Disposals / derecognition Valuation/gross cost at 31 March 2020

Accumulated depreciation at 1 April 2019 - as previously stated Provided during the year Revaluations Reclassifications Disposals / derecognition

8,150 8,150

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 16.3 Property, plant and equipment financing - 2020/21 Buildings excluding Land dwellings £000's £000's Net book value at 31 March 2021 Owned - purchased 8,150 84,428 Finance leased Owned - donated/granted NBV total at 31 March 2021

8,150

84,428

Assets under Plant and construction machinery £000's £000's

Transport equipment £000's

Information technology £000's

Furniture and fittings £000's

Total £000's

19,251 -

13,071 71 2,070

143 -

10,592 -

69 -

135,704 71 2,070

19,251

15,212

143

10,592

137,845

Note 16.4 Property, plant and equipment financing - 2019/20 Buildings excluding dwellings £000's

Assets under Plant and construction machinery £000's £000's

Transport equipment £000's

Information technology £000's

Furniture and fittings £000's

Total £000's

Net book value at 31 March 2020 Owned - purchased 8,150 Finance leased Owned - donated/granted -

79,607 -

11,637 -

8,110 83 134

170 -

9,469 -

45 -

117,188 83 134

NBV total at 31 March 2020

79,607

11,637

8,327

170

9,469

117,405

Land £000's

8,150

Note 16.4 Donations of property, plant and equipment The Trust did not receive any donated assets from The PAH NHS Trust Charitable Fund (Registered Charity No 10547745) during 2020/21 (2019/20 £98k). Note 16.5 Revaluations of property, plant and equipment The trust has undertaken a revaluation of land and buildings as at 31 March 2021 (see note 1.7.2). This work was performed by Mr Giles Awford BSc (Hons) MRICS, Principal Surveyor, District Valuer Services (DVS), the specialist property arm of the Valuation Office Agency (VOA). The valuation has been undertaken in accordance with International Finance Reporting Standard (IFRS) as interpreted by the HM Financial Reporting Manual (FReM) compliant with the DHSC Group Manual for Accounts (DHSC GAM). The valuation approach continues to adopt the Modern Equivalent Asset (MEA) concept. DHSC guidance specifies that land and buildings should be valued on the basis of depreciated replacement cost, applying the MEA concept. MEA is defined as 'the cost of a modern replacement asset that has the same productive capacity as the property being valued'. Therefore MEA is not a valuation of the existing land and buildings that the trust holds but a theoretical valuation for accounting purposes of what the trust could need to spend in order to replace the current

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 17. Inventories

Drugs Consumables Energy Other Total inventories

31 March 2021 £000's

31 March 2020 £000's

1,668 3,983 46 5,697

1,451 3,046 32 36 4,565

Inventories recognised in expenses for the year were £34,467k (2019/20: £31,347k). Write-down of inventories recognised as expenses for the year were £0k (2019/20: £0k). In response to the COVID 19 pandemic, the Department of Health and Social Care centrally procured personal protective equipment and passed these to NHS providers free of charge. During 2020/21 the Trust received £4,888k of items purchased by DHSC, of which £655k was held as stock at 31 March 21. These inventories were recognised as additions to inventory at deemed cost with the corresponding benefit recognised in income. The utilisation of these items is included in the expenses disclosed above. Note 18. Receivables 31 March 2021 £000's

31 March 2020 £000's

Current Contract receivables Allowance for impaired contract receivables / assets Prepayments (non-PFI) Interest receivable PDC dividend receivable VAT receivable Other receivables Total current receivables

6,242 (1,689) 1,725 275 1,655 173 8,381

47,666 (1,193) 1,241 4 1,406 208 49,332

Non-current Contract receivables Other receivables Total non-current receivables

576 613 1,189

692 505 1,197

Of which receivable from NHS and DHSC group bodies: Current Non-current

3,607 613

44,659 505

2020/21 £000's

2019/20 £000's

1,193 555 (29) (30)

1,066 175 (17) (31)

Note 18.1 Allowances for credit losses

Allowances as at 1 April - brought forward New allowances arising Reversals of allowances Utilisation of allowances (write offs) Page 39

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Allowances as at 31 March 2021

1,689

Page 39

1,193

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 19. Cash and cash equivalents movements Cash and cash equivalents comprise cash at bank, in hand and cash equivalents. Cash equivalents are readily convertible investments of known value which are subject to an insignificant risk of change in value. 2020/21 £000's

2019/20 £000's

At 1 April Net change in year

1,144 64,098

1,197 (53)

At 31 March

65,242

1,144

Broken down into: Cash at commercial banks and in hand Cash with the Government Banking Service

12 65,230

22 1,122

Total cash and cash equivalents as in SoFP / SoCF

65,242

1,144

Note 19.1 Third party assets held by the trust The trust held cash and cash equivalents which relate to monies held by the trust on behalf of patients or other parties and in which the trust has no beneficial interest. This has been excluded from the cash and cash equivalents figure reported in the accounts. 2020/21 £000's

2019/20 £000's

18 18

16 16

31 March 2021 £000's

31 March 2020 £000's

Current Trade payables Capital payables Accruals Social security costs Other taxes payable Other payables

7,545 18,407 18,781 2,008 1,719 610

8,598 6,757 9,258 1,863 347 245

Total current trade and other payables

49,070

27,068

Of which payables from NHS and DHSC group bodies: Current

3,562

4,663

Bank balances Total third party assets Note 20. Trade and other payables

Note 20.1 Early retirements in NHS payables above There are no early retirements included in NHS payables (nil in 2019/20)

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 21. Other liabilities 31 March 2021 £000's

31 March 2020 £000's

2,180 2,180

1,158 1,158

31 March 2021 £000's

31 March 2020 £000's

Current Loans from DHSC Obligations under finance leases Total current borrowings

30 30

150,928 30 150,958

Non-current Obligations under finance leases Total non-current borrowings

10 10

40 40

Current Deferred income: contract liabilities Total other current liabilities Note 22. Borrowings

Note 22.1 Reconciliation of liabilities arising from financing activities - 2020/21 Loans £000's

Finance £000's

Total £000's

Carrying value at 1 April 2020

150,928

150,998

Cash movements: Payments and receipts of principal Payments of interest Carrying value at 31 March 2021

(150,467) (461) -

(30) 40

(150,497) (461) 40

As part of the revised 2020/21 financial regime, all outstanding loans were converted to PDC and this has increased average net assets of the Trust. Interest was therefore not payable in 2020/21, but there was dividend payable of £3,034k. Note 22.2 Reconciliation of liabilities arising from financing activities - 2019/20 Loans £000's

Finance £000's

Total £000's

Carrying value at 1 April 2019

124,335

Cash movements: Payments and receipts of principal Payments of interest

26,511 (1,937)

(20) -

26,491 (1,937)

Non-cash movements: Application of effective interest rate Other changes Carrying value at 31 March 2020

2,019 150,928

90 70

2,019 90 150,998

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 23. Finance leases Note 23.1 The trust as a lessee Obligations under finance leases where the Trust is the lessee. 31 March 2021 £000's

31 March 2020 £000's

Gross lease liabilities

of which liabilities are due: not later than one year; later than one year and not later than five years; later than five years. Finance charges allocated to future periods Net lease liabilities

30 10 40

30 41 (1) 70

of which payable: not later than one year; later than one year and not later than five later than five years.

30 10 -

30 40 -

Note 24. Provisions for liabilities and charges analysis Pensions: early departure costs £000's

Legal claims £000's

Other £000's

Total £000's

At 1 April 2020 Change in the discount rate Arising during the year Utilised during the year Reversed unused Unwinding of discount

842 2 1 (70) (240) (4)

302 541 (10) (27) -

809 3 260 (134) (53) (3)

1,953 5 802 (214) (320) (7)

At 31 March 2021

531

806

882

2,219

Expected timing of cash flows: not later than one year; later than one year and not later than five years; later than five years.

806

269

1,142

266 198

613 -

879 198

Total

531

806

882

2,219

Note 25. Clinical negligence liabilities At 31 March 2021 £121.1m was included in provisions of NHS Resolution in respect of clinical negligence liabilities of the Trust (31 March 2020: £107.9m).

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 26. Contingent assets and liabilities

Value of contingent liabilities NHS Resolution legal claims Employment tribunal and other employee related litigation Gross value of contingent liabilities

31 March 2021 £000's

31 March 2020 £000's

(37) (416) (453)

(38) (128) (166)

31 March 2021 £000's

31 March 2020 £000's

9,237 9,237

8,265 8,265

Note 27. Contractual capital commitments

Property, plant and equipment Total Note 28. Financial instruments Note 28.1 Financial risk management

Financial reporting standard IFRS 7 requires disclosure of the role that financial instruments have had during the period in creating or changing the risks a body faces in undertaking activities. Because of the continuing service provider relationship that the trust has with commissioners and the way commissioners are financed, the trust is not exposed to the degree of financial risk faced by business entities. Also financial instruments play a much more limited role in creating or changing risk than would be typical of listed companies, to which financial reporting standards mainly apply.

The trust's cash management operations are undertaken by the finance department within parameters defined formally within the Trust's standing financial instructions and policies agreed by the Board of Directors. The Trust's treasury activity is subject to review by the Trust's internal auditors. Currency risk The Trust is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and sterling based. The Trust has no overseas operations. The trust therefore has low exposure to currency rate fluctuations. Interest rate risk The trust can borrow from the government for capital expenditure, subject to approval from NHS Improvement. The borrowings are for 1-25 years, in line with the life of the associated assets, and interest charges at the national loans fund rate, fixed for the life The Trust can also borrow from the government for revenue support funding, subject to approval form NHS Improvement. Interest rates are confirmed by the lender (Department of Health and Social Care) at the point borrowing is undertaken. The Trust therefore has low exposure to interest rate fluctuations.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 28.1 Financial risk management (continued) Credit risk A majority of the trust's revenue comes from contracts with other public sector bodies, the Trust has low exposure to credit risk. Liquidity risk The trust's operating costs are incurred under contracts with commissioners, which are financed from resources voted annually by Parliament. The Trust mainly funds its capital from internally generated funds. The Trust is therefore not exposed to significant liquidity risks. Note 28.2 Carrying values of financial assets Carrying values of financial assets held at amortised cost

31 March 2021 £000's

31 March 2020 £000's

Trade and other receivables excluding non financial assets 5,915 Cash and cash equivalents 65,242 Total at 31 March 71,157

47,377 1,144 48,521

Note 28.3 Carrying values of financial liabilities Carrying values of financial liabilities held at amortised cost Loans from the Department of Health and Social Care Obligations under finance leases Trade and other payables excluding non financial liabilities Total at 31 March

31 March 2021 £000's

31 March 2020 £000's

40 45,343 45,383

150,928 70 24,858 175,856

Note 28.4 Maturity of financial liabilities The following maturity profile of financial liabilities is based on the contractual

In one year or less In more than one year but not more than five years In more than five years Total

31 March 2021 £000's

31 March 2020 £000's

45,373 10 45,383

175,816 41 175,857

* This disclosure has previously been prepared using discounted cash flows. The comparatives have therefore been restated on an undiscounted basis. Note 28.5 Fair values of financial assets and liabilities

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

The carrying value of financial liabilities is at book value (carrying value) as it is considered that this is a reasonable approximation of fair value.

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 29. Losses and special payments

Losses Cash losses Fruitless payments Bad debts and claims abandoned Stores losses and damage to Total losses

2020/21

2019/20

Total number of Total value cases of cases Number £000's

2 1,133 3

126 30 47

2 31 3

4 32 33

1,138

203

47 15

4 5

9 3

62 265 0

9 45

12 81 0

Special payments Compensation under court order or legally binding arbitration award 8 Ex-gratia payments 14 Total special payments 22 Total losses and special payments 1,160 Compensation payments received

Note 30. Related parties In accordance with IAS 24 and paragraphs 5.179-5.183 of the GAM the trust is required to disclose the main entities within the public sector that the Trust has had dealings with. The Department of Health and Social Care are regarded as a parent department. Related parties include: The Department of Health and Social Care Other NHS Providers CCGs and NHS England NHS West Essex NHS East and North Hertfordshire NHS England NHS Resolution NHS Business Service Authority Other Health Bodies and Government Departments HM Revenue and Customs NHS Blood and Transplant Service NHS Professionals NHS Pensions Agency NHS England and NHS Improvement Health Education England NHS Property Services Local Authorities

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 30. Related parties (continued) All Board members and the most senior managers of the trust with key controlling influence have been requested to confirm any material related party transactions, including any transactions of close family members. The trust also maintains a hospitality and declaration of interest register.

Name of related party

Name of trust employee

Title of trust employee

Expenditure with related party £000's

Income from related party £000's

Amounts owed to related £000's

Amounts due from related £000's

Addenbrooke's Charitable Trust Anglia Ruskin University

Helen Howe

Associate nonTrustee executive director Non-executive director Governor

145

142

Anglia Ruskin University

142

Holly House Hospital

James McLeish Director of quality Family member 145 improvement an employee Ahmed Soliman Associate medical Specialist clinical 163 director - urgent care advisor John Hogan Non-executive director Private practice 55

St Clare Hospice

Monica Bose

University of Suffolk

Steve Clarke

329

503

404

339

Care Quality Commission

East of England Ambulance Service Barts Health NHS Trust

John Keddie

Consultant gastroenterologist Chairman

Relationship with related party

Trustee

Independent director James McLeish Director of quality Family member improvement an employee John Hogan Non-Executive Director Consultant cardiologist

The Princess Alexandra Hospital NHS Trust charitable funds (Registered Charity 10547745). The trust receives revenue and capital payments from this charity and certain trustees are also members of the trust board. The charity's objective is to provide support both generally and in certain areas of the trust's activities. During the year the charity contributed £235k (unaudited) to the trust (2019/20 £286k).

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 31. Prior period adjustments There have been no prior period adjustments with IAS8 that has required restatement of comparative information due to either changes in accounting policy or material prior period error. Note 32. Events after the reporting date The Trust has no other adjusting events after the end of the reporting period. The Accounts were approved by the Board of Directors on 11 June 2021. Note 33. Better payment practice code 2020/21 Non-NHS Payables Number Total non-NHS trade invoices paid in the year 45,928 Total non-NHS trade invoices paid within 39,957 Percentage of non-NHS trade invoices paid within target 87.0% NHS Payables Total NHS trade invoices paid in the year Total NHS trade invoices paid within target Percentage of NHS trade invoices paid within target

2020/21 £000's 109,532 92,948

2019/20 2019/20 Number £000's 49,002 76,083 43,722 64,320

84.9%

89.2%

84.5%

2,296 1,912

53,313 48,878

2,227 1,805

56,446 47,379

83.3%

91.7%

81.1%

83.9%

The Better Payment Practice code requires the NHS body to aim to pay all valid invoices by the due date or within 30 days of receipt of valid invoice, whichever is later. Note 34. External financing limit The Trust is given an external financing limit against which it is permitted to underspend 2020/21 £000's

2019/20 £000's

External financing limit (EFL)

(27,899)

30,083

Cashflow financing

(27,899)

29,489

594

(447) 147

Unadjusted EFL Adjusted financial performance (management control total CT Scanner funding deferred to 20/21 included in 19/20 limit Underspend against EFL

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The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 35. Capital resource limit 2020/21 £000's

2019/20 £000's

Charge against capital resource limit

49,516 (1,857) 47,659

17,412 (98) 17,314

Capital Resource Limit Unadjusted CRL

47,659 -

17,721 407

(447) 509 469

Control Target

Actual Outturn

Underspend

£000's

Net Control Total - 2020/21

(391)

1,816

2,207

Net Control Total - 2019/20

(6,168)

6,218

Gross capital expenditure Less: Donated and granted capital additions

Adjusted financial performance (management control total) CT scanner funding deferred to 2020/21 included in 2019/20 limit COVID CRL support for 2019/20 adjusted in 2020/21 Underspend against CRL Note 36. Breakeven duty and financial performance Note 36.1 Breakeven duty by control total

Note 36.2 Breakeven duty financial performance 2020/21 £000's Adjusted financial performance surplus (control total basis) Breakeven duty financial performance surplus

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1,816 1,816

The Princess Alexandra Hospital NHS Trust Annual Accounts 2020/21

Note 36.3. Breakeven duty rolling assessment

Breakeven duty in-year financial performance Breakeven duty cumulative position Operating income Cumulative breakeven position as a percentage of operating income

1997/98 £000's

2009/10 £000's

2010/11 £000's

2011/12 £000's

2012/13 £000's

2013/14 £000's

2014/15 £000's

1,536

511 2,047 172,171

415 2,462 179,388

461 2,923 180,790

122 3,045 184,568

(16,403) (13,358) 177,739

(21,998) (35,356) 190,478

1.19%

1.37%

1.62%

1.65%

-7.52%

-18.56%

2015/16 £000's

2016/17 £000's

2017/18 £000's

2018/19 £000's

2019/20 £000's

2020/21 £000's

Breakeven duty in-year financial performance Breakeven duty cumulative position Operating income Cumulative breakeven position as a percentage of operating income

(37,714) (26,715) (28,435) (16,542) 418 1,816 (73,070) (99,785) (128,220) (144,762) (144,344) (142,528) 196,124 209,742 213,231 236,700 288,491 315,122 -37.26%

-47.58%

-60.13%

-61.16%

-50.03%

-45.23%

The amounts in the above tables in respect of 2005/06 to 2008/09 inclusive have not been restated to IFRS and remain on a UK GAAP basis.

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