Nursing

1
Nursing Midwifery Workload and Workforce
Planning

• Nursing and Midwifery Budgets/Financial Management

2
Budget Management Overview

• budget allocation based on a similar process
  throughout Scotland but open to variation
• agreed within the overall management process
• process is generally the same
• Board to operating division level
• operating division level to services
• two principal budget setting methodologies
  applied in practice
• Incremental budgets
• Zero-based budgets (ZBB)

3
Incremental Budgets

• baseline from the previous years budget is
  brought forward and is adjusted for a variety of
  factors, including
• anticipated salary inflation, including pay
  awards and incremental drift, e.g. agreed changes
  to the establishment, measured in WTEs
• non-recurring initiatives, either existing ones
  ceasing or new ones commencing
• full year effect of recurring items introduced
  part way through the previous year
• agreed new service pressures identified through
  the healthcare planning and prioritisation
  process
• any agreed savings

4
Zero-based Budgets

• sometimes set, particularly where higher unit
  cost and lower, more easily estimated staffing
  numbers are involved
• process starts from scratch, building up the
  budget on an individual post basis
• culminates in a more realistic cost profile,
  based on upto-date knowledge and information
• not recommended where
• large numbers of staff involved
• staff turnover rates throughout the year are high

5
Components of a Budget

• depends on the level and extent of devolved
  responsibility delegated to the budget manager
• in practice, the key components of a ward budget
  will include
• permanent nurse staffing WTE and costs
• internal bank WTE and costs
• agency WTE and costs

6
Components of a Budget

• will hold statistical and financial information
  for staff on an individual administrative grade
  basis, including
• clerical support staff WTE and costs
• drugs costs, possibly by grouping, e.g. cancer,
  or by individual drug, where the cost is likely
  to be significant and measurable
• medical supplies, either by grouping, e.g.
  disposables, or by individual product, e.g.
  needles

7
Interpreting a Budget

• standard approach is to report against each cost
  heading as follows
• annual budget a guide to the total estimated
  cost for the year
• year-to-date budget how much of the total should
  have been spent so far
• year-to-date actual how much has been spent to
  date
• year-to-date variance the difference between the
  budget and the actual. A positive variance
  would generally mean that spend is lower than
  budget, while an adverse variance would signify
  that more has been spent to date than has been
  allowed for in the budget

8
Reviewing Variances

• a key interpretation method is variance
  analysis where budget variances are reviewed to
  determine whether they are significant, temporary
  or perhaps the start of a trend of some sort.
  Some questions to be asked in reviewing variances
  include
• has the budget been phased correctly? The
  variance may simply reflect a timing difference
  that will disappear over time
• are the actual costs recorded accurate or is some
  information missing or have costs been allocated
  to the incorrect cost centre? This needs to be
  investigated by finance colleagues

9
Reviewing Variances (2)

• is a positive variance really a good thing or
  does it reflect the fact that staff recruitment
  is proving difficult and staff on the ground are
  under undue pressure of work as a result?
• is an adverse variance the start of a trend that
  requires remedial action to fix or is it due to a
  one-off, unexpected charge that will not repeat
  in the year?

10
Forecasting Financial Performance

• forecasts will change from month to month due to
  many factors
• staff turnover
• unexpected activity
• new drugs
• an expensive to treat patient suddenly and
  unexpectedly referred
• unavoidable employment of agency staff
• forecasts should become more reliable as the year
  progresses
• forecast may indicate an overspend, underspend or
  break even situation where actual spend for the
  year is estimated to closely match budget