Preparing for the future

Advisory and assurance services for the public healthcare sector

2 Advisory and assurance services for the public healthcare sector

Welcome

Grant Thornton is proud to work with public sector healthcare organisations, providing a full range of integrated compliance and advisory services to enable our clients to be prepared for the future.

As a sector driven by the regulatory environment, commissioners and providers are implementing significant change programmes. Improving the quality of care, retaining staff, controlling labour costs and managing property and investment in infrastructure are all issues for healthcare organisations.

Foundation trusts (FTs) are now looking at investment opportunities, while the remaining NHS trusts are facing increasing pressures to meet the standards of a successful FT application process.

We have a specialist team dedicated to providing robust financial and operational support to our clients, enabling them to focus on facing significant challenges in implementing policies and delivering improved patient care. Our commitment to the sector is recognised by winning the ‘HealthInvestor Adviser of the Year’ award in 2009 and 2010 and the ‘Best Adviser’ award at the LIFT Awards Dinner in 2008 and 2010. We provide thought leadership and topical financial updates on a regular basis. We are also a corporate partner of the Healthcare Financial Management Association, regularly contributing to HFMA conference and training activities, and speaking on issues impacting the sector at both a national and regional level.

The next few pages demonstrate the breadth of advice that we can offer including assurance, tax and a range of financial advisory services.

If you would like further information on how we can assist you, please contact one of our sector specialists, whose details are provided on the back cover.

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Grant Thornton’s commitment to the healthcare sector

Grant Thornton UK LLP is a leading business and financial adviser with client-facing offices in 24 locations nationwide. Led by over 200 partners and employing nearly 4,000 professionals, we strive to deliver unparalleled service standards and tailor-made solutions to over 40,000 corporate, public sector and individual clients.

Our NHS clients include acute and mental health trusts, foundation trusts, strategic health authorities, PCTs and GPs. We have a strong reputation as auditors and financial advisers, where our work is consistently focused on delivering specific practical, solution-led services in response to clients’ needs.

Our services to the public healthcare sector

Regulatory requirements Value-added assurance services; external audit; internal audit; governance reviews; financial reporting reviews; IFRS reporting; risk management including IT audit and systems assurance

Managing the board Advice on board governance including: the development of board reporting frameworks; assessment of board effectiveness and the roles, responsibilities and capabilities of individual directors

Foundation trust applications Support in the preparation of integrated business plans and long-term financial models; mock historic due diligence reports; board to board training; board development and effectiveness training

Driving the efficiency agenda Operational services reorganisation; turnarounds; skills gap analysis; performance management; service and cost savings reviews; costing analysis and benchmarking; service line reporting; shared service project support; procurement support; treasury and finance department reviews; VAT efficiencies

Managing infrastructure and bids PPP work providing: bid evaluation; refinancing; feasibility studies; preparation of business cases; risk analysis and public sector comparator (PSC) development; development of payment mechanisms; financial modelling; funding competitions; LIFT schemes

Major investments, mergers and acquisitions Investment appraisals; business case support; investment due diligence; trust merger due diligence and advisory services

Tax advice Corporate and international tax; indirect tax; employer solutions; VAT savings

We have acted as financial advisers to 25 of the 49 NHS LIFT projects, providing financial and commercial advice to the private sector clients, the PCTs involved and to Community Partnerships for Health. We have also provided financial due diligence on nine of the TCS mergers. In addition, we are one of six firms that act as reporting accountants for Monitor, as part of the foundation trust application process.

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Assurance and governance

Grant Thornton is one of the principal providers of value-added assurance and advisory services to foundation trusts, the NHS and the wider commercial and public sectors. We provide current and aspirant FTs with high-quality audit services that not only meet the requirements of the Audit Code produced by Monitor, but go beyond this to identify where improvements can be made to governance processes, the assurance framework and performance management, to help you move your organisation towards best practice.

We were awarded the 2010 Cooksey Award for the best piece of regulatory audit work undertaken within the Audit Commission’s NHS and local government regime. By drawing on our deep knowledge of the issues you face, our assurance work is characterised by its proactive, personalised and impactful style, whether dealing with major organisational transactions or responding to the Government’s GP-led commissioning agenda. This leads our clients to feel reassured by our early involvement in helping them to stay ‘one step ahead’ of the emerging agenda:

“Grant Thornton provided excellent and pro-active support during the adoption of International Financial Reporting Standards. Their attendance at our IFRS project team meetings was particularly useful and ensured we were able to resolve issues quickly and efficiently.”

Nolan Salmon, Financial Controller, Burton Hospitals NHS Foundation Trust

Audit Team of the Year - National Not for Profit team

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Becoming a foundation trust

NHS foundation trusts can retain any surpluses they generate, borrow to invest in new development and better shape their healthcare services around local needs and priorities. The trust’s board will be expected to balance the risks and benefits of different strategic options in a rapidly changing environment. Effective planning and preparation undertaken during the FT application process will not only deliver a successful result, they will also help the trust develop commercially as an independent organisation.We work with aspirant foundation trusts to:

• establish a baseline – understanding where the trust currently stands against the requirements of a FT; evaluating the effectiveness and efficiency of the board and sub-committee structures; reviewing the quality and completeness of reporting to the board; and reviewing the control environment

• confirm strategies and plans – agreeing board values and priorities; designing and agreeing board operating and decision-making processes; developing integrated business plans; and reviewing the long-term financial model

• undertake historic due diligence – advising on the HDD process and interacting with the reporting accountants; and conducting mock HDD

• review and advise on working capital arrangements – assisting aspirant foundation trusts in their application for working capital facilities including market testing with commercial banks

• mock board to board – undertaking mock board to boards, including coaching and preparation for the real thing.

Turnaround and efficiency

Impacted by the changes prevalent in today’s economic climate, government policies of competition and market forces, health providers and commissioners are continually striving to deliver excellent quality of care with increased efficiency. Quality does not have to be sacrificed in order to provide services at optimal cost.

The team at Grant Thornton has the capability to assess and refine patient pathways and then to identify and deliver opportunities or further service improvements. We provide practical and commercial solutions for FTs to provide patient care as efficiently as possible through:• improvingprofitabilityandaccountabilityforfinancial

performance across the organisation • reviewingandchallengingtrustsondeliverabilityofplanned

saving programmes • undertakingbenchmarkingandanalysistotestfinancial

viability of efficiency programmes • assessingclinicalsustainabilityofcostreduction

programmes• liaisingwithProviderAgencyand/orMonitortoensure

they are engaged and supportive• findingVATsavingsandachievingVATefficiencies.

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Mergers and reconfigurations

With the FT regime operating more commercially and in response to regulatory changes, a variety of transactions are occurring in the sector including acquisitions, joint ventures, equity stakes, major property transactions and mergers and alliances. FTs need to take into account commercial issues, impact on risk ratings, appropriate financial and commercial due diligence, risks and return and reporting to Monitor in line with regulatory guidance.

We have developed our CLARITYTM methodology to aid FTs in mergers and reconfigurations. This covers all aspects of the transaction including:

• due diligence – providing an independent view on the financial viability and governance structures and financial reporting procedures for the merged entity or the target trust

• business case support – developing and reviewing strategic outline or full business cases; reviewing working capital requirements and activity and funding assumptions; and undertaking stakeholder and risk analysis. Through this process we have helped FTs to successfully become the preferred bidder

• transaction planning – reviewing and challenging integrated business plans; establishing the programme management office and advising on best practice; executing the integration blue print and developing a performance management framework.

We have advised Monitor on best practice for post-transaction implementation planning. We are a market leader in providing due diligence for foundation trusts undertaking mergers and transactions, drawing on previous experience of NHS trust mergers. Our advice aims to help FTs develop transaction plans to increase the chance of successfully realising the benefits from the transaction cost improvement plans.

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With healthcare organisations under pressure to deliver financial savings, investment tends to be focussed on ‘spend to save’projectsincludingenergyefficiency,outsourcing/sharedservices/jointventuresandpropertyandestatedevelopmentand rationalisation. We draw on our experience of working with clients in the health sector to create bespoke solutions in these areas. These have ranged from initial feasibility studies to the development of business cases and the actual procurement and delivery of the project.

We have a dedicated team with extensive experience of undertaking strategic reviews for trusts and an in-depth understanding of the interrelationship between capital investment and the impact on the financial position of the trust in the short term, as well as in relation to longer-term financial stability and activity projections.

Our clear understanding of the funding options available to trusts enables us to access the most appropriate, bespoke finance solutions to both meet the needs of the trust and provide the required level of flexibility for the future. We also developstrategiesthatensureefficientVATstructures.

WehaveprovidedadviceonexistingPFI/PPPprojectsinrelation to contract reviews and renegotiation, refinancing and specialist financial modelling of options. We have also advised on energy efficiency projects which cut energy use, emissions and costs. These include combined heat and power projects, retrofitting improved heating systems, lighting and better building management controls, and the use of energy supply companies.

Capital investment

EP.799

Contact us

LondonPaul HughesT 020 7728 2256 E paul.hughes@uk.gt.com

Head of Healthcare Bill Upton T 020 7728 3453 E bill.upton@uk.gt.com

Midlands and EastJon RobertsT 0121 232 5410 E jon.roberts@uk.gt.com

South of EnglandJohn GoldingT 0117 305 7802 E john.golding@uk.gt.com

North of EnglandPaul DeverillT 0113 200 1551 E paul.deverill@uk.gt.com