UKHSA Advisory Board: finance report
Updated 13 December 2023
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Purpose of the paper
This paper gives an overview of the UK Health Security Agency’s (UKHSA) finances as at month 7 of financial year 2023 to 2024 (the end of October 2023).
Recommendations
The Advisory Board is asked to note UKHSA’s financial position.
Summary of in-year 2023 to 2024 financial performance (at end of October)
The tables below shows resource and capital departmental expenditure limits (RDEL and CDEL) for 2023 to 2024, split by the parts of:
- core agency costs
- COVID-19
- COVID Vaccine Unit (CVU)
- vaccines and countermeasures
Table 1: Month 7 year to date resource departmental expenditure limits (RDEL) and capital departmental expenditure limits (CDEL)
| Budget | Actual | Variance | |
|---|---|---|---|
| Core RDEL | 224,116 | 207,053 | 17,062 |
| COVID RDEL | 157,856 | 122,323 | 45,533 |
| ODA RDEL | 8,007 | 8,007 | 0 |
| CVU RDEL | 489,064 | 728,382 | (239,318) |
| Vaccines and countermeasures response RDEL | 197,789 | 211,221 | (13,432) |
| UKHSA total resource | 1,076,832 | 1,266,987 | (190,155) |
| Core CDEL | 44,908 | 30,286 | 14,622 |
| COVID CDEL | 0 | (18,112) | 18,112 |
| CVU CDEL | 0 | (148,124) | 148,124 |
| Vaccines and countermeasures response CDEL | 4,668 | 5,866 | (1,198) |
| UKHSA total capital | 49,576 | (130,084) | 179,660 |
| UKHSA total | 1,126,408 | 1,136,902 | (10,494) |
Table 2: Full year resource departmental expenditure limits (RDEL) and capital departmental expenditure limits (CDEL)
| Budget | M7 forecast | Variance | |
|---|---|---|---|
| Core RDEL | 375,193 | 370,900 | 4,293 |
| COVID RDEL | 445,481 | 419,680 | 25,800 |
| ODA RDEL | 10,342 | 10,342 | (0) |
| CVU RDEL | 939,000 | 1,021,786 | (82,786) |
| Vaccines and countermeasures response RDEL | 568,137 | 598,552 | (30,415) |
| UKHSA total resource | 2,338,152 | 2,421,260 | (83,108) |
| Core CDEL | 83,129 | 84,844 | (1,715) |
| COVID CDEL | 0 | (18,112) | 18,112 |
| CVU CDEL | 0 | (189,602) | 189,602 |
| Vaccines and countermeasures response CDEL | 20,551 | 25,060 | (4,509) |
| UKHSA total capital | 103,680 | (97,810) | 201,490 |
| UKHSA total | 2,441,832 | 2,323,449 | 118,383 |
Core resource and capital budget
UKHSA’s core resource budget was agreed at £395 million. Of that, £11 million was ringfenced by the Department of Health and Social Care (DHSC) as contingency against a shortfall in our royalty income and £11.2 million for workforce transition. These are now unlikely to be needed, so the budget has been reduced.
The full-year resource forecast shows an underspend of £4.3 million against the revised budget. However, the current monthly run rate would project a much larger underspend of circa £20 million. Although group forecasts have been reviewed and challenged for realism, there is a risk that they are still overly optimistic about spending and delivery. The Executive Committee has been closely overseeing progress, and agreed a set of mitigating actions in quarter 2 that should lead to increased delivery in the final months of the year.
We are currently waiting for further detail in relation to the announcement on capping civil service headcount, which could impact on plans. The total UKHSA workforce at September 2023 is planned to increase slightly by March 2024. This reflects continuing recruitment to core-funded clinical and science functions, balanced by reductions from the phasing out of remaining COVID-19 funded activity.
The core capital budget has been over-programmed for the year to be offset by credits generated on the COVID-19 capital budget. It was always expected that spending would be back-loaded, reflecting the time for projects to go through planning stages and gain approvals. A significant acceleration of spend is expected in quarters 3 and 4, in line with historic delivery.
The replacement laboratories programme is developing the strategic review of the programme business case. A priority component of the work is establishing options for reducing costs closer to the original budget; advice is due to go to DHSC ministers in December.
COVID-19 resource and capital budget
The year-to-date position shows an emerging underspend as demand has been lower than originally planned and we prioritise bringing down spending during this final year of COVID-19 funding.
CVU resource and capital budget
The resource forecast is based on national vaccine drawdown plans and an optimum inventory position, which supports demand and scientific advice. The full-year forecast is a pressure against the agreed budget at the time of the spending review but within the margin agreed in principle for additional HMT Reserve funding.
The capital credit is generated by a refund and purchases from contracts agreed in the previous financial year and delivered in 2023 to 2024.
Vaccines and countermeasures resource and capital budget
This budget is ring-fenced by DHSC and is currently managed on the basis that UKHSA should neither gain nor lose.
Business planning
Activity is underway with Groups on business planning for 2024 to 2025, which includes looking at the potential cost pressures from residual COVID-19 funded activity and at the agency’s capability for future pandemic preparedness.
Annual accounts and the finance and control improvement programme
The audit for UKHSA’s annual report and accounts (ARA) for 2022 to 2023 is in its final stages; I will update the board verbally on the latest position. The overall process has been much smoother than last year, reflecting strong progress from the finance and control improvement programme. The programme’s continuing work is focused on embedding improvements sustainably.
Andrew Sanderson
Chief Financial Officer
November 2023