UKHSA Advisory Board: finance report
Updated 11 September 2023
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This publication is available at https://www.gov.uk/government/publications/ukhsa-board-meeting-papers-september-2023/ukhsa-advisory-board-finance-report
Date: Wednesday 13 September 2023
Sponsor: Andrew Sanderson, Chief Financial Officer
Purpose of the paper
This paper gives an overview of the UK Health Security Agency’s finance as at month 4 of financial year 2023 to 2024 (the end of July 2023).
Recommendation
The Advisory Board is asked to note UKHSA’s financial position.
Summary of in-year 2023 to 2024 financial performance (at end of July)
The tables below show resource and capital departmental expenditure limits (RDEL and CDEL) for 2023 to 2024.
They are split by the parts of core agency costs, COVID-19 and non COVID-19 vaccines and countermeasures and the COVID Vaccine Unit (CVU).
They show year to date (Table 1) and forecast full year outturn (Table 2) against budget. Figures shown reflect thousands (£’000).
Table 1: Year to date resource departmental expenditure limits (RDEL) and capital departmental expenditure limits (CDEL)
| Budget | Actual | Variance | |
|---|---|---|---|
| Core RDEL | 128,245 | 124,066 | 4,180 |
| COVID RDEL | 89,668 | 61,775 | 27,893 |
| CVU RDEL | 130,081 | 131,117 | (1,036) |
| Vaccines and countermeasures response RDEL | 132,270 | 138,894 | (6,624) |
| UKHSA total resource | 480,264 | 455,852 | 24,412 |
| Core CDEL | 30,779 | 15,866 | 14,913 |
| COVID CDEL | 0 | (9,703) | 9,703 |
| CVU CDEL | 0 | 0 | 0 |
| Vaccines and countermeasures response CDEL | 0 | 3,245 | (3245) |
| UKHSA total capital | 30,779 | 10,038 | 20,740 |
| UKHSA total | 511,043 | 465,890 | 45,152 |
Table 2: Full year resource departmental expenditure limits (RDEL) and capital departmental expenditure limits (CDEL)
| Budget | M4 forecast | Variance | |
|---|---|---|---|
| Core RDEL | 392,570 | 397,761 | (5,191) |
| COVID RDEL | 449,781 | 442,317 | 7,464 |
| CVU RDEL | 939,000 | 929,530 | 9,470 |
| Vaccines and countermeasures response RDEL | 568,137 | 606,662 | (38,525) |
| UKHSA total resource | 2,349,488 | 2,376,270 | (26,782) |
| Core CDEL | 83,029 | 95,532 | (12,503) |
| COVID CDEL | 0 | (18,112) | 18,112 |
| CVU CDEL | 0 | (78,719) | 78,719 |
| Vaccines and countermeasures response CDEL | 0 | 97,855 | (97,855) |
| UKHSA total capital | 83,029 | 96,555 | (13,526) |
| UKHSA total | 2,432,517 | 2,472,826 | (40,309) |
Core resource and capital budget
UKHSA’s core resource budget is shown net of a £3 million reduction on the agreed settlement of £395 million. The change comes from a reduction of £11 million, which was ringfenced by the Department of Health and Social Care (DHSC) as contingency against a shortfall in royalty income which now seems unlikely. This is offset by an increase of £8 million to deliver official development assistance work.
The year-to-date core resource position shows an underspend and based on the current monthly run rate would project an underspend of circa £25 million. However, the current full year forecast shows a small pressure which includes ambitious recruitment plans especially in recruiting to planned workforce in front-line scientific and clinical areas.
The financial performance of each group is reviewed quarterly with the Executive Committee (ExCo) leads where forecasts are scrutinised. Following the quarter one reviews, emerging underspends formed the basis of an in-year prioritisation exercise completed in August, where ExCo agreed bids to fund spending on in-year projects which bring forward spend from future years or will deliver spend to save initiatives.
The core capital budget has been over programmed for the year to be offset by credits generated on COVID-19 capital budget. The phasing of the core capital budget is a known issue which will be revisited in quarter 2. Capital spend is from major projects that are one-off in nature and the time taken to gain approvals and go through planning stages will see an acceleration of spend in quarters 3 and 4.
The replacement laboratories programme is developing the strategic review of the Programme Business Case, requested by the Secretary of State. A key component of the work is establishing options for reducing costs closer to the £2 billion envelope agreed in 2018. Internal reviews and the preferred option are to be finalised by October ahead of submissions to the Secretary of State and HM Treasury.
COVID-19 resource and capital budget
The allocation for the final year of COVID-19 funding was confirmed in June. Of the £575 million total it was agreed that £125 million will transfer to NHS England to support COVID-19 polymerase chain reaction (PCR) testing in NHS settings for 2023 to 2024.
For the full year, there is a small emerging underspend as a priority is to bring down spending while continuing to deliver the government’s Living with COVID-19 strategy. Work is currently under way to understand further detail on potential cost pressures for 2024 to 2025 from residual COVID-19 activity.
COVID-19 Vaccine Unit resource and capital budget
The full year forecast shows a break-even position. Forecasts are based on Joint Committee on Vaccination and Immunisation (JCVI) draft recommendations for the autumn vaccination campaign on cohort size and prioritising new or in stock vaccines.
The capital credit is generated by a refund on a contract from the previous financial year to procure vaccines which will not be delivered.
Vaccines and countermeasures
This budget is ring-fenced by DHSC and is currently managed on the basis that UKHSA should neither gain nor lose.
Annual Accounts and the Finance and control improvement programme
The draft UKHSA 2022 to 2023 Annual Report and Accounts were reviewed by the UKHSA Audit and Risk Committee in June and submitted. The National Audit Office’s external audit has started as planned and is in progress.
The Audit and Risk Committee were updated on progress on 5 September 2023 and a verbal update will be given at the Advisory Board meeting.
The current phases of the Finance and Control Improvement Programme cover a broader set of control and financial management improvements with 12 workstreams in line with good practice and government standards, including implementing and embedding system and process improvements
Andrew Sanderson
Chief Financial Officer
September 2023