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P64 Financial planning for uncertainty
  1. Alison Ryan and
  2. Sheena Keep
  1. Weldmar Hospicecare Trust, Dorchester, United Kingdom

Abstract

Introduction In common with other independent hospices, Weldmar Hospicecare Trust faces considerable uncertainty over the size and nature of future income. This paper describes the financial modelling which allows us to make sound financial plans despite that uncertainty.

Aims To create an understanding of our complex finances so we can focus on the most impactful income generation, control expenditure and use our Balance Sheet strength to create a future where we are no longer dependent on any one source of income.

Approach used

  • analysis of expenditure and income steams by type and cost centre (80 + budget lines).

  • Application of differential growth/cost pressure assumptions to each line on an Excel model which allows assumptions to be changed producing different results.

Outcomes this command of our finances has allowed us to:

  • make budget adjustments in the context of securing long term strength,

  • to manage sudden unforeseen changes (such as 90% failure of legacy income in one year) without making damaging short term cuts,

  • to distribute resources to staff via pay in a way which is sustainable and transparent and affordable,

  • to invest in income raising possibilities even while running planned £1million deficits.

Our model shows that in four years’ time we will have generated sufficient surplus to minimise the impact of loss or reduction of NHS income should competitive tendering produce such a result. It provides a clear guide to managers on how service development can, or cannot, be afforded.

Application to hospice practice Hospices have complex and unpredictable income streams – NHS, trading, legacies, donations, investment and relatively fixed costs – largely staffing. Without a long term view, short term reactions to financial hiatus can lead to unnecessary curtailment of services, loss of opportunity and lowered morale. This model minimises those problems.

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