UKHSA Advisory Board: finance report
Updated 29 January 2024
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Purpose of the paper
This paper gives an overview of the UK Health Security Agency’s finances as at month nine of financial year 2023 to 2024 (the end of December 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 December)
The table 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; and non-COVID vaccines and countermeasures and the COVID Vaccine Unit. It shows year-to-date and forecast full-year outturn against budget. We are working through some technical issues in parallel with the Department of Health and Social Care (DHSC).
Table 1: Month 7 year to date resource departmental expenditure limits (RDEL) and capital departmental expenditure limits (CDEL)
| Budget | Provisional | Variance | |
|---|---|---|---|
| Core RDEL | 290,923 | 270,082 | 20,841 |
| COVID RDEL | 201,622 | 151,495 | 50,127 |
| ODA RDEL | 11,011 | 11,011 | 0 |
| CVU RDEL | 876,485 | 776,717 | 99,768 |
| VCR RDEL | 355,350 | 375,450 | (20,100) |
| Core CDEL | 63,965 | 45,090 | 18,875 |
| COVID CDEL | 0 | 18,112 | 18,112 |
| VCR CDEL | 14,012 | 15,648 | (1,636) |
| UKHSA total resource | 1,735,391 | 1,584,755 | 150,636 |
| UKHSA total capital | 77,977 | (185,970) | 263,947 |
| UKHSA total | 1,813,368 | 1,398,785 | 414,583 |
Table 2: Full year resource departmental expenditure limits (RDEL) and capital departmental expenditure limits (CDEL)
| Budget | Provisional | Variance | |
|---|---|---|---|
| Core RDEL | 375,193 | 370,899 | 4,293 |
| COVID RDEL | 283,823 | 284,450 | (528) |
| ODA RDEL | 12,412 | 12,412 | 0 |
| CVU RDEL | 939,000 | 1,007,362 | (68,362) |
| VCR RDEL | 568,137 | 596,824 | (28,687) |
| Core CDEL | 83,129 | 84,844 | (1,715) |
| COVID CDEL | 0 | (18,112) | 18,112 |
| VCR CDEL | 20,551 | 31,544 | (10,993) |
| UKHSA total resource | 2,178,664 | 2,271,947 | (93,283) |
| UKHSA total capital | 103,680 | (185,970) | 222,373 |
| UKHSA total | 2,282,344 | 2,153,254 | 129,090 |
Core resource and capital budget
UKHSA’s core resource budget was agreed at £395m. Of that, £11m was ringfenced by DHSC as contingency against a shortfall in our royalty income and £11.2m 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 £4.3m against the revised budget. However, the current monthly run rate would project an underspend of c£13m which suggests that there is still optimism about spending and delivery in quarter four. The mitigating actions that have been agreed by ExCo as they monitor progress should utilise the year-to-date underspend and increase delivery in the final quarter.
The core capital budget has been over-programmed for the year to be offset by credits generated on the COVID-19 capital budget. Planned projects have now gone through planning stages and gained approvals and a significant acceleration of spend has started which will continue during quarter four. The phasing of capital spend is in line with historic delivery, however the budget phasing was inaccurate which is what drives the year-to-date variance.
The replacement laboratories programme submitted advice to DHSC ministers in December. The feedback received is currently being worked through and further information on options within the total programme budget will be submitted by the end of February.
COVID-19 resource and capital budget
The year-to-date position shows an underspend as demand has been lower than originally planned and we prioritise bringing down spending during this final year of COVID-19 funding. Budget transfers to NHSE are planned which will utilise the remaining budget and year-to-date underspends.
COVID Vaccine Unit 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. Since M9 reporting further changes to the 2022 to 2023 accounts have crystalised which results in a significant prior period adjustment which will be reflected in M10 reporting.
The capital credit is generated by a refund and purchases from contracts agreed in the previous financial year and delivered in 2023 to 2024. The NAO audit opinion on 2022 to 2023 is resolved. The impact on the CVU 2023 to 2024 position is still to be finalised.
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 and initial returns are to be completed by the end of January. Planning includes looking at the impact of the FTE cap, potential cost pressures from residual COVID-funded activity and capability for future pandemic preparedness.
Annual accounts
UKHSA’s annual report and accounts are due to be published on Thursday 25 January 2024. I will provide a verbal update at the Advisory Board meeting.
Andrew Sanderson
Chief Financial Officer
January 2024