Work packages provide short term specialist input, outsourced services and software development skills and have increased to supplement internal teams.
However, the ratio of temporary staff has remained largely consistent at 3%.
Non-current assets
The capital expenditure limit for 2018-19 was £106.9 million.
The actual capital expenditure was as follows:
|
2018-19
£000
|
2017-18
£000
|
| Internally and externally developed software |
47,701 |
24,819 |
| Development expenditure |
23,684 |
19,514 |
| IT hardware, including esktop and corporate infrastructure |
2,442 |
13,792 |
| Software licences, including desktop and corporate infrastructure licences |
120 |
4,831 |
| Refurbishments, fitting out new office space and furniture |
2,519 |
1,139 |
| Net book value of disposals |
(217) |
(624) |
| Total |
76,249 |
63,471 |
Our informatics transformation programmes have resulted in a near doubling of expenditure on developed software. This is part of the natural lifecycle of these large infrastructure projects.
A significant proportion of the new software and development expenditure has been created internally, with the value of internal time capitalised amounting to £17.6 million (2017-18: £18.0 million). This data is captured by either a time recording system or by information technology management tools, with the average hourly charge rate determined by the employee’s grade. The rate includes the total direct cost of employment together with an incremental direct overhead cost, comprising of estate and IT costs. General overhead is not capitalised. Project management time is only capitalised where time is directly attributable to the development of the asset.
In 2017-18, we upgraded internal technologies, including laptops, tablets and mobiles, to improve staff efficiency and working practices. Expenditure in these categories in 2018-19 was considerably lower.
Other non-current receivables refer to those transactions where the prepayment is in excess of 12 months in the future and include software licences that cannot be capitalised together with support and extended hardware warranties.
Current assets and liabilities
Contract receivable balances amounted to £6.4 million (31 March 2018: £11.6 million). This is a significant reduction and is largely due to finalising workpackages with our key customers earlier in the year and therefore being able to invoice more promptly.
Prepayments under one year were £11.6 million (31 March 2018: £13.6 million). Contract receivables not yet invoiced (which represents work completed but not yet invoiced) were £0.5 million (31 March 2018: £0.8 million).
The amount more than 60 days overdue was £0.3 million (31 March 2018: £0.2 million). Debts of £15 were written off and £6,312 was provided for as irrecoverable. Debts previously provided of £1,158 were released following recoveries of the amounts due.
We had very limited exposure to financial instruments with balances only consisting of cash, trade receivables and payables.
Cash flow was managed to meet operational requirements throughout the year by drawing down sufficient cash from the grant-in-aid allocation.
We seek to comply with the Better Payments Practice Code by paying suppliers within 30 days of receipt of an invoice. The percentage of non-NHS invoices paid within this target was 99.1% (31 March 2018: 99.5%). The days outstanding at 31 March 2019 increased to 13.3 days from 11.5 days at 31 March 2018, reflecting a higher than normal volume of invoices processed in March 2019.
| Better payments practice code |
Number |
£000 |
| Total non-NHS bills paid 2018-19 |
10,338 |
307,789 |
| Total non-NHS bills paid within target |
10,186 |
305,104 |
| Percentage of non-NHS bills paid within target |
98.1% |
99.1% |
| Total NHS bills paid 2018-19 |
228 |
6,787 |
| Total NHS bills paid within target |
193 |
5,926 |
| Percentage of NHS bills paid within target |
84.6% |
87.3% |
| Total value of invoices processed in 2018-19 |
- |
354,221 |
| Total value of invoices outstanding at 31 March 2019 |
- |
12,907 |
| Number of days outstanding |
- |
13.3 |
The calculations of the Better Payment Practice Code use the formula agreed by users of NHS Shared Business Services (SBS). SBS stipulates that the number of days outstanding is calculated from the date a validly presented invoice is processed on the SBS system to the date a payment is initiated. We are conscious that this calculation can understate the time taken because it takes considerable time from the invoice date to processing the invoice on the system. SBS offers a free solution to all suppliers called Tradeshift, which allows suppliers to electronically upload invoices to the SBS system in real time, which reduces this delay.
Government guidance is to pay 80% of all suppliers’ invoices that are not disputed within five working days. This target is particularly challenging for NHS Digital given the complexity of many of our transactions. In 2018-19, we paid 33.7% (2017-18: 40.4%) based on volume, and 41.6% based on value (2017-18: 50.0%) within the five-day target.
Sustainable development
Information about our environmental impact and sustainability is included in our sustainability report.
Auditors
These accounts have been audited by the Comptroller and Auditor General, who has been appointed under statute and is responsible to Parliament. The audit fee for 2018-19 was £115,000, which was unchanged from 2017-18. The audit fee only includes audit work. No additional payments were made.
The Accounting Officer has taken all steps to ensure she is aware of any relevant audit information and to ensure that NHS Digital’s auditors are aware of that information. To the best of the Accounting Officer’s knowledge, there is no relevant audit information of which NHS Digital’s auditors are unaware.
The internal audit service during the financial year was provided by the Government Internal Audit Agency.