Annual Report and Financial Accounts 2010/11


Accounting Policies


The NHS Litigation Authority (NHSLA) operates a risk pooling scheme under which the Foundation Trust pays an annual contribution to the NHSLA which in return settles all clinical negligence claims. Although the NHSLA is administratively responsible for all clinical negligence cases the legal liability remains with the Foundation Trust. The total value of clinical negligence provisions carried by the NHSLA on behalf of the Foundation Trust is disclosed at note 24.


Non-Clinical Risk Pooling


The Foundation Trust participates in the Property Expenses Scheme and the Liabilities to Third Parties Scheme. Both are risk pooling schemes under which the Foundation Trust pays an annual contribution to the NHS Litigation Authority and, in return, receives assistance with the costs of claims arising. The annual membership contributions, and any ‘excesses’ payable in respect of particular claims are charged to operating expenses when the liability arises.


1.14 Contingencies


Contingent assets (that is assets, arising from past events whose existence will only be confirmed by one or more future events not wholly within the Foundation Trust’s control) are not recognised as assets. Contigent liabilities are not recognised but will be disclosed by note.


Contigent liabilities are defined as:


l possible obligations arising from past events whose existence will be confirmed only by the occurrence of one or more uncertain events not wholly within the Foundation Trust’s


control; or


l present obligations arising from past events but for which it is not probable that a transfer of economic benefits will arise or for which the amount of the obligation cannot be measured with sufficient reliability.


1.15 Expenditure on Employee Benefits


Short term employee benefits


Salaries, wages and employee related payments are recognised in the period in which the service was received from the employees. The cost of annual leave entitlement earned but not taken by employees at the end of the period is recognised in the financial statements to the extent that employees are permitted to carry-forward in the following period.


Pension costs


Past and present employees are covered by the provisions of the NHS Pensions Scheme. The Scheme is an unfunded, defined benefit scheme that covers NHS employers, general practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. As a consequence it is not possible for the NHS Foundation Trust to identify its share of the underlying scheme assets and liabilities. Therefore the scheme is accounted for as a defined contribution scheme under IAS 19. The cost of the scheme is equal to the contributions payable to the scheme for the accounting period.


Employers pension cost contributions are charged to operating expenses as and when they become due.


Additional pension liabilities arising from 27


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