Balanced scorecard

Report prepared by: Julie Tidy (Ext. 4863) Report sponsored by: Director of Finance and Performance Board Meeting 27th July 2004 Agenda Item:7

Balanced Scorecard

Purpose The purpose of this report is to outline the Assembly’s Balanced Scorecard approach for performance managing NHS Wales and to agree the LHB Balanced Scorecard.

Recommendation Board members are requested to note thecontents of this report and approve the LHB Scorecard.

Board Meeting

27th July 2004 Agenda Item:7

Background Proposals to strengthen the performance management systems for the NHS in Wales was first outlined in ‘Improving Health in Wales’. As a result of this, the Welsh Assembly Government has been working with the service to develop a new performance management system that takes a holisticview of performance, rather than focusing on a number of defined targets. A new performance improvement framework has been developed, based around a Balanced Scorecard approach, and will be used as the basis for performance managing NHS Wales organisations from 1 April 2004. Both the SAFF (2004/05) and proposed performance improvement framework will govern the way in which the LHB is performancemanaged. It is intended that the SaFF and balanced scorecard will contain separate targets but are closely linked, as defined below. • SaFF Priorities and Requirements (targets) – high level targets that require implementation of a new approach or increased performance ensuring the further development of NHS Wales. Balanced Scorecard measures – measure how well an organisation is being managed toensure that it is fit for purpose and adaptable, flexible and efficient enough to deliver the high level SaFF targets over the longer term.

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Implementing the Balanced Scorecard Approach The Assembly has recently published a circular [WHC (2004) 047], which sets out the arrangements for implementing the balanced scorecard during 2004/5. This circular defines the balanced scorecard andrequirements for its implementation for NHS Wales (corporate scorecard), and national scorecards for LHBs, NHS Trusts and the Ambulance Trust. It also describes how this approach will be developed for the future. The circular is attached at appendix 2. The balanced scorecard consists of four quadrants, and the strategic objectives and critical success factors for these quadrants are illustrated in figure1.

Board Meeting

27th July 2004 Agenda Item:7

Figure 1 – balanced scorecard quadrants
STAKEHOLDERS How well are we meeting the needs of patients, public, staff and government? Strategic objectives ! Equitable and timely access to services ! High quality and safe services ! Engaged workforce ! Improvement in health gain Critical success factors ! Reputation/image ! Stakeholdersatisfaction and relationship ! Service delivery and responsiveness MANAGEMENT PROCESSES To satisfy our stakeholders what management processes must we excel at? Strategic objectives ! Management processes that support the delivery of timely and quality services ! Partnership working ! Robust, reliable, relevant and timely information Critical success factors ! Interface with partners ! Process efficiencyand quality ! Timeliness RESOURCE UTILISATION Are we using resources effectively? Strategic objectives ! Adherence to core financial duties ! Efficient use of resources ! Access to and effective use of IT to improve efficiency and effectiveness Critical success factors ! Cost control ! Value for money ! Efficient use of resources LEARNING AND INNOVATION Can we continue to improve and create value?Strategic objectives ! Developments based on best practice and evaluation ! Staff involved in modernization of service delivery ! Flexible workforce and organisation ! Effective leadership Critical success factors ! Investment in management development and training ! Effective leadership ! Creating and maintaining a learning organisation ! Universalising best practice

Balanced scorecards...