Page 86 - Pharmacy Appeals 1/4/04 to 31/3/05

62 Performance analysis

Administration costs in-year
financial performance

Administration costs for all of our activities (including the We have continued to expand our operations this year
costs of administering member-funded schemes and GPI to handle the historical claims taken on from MPS
arrangements which have been allocated to the scheme in April 2021 and the increasing volume of claims
DEL budgets above) have increased by £8.8 million (25%) being received from the maturing CNSGP scheme.
to £44.2 million. This primarily relates to staffing costs, as General practice indemnity scheme claims require
average full-time equivalent staff numbers have increased more activity from our staff compared to claims against
by 92 (23%) to 492. The costs of a further eight full-time secondary care providers as the latter have legal teams
equivalent staff were charged to capital projects bringing to support with the administration of the claim.
our total to 500 full-time equivalent staff members.
We have launched a programme of change in respect
In addition, this year we have generated £935k (£759k of our business model for claims delivery which we
in 2020/21) of income from commercial activity in anticipate will increase our administration costs further,
respect of activities and services to other national but will deliver financial benefits from reduced NHS legal
governments delivered by our Practitioner Performance costs. We have also progressed with the implementation
Advice service. These activities made a surplus of £ 142k phase of a replacement of our core IT operating systems,
(15%) during the year as we have adapted to remote as well as other IT and digital projects to enhance our
delivery of educational services through the pandemic. infrastructure and analytical capabilities. Corporate
The average administration cost of resolving claims support costs have also increased in relation to provision
has increased in recent years as a result of our of actuarial advice on our expanded range of indemnity
investment in staffing in order to meet our widened schemes, and to assist with the delivery of the objectives
remit and objectives in tackling the broader drivers of a growing and increasingly complex organisation.
of claims costs to minimise costs overall.

As a proportion of the value of total claims
settlements, administration costs have increased
from 1.28% to 1.50%. Administration costs have
increased at a faster rate than claims payments.

Figure 17:
Administration spend as a percentage of annual total claims settlement costs

Financial year