Financial Review

NHSBT recovers its costs through charging hospitals for its products and services. Although blood, tissues and organs are freely given by donors our costs include such things as donor collection teams and marketing, processing and testing of blood in our processing centres and laboratories and the storage and delivery of blood components to hospitals. We also receive funding from the UK Health Services in support of our organ donation and our specialist activities, such as the British Bone Marrow Registry and the NHS Cord Blood Bank. Our total income for 2010/11 was £434.3m.

We produce a range of blood components with income for red cells accounting for a significant percentage of our total income. Prices are agreed with the National Commissioning Group for Blood and were set at £124.21 per unit for red cells in 2010/11. During the year 2010/11 our total income of £434.3m exceeded our total expenditure of £420.0m and generated a financial surplus of £14.3m. The surplus arose from a combination of Government expenditure constraints, cost savings and some planned service improvement programmes that will be implemented during 2011/12.

NHSBT receives capital expenditure funding on an annual basis from the Department of Health (DH). This mostly goes towards supporting the fabric and equipment within our processing centres and our laboratories and is often driven by safety and regulatory requirements. During the year, £10.7m of capital funding was spent with approximately 50% used to maintain and improve the BPL factory in Elstree.

Over the last few years we have supported BPL with cash loans as it developed its export business. This lead to a significant cash challenge and resulted in NHSBT delaying payments to creditors (including DH) at the end of last year. As part of the transfer of BPL from NHSBT into a DH owned company during the year the DH agreed to repay the bulk of these loans. Combined with the income surplus that NHSBT generated we are pleased to note that NHSBT working capital and cash have been restored and are now in a satisfactory position.

The price for red cells in 2010/11 of £124.21 per unit noted above compares to £140 per unit in 2008/9. Our ongoing drive for efficiencies has allowed us to maintain the price at £124.85 per unit in 2011/12, in line with our target to retain the savings we have already generated and maintain flat prices through to 2013/14. This reflects our drive to improve productivity across all of our activities and our intent to maintain this through what will be a very challenging period for our customers, NHS Hospitals. We are especially pleased to note that, on this basis, prices going in 2013/14 would be lower in absolute terms (i.e. with no adjustment for inflation or lower volumes) than they were in 2005/6. This represents a highly visible result of our desire to manage our costs and maximise the funds available for the treatment of patients at the front line.