Banking and cashflow management policy

Document control:

Document control information

Policy Name: Banking and Cashflow Management Policy
Policy Number: F003
Version: 1.0
Status: Final – Approved
Author / Lead: Director of Capital & Estates
Responsible Executive Director: Executive Director of Finance & Commercial Officer
Responsible Committee: Audit Committee
Date Approved by Responsible Committee: 3 March 2026
Date Ratified by Board: 1 April 2026
Next Review Date: April 2028
Target Audience:
Essex ICB staff (including temporary/ bank/agency staff).
Contractors engaged by the Essex ICB. Staff from other Essex ICS Partnership organisations working on behalf of the ICB.
Stakeholders Engaged in Development of Policy (internal and external):
Impact Assessments Undertaken: Equality & Health Inequalities Impact Assessment.

Version history

Version: 0.1
Date: 22/12/25
Author (Name and title): Ashley King, Director of Finance & Estates
Summary of amendments made: Draft ICB Policy

Version: 0.2
Date: 28/01/26
Author (Name and title): Natalie Brodie, Associate Director of Financial Management, Accounts & Financial Services Darren Mellis, Head of Financial Services Rob Chivas, Senior Financial Accountant
Summary of amendments made: Draft ICB Policy

Version: 0.3
Date: 03/03/26
Author (Name and title):
Summary of amendments made: Draft policy for committee consideration

Version: 1.0
Date: 03/03/26
Author (Name and title): Corp Svcs & Gov Support Officer
Summary of amendments made: Final – Approved version

Introduction

The Executive Director of Finance & Commercial Officer is responsible for ensuring that the Essex Integrated Care Board (ICB) complies with any Directions issued by the Secretary of State with regards to specified banking facilities for any specified purposes using the minimum number of bank accounts required to run the organisation effectively.

This policy document is a key element of the ICB’s internal control environment and describes how to ensure that cash management responsibilities placed on the Chief Executive Officer and the Executive Director of Finance & Commercial Officer are discharged and implemented. (Standing Financial Instructions 5.2).

NHS England (NHSE) is monitored against a cash mandate set and voted by Parliament through the estimate process submitted to HM Treasury by the Department of Health & Social Care. It is essential that monthly cash data submitted by the ICB is accurate to minimise the cost of the Exchequer borrowing more, or less, cash than is required each month.

This is a controlled document. Whilst this document may be printed (please consider if this is necessary), the electronic version posted on the intranet is the controlled copy. Any printed copies of this document are not controlled.  As a controlled document, this document should not be saved onto local or network drives but should always be accessed from the website (or requested from the Governance Lead/Team) to ensure the most up-to-date version is used.

Purpose / policy statement

The purpose of this policy is to ensure that the relevant ICB staff are aware of key NHSE guidance and their responsibilities in relation to cash management.

ICBs are required to:

• Operate within maximum cash drawdown limits.
• Meet monthly and year end closing cash balance targets.
• Ensure payment runs during the month are within the tolerance of forecast values.
• Submit cash drawdown requests for main and supplementary drawdowns by NHSE deadlines.

Remit

This policy applies to all ICB staff (including temporary/ bank/agency staff), contractors engaged by the ICB and staff from other Essex ICS Partnership organisations working on behalf of the ICB.

Definitions

• Annual Cash Drawdown requirement – total cash budget available for drawdown based on ICB financial plans adjusted for non-cash items such as depreciation.
• BACS payments – Bankers’ Automated Clearing System now known as BACS payment schemes ltd is the process by which payments are made electronically directly into recipients’ bank accounts.
• Better Payments Practice Code (BPPC) – Code NHS organisations are required to sign up to that encourages good supplier payment practices – notably that at least 95% of valid, undisputed invoices will be paid within 30 days of receipt
• Cashflow forecast – working document that shows the predicted cash position based on estimated timing of income and expenditure.
• CFF1 form – monthly form submitted to NHSE estimating the organisation’s cash requirement two months in advance and requesting the cash requirement for the next month.
• CFF2 form – form submitted to NHSE on an exceptional basis if a supplementary cash drawdown is requested.
• CFF3 form – form submitted to NHSE to confirm the signatories that can be accepted for authorisation of CFF1 & CFF2 forms.
• CHAPS payment – Clearing House Automated Payment System – same day electronic payment process whereby high value deposits can be made for a higher fee than BACS.
• Faster payment – same-day electronic payment processed for payments <£1m.
• ISFE2 – Integrated Single Finance Environment – uses standard NHS Oracle platform to provide a common accounting system with a single Chart of Accounts and standardised processes and reporting to all ICBs.
• Monthly cash drawdown – amount of cash deposited in the ICB’s bank account by NHSE monthly determined by the estimates sent in by the ICB finance team in cash drawdown requests.
• NHS SBS – NHS Shared Business Services – NHSE mandated provider of ledger system and transactional financial services provider.
• Purchase Order – document used to authorise expenditure that is raised in ISFE2.
• Sales Order – document raised in ISFE2 to generate an invoice for goods or services supplied.
• Senior Financial Services Officer – members of the financial services team, grade 8B and above.
• Schedule of detailed delegated financial limits – document which shows what authority the Board has delegated to committees or staff under the powers of the Constitution. This is a schedule within the Scheme of Reservation and Delegation (SoRD) within the Constitution.
• Supplementary cash drawdown – by exception an additional cash drawdown can be requested in month which is subject to NHSE approval depending on the reasons for the request.

Roles and responsibilities

Integrated Care Board

The ICB Board is responsible for approving the ICB’s banking arrangements using the government banking service.

Commissioning, Quality and Resource Committee

The Commissioning, Quality and Resource Committee is responsible for assuring the ICB Board that adequate cash management controls, processes and forecasting are in place to ensure that the ICB can meet its commitments.

Executive Director of Finance & Commercial Officer  

The Executive Director of Finance & Commercial Officer is accountable for the banking arrangements of the ICB and ensuring that any amendments to those arrangements are approved by the ICB Board. The Executive Director of Finance & Commercial Officer is also responsible for ensuring that cash is managed in line with relevant Directions and related NHSE guidance.

Financial services team

The financial services team is responsible for completing and submitting the monthly (and if necessary, supplementary) cash drawdown requests appropriately authorised in line with the ICB’s schedule of detailed delegated financial limits. These requests are underpinned by maintaining accurate detailed cashflow forecasts and monitoring actual cash flow requirements against these forecasts.

The ICB must operate within its Annual Cash Drawdown limit notified by NHSE although there is an opportunity to submit an Annual Cash Forecast part way through the year where the financial services team can refine the cash requirements considering movements in working capital.

The financial services team monitors cash closely to ensure that cash remaining at month and year end is less than 1.25% of the relevant month’s cash drawdown which will require daily review approaching the relevant deadlines.

The financial accounts team will review daily bank information produced by Shared Business Services (SBS) (see 5.6.1) and assist with clearing any items not posted to the ledger.

Budget holders

Budget holders can have a significant impact on the cash management and income cycle and are responsible for:

• Identifying and requesting raising of sales orders for income due in their budgetary area and assisting with ensuring that cash is collected.
• Receipt goods and services and authorise expenditure invoices for payment as soon as possible after the goods and services are received and in good time to enable payment within 30 days in line with the Better Payments Practice Code (BPPC) and assist in resolving invoice disputes promptly.
• Work with their designated finance lead to provide information on the timing of cash payments especially where they impact on normal anticipated cash flows.

NHS SBS cash management team

SBS produce daily cash books and forecasts. This includes daily bank reconciliations of the Government Banking Service bank account and the general ledger.

Policy detail

Bank account

The ICB has one bank account held with Royal Bank of Scotland (RBS) within their NatWest brand. Government Banking Services manage the contract.

The Bank Mandate is to be kept up to date and authorised in line with the ICB’s schedule of detailed delegation financial limits. Changes to the bank mandate are reported to the next Audit Committee meeting.

Daily actions

NHS SBS provides a daily cashbook and cashflow forecast to the financial services team and the most recent bank statement is available to review through reports within ISFE2.

The financial services team will support the SBS cash management team to investigate and clear any items not posted to the ledger.

Monthly actions

The financial services team will complete a monthly cash drawdown and forecasting form (CFF1) utilising the information collected in weekly cashflow monitoring. This form requests the cash drawdown for the following month and includes the detailed cash forecast for the month after next. CFF1 forms are submitted to SBS cash management and NHSE monthly, with cash being paid to the ICB on the first working day of the month. CFF1s must be appropriately authorised in line with the signatures confirmed on the current CFF3 form which is authorised by the Executive Director of Finance & Commercial Officer or Director of Finance. 

The financial services team will ensure that sufficient cash is drawn down to meet contract payments to both NHS and non-NHS providers, and Local Authorities. It is also important to prioritise payroll payments including tax, National Insurance and pension pay overs. Contractual payments to GP practices are also prioritised.

The ICB is signed up to the Better Practice Payments Code (BPPC) ensuring that at least 95% of invoices are paid within 30 days of receipt of a valid invoice or receipt of the goods and services. Performance against the BPPC is reported to the Board and in the ICB’s Statutory Accounts.

There is a supplementary cash drawdown process which is available in exceptional circumstances (using the CFF2 form). NHSE require a detailed explanation demonstrating why the funds are required and the request may not be approved. The financial services team should put in place processes to ensure that the need for supplementary drawdown requests is minimised. Requests for supplementary cash drawdown are authorised in line with the signatures confirmed on the current CFF3 form (see section 6.3.1 above).

The financial services team will review the unallocated cash report to ensure that unallocated cash against locally created receipts is cleared and where unallocated cash is “on account” appropriate action is taken so that SBS can clear such items.

At the end of each month and at year end the SBS cash management team issue a formal reconciliation of the bank account control codes. The financial services team reviews the reconciliations and investigates the reconciling items, requesting the SBS cash management team clear the items where necessary. The reconciliations are signed off by a senior financial services officer and a record kept of this authorisation.

At month and year end the ICB is required to hold a cash balance of no more than 1.25% of the relevant month’s cash drawdown. To achieve this the financial services team will give additional attention to the cashflow forecast towards month end and throughout March leading up to year end. Where the month or year-end balance is likely to exceed the target or cash is insufficient to meet the final payment run of the month or year the financial services team will work with both customers and suppliers to manage the position using professional judgement in liaison with a senior financial services officer.

Annual actions

ICBs receive monthly cash reports generated from the NHSE treasury and transacting team. These reports show the latest Annual Cash Drawdown Requirement for the ICB which is generated from the net resources for the approved budget (including capital) and adjusted for non-cash items, forecast changes in working capital, ICB planned surplus or deficit, brought forward cash balance and resource allocations as they are received during the year.

ICBs receive a monthly cash pack from the NHSE cash team and are required to explain any year-to-date variances over 2%. 

Other considerations

The ICB will use BACS where possible as this is a more efficient payment method when compared to Faster Payments or CHAPS. To improve the use of BACS the ICB will ensure payment forecasts are accurate to minimise the need to make one-off payments outside of BACS payment cycles.

The financial services team will work alongside the SBS cash management team to resolve any reconciling items. Ad hoc calls will be held with the SBS cash receipting team to discuss unallocated cash.

The receivable activities listing will be reviewed by the financial services team at least every 6 months to ensure coding and VAT treatment remain accurate and to remove any duplicates.

Cashflow forecasts should accurately reflect the day that payments will clear noting that BACS payments clear on day 3 after the payment run is approved.

Invoices should be approved by 4pm at the latest on the day before the relevant payment run.

Pensions and Tax/NI are paid by SBS on 19^th and 22^nd of the month respectively or the previous working day if these dates fall on a weekend or bank holiday.Purchase Card – see ICB policy ‘Creditor and Purchase Policy’ section 6.5.

Monitoring compliance

The financial services team will include, where possible, high-level progress on ISFE2 metrics in financial reporting to each meeting of the Commissioning, Quality and Resource Committee along with a monthly cash flow forecast statement.

When available, high-level performance against the BPPC is reported to each meeting of the Commissioning, Quality and Resource Committee and annual performance is disclosed in the ICB Statutory Accounts.

Staff training

Line managers must ensure that all relevant staff are aware of the contents of this policy document and the processes required to comply.The Executive Director of Finance & Commercial Officer is responsible for ensuring that appropriate training is given to finance staff and budget holders in order that they can fulfil their responsibilities outlined in this policy document.

Arrangements for review

This policy will be reviewed no less frequently than every two years.  An earlier review will be carried out in the event of any relevant changes in legislation, national or local policy/guidance, organisational change or other circumstances which mean the policy needs to be reviewed.

If only minor changes are required, the sponsoring Committee has authority to make these changes without referral to the Integrated Care Board. If more significant or substantial changes are required, the policy will need to be ratified by the relevant committee before final approval by the Integrated Care Board.

Associated policies, guidance and documents

• Accounting & Financial Management Policy
• Creditor and Purchase Policy
• Debtor and Sales Order Policy

References

• ICB Scheme of Reservation and Delegation
• ICB Standing Financial Instructions

Equality Impact Assessment

The EIA has identified no equality issues with this policy. 

The EIA has been included as Appendix A.

Appendix A – Equality impact assessment

Assessor’s name:  Natalie Brodie

Assessor’s job title:  Associate Director of Financial Management, Accounts & Financial Services 

Date: 28 January 2026

Outcomes 

Evidence 

Analysis of impact on equality 

The Public Sector Equality Duty requires us to eliminate discrimination, advance equality of opportunity and foster good relations with protected groups. Consider how this policy / service will achieve these aims.  

N.B. In some cases it is legal to treat people differently (objective justification).

• Positive outcome – the policy/service eliminates discrimination, advances equality of opportunity and fosters good relations with protected groups
• Negative outcome – protected group(s) could be disadvantaged or discriminated against
• Neutral outcome – there is no effect currently on protected groups

Please tick to show if outcome is likely to be positive, negative or neutral. Please fill all boxes, any that aren’t applicable enter N/A.

Consider direct and indirect discrimination, harassment and victimisation.

Monitoring Outcomes

Monitoring is an ongoing process to check outcomes. It is different from a formal review which takes place at pre-agreed intervals.

Review