Health and Sport Committee

Meeting date: Tuesday, June 13, 2017

Official Report 673KB pdf

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Integration Authorities’ Engagement with Stakeholders and Draft Budget 2017-18

Agenda item 12 is an evidence-taking session with the Cabinet Secretary for Health and Sport on integration authorities’ engagement with stakeholders and the draft budget 2017-18. I welcome to the meeting the Cabinet Secretary for Health and Sport, Shona Robison, and I welcome from the Scottish Government, Geoff Huggins, who is director of health and social care integration, and Christine McLaughlin, who is director of health finance.

I invite the cabinet secretary to make an opening statement.

I thank the convener for the invitation to speak to the committee today.

I welcome the committee’s interest in the integration of health and social care and this opportunity to discuss in more detail integration authorities’ engagement with stakeholders and the budget-setting process. That process is important, not least because integration authorities now manage more than £8 billion of resources that used to be managed separately by national health service boards and local authorities. It is a big amount of money, but it is also a limited amount, and we recognise that it needs to be used more effectively and efficiently. By that, I mean that we need to shift resources towards more preventative activity, reduce reliance on reactive hospital-based care and provide the right care at the right time and in the right place, which will, I hope, be in the patient’s home as often as possible.

That said, integration should not be seen as being just about budgets; it is also about improving outcomes for people. That is why I want to focus in particular on stakeholder engagement. It was at the heart of our legislation on integrating health and social care, the aim of which was to put service users at the centre of things along with service providers to ensure that their voices are heard and that they are fully involved in decision making and in planning.

We should recognise that integration is still at a very early stage and is still evolving. We have seen a lot of progress in ensuring proper engagement of key stakeholders instead of their having tokenistic involvement, although we acknowledge that we still have some way to go. I think that that has been acknowledged in earlier evidence-taking sessions. For example, the Coalition of Carers in Scotland noted that it had

“seen a lot of improvements and best practice development”—[Official Report, Health and Sport Committee, 25 April 2017; c 3.]

and, in the same meeting, Voluntary Action South Lanarkshire highlighted its involvement in strategic commissioning.

The strategic planning group in each integration authority, along with locality planning arrangements, is where engagement is particularly important, because those who know best how services should be delivered are those who receive the services and those who provide them. Their empirical evidence must be supported by data that must be readily available and accessible to stakeholders. We are working with NHS National Services Scotland on further developing a link to the health and social care data set known as “NSS source”, which I understand my officials have demonstrated to the committee and which will be key in informing future decision making.

Clearly, open sharing of data will require trust between and across sectors, and we are already seeing where that approach can work—for example, in the improvements to home care in NHS Highland, where the local Scottish Care representative co-chairs the strategic planning group.

I am happy to take questions.

Thank you very much.

Thank you for joining us this morning, cabinet secretary. I very much appreciate the tone of your opening statement, because it is clear that there is still work to be done on stakeholder engagement. For example, Amy Dalrymple of Alzheimer Scotland told us that she attended a meeting of an umbrella group of organisations and spoke to a chief officer of a health and social care partnership, and said that when she suggested the important contribution that third sector organisations could make

“The response that I got was that it would be very welcome if we were to help to communicate why certain decisions had been made”—[Official Report, Health and Sport Committee, 25 April 2017; c 25.]

instead of their being involved in the decision-making process. Andrew Strong of the Health and Social Care Alliance Scotland said:

“At the IJB governance level, the relationship between the statutory sector and the third sector, the independent sector and people who use supporting services is inherently unequal,”

and went on to mention

“the nature of voting rights and the number of people on the boards.”—[Official Report, Health and Sport Committee, 25 April 2017; c 21.]

Is local co-production achievable if, as organisations such as the Health and Social Care Alliance are suggesting, the relationship is “inherently unequal”?

As I said in my opening statement, there are examples of good practice; Alison Johnstone has highlighted examples of not-so-good practice. We are still at a fairly early stage in the life of the integration authorities and we are seeing good practice across a number of fronts in many integration authorities, but it is fair to say that others still have some way to go on that journey—certainly in terms of the level of engagement.

Good practice has put stakeholders at the centre of planning and decision making. Stakeholder engagement should certainly never be seen as just a method of communicating decisions that have been made by others. That is not in the spirit of what was intended. I would be the first to acknowledge that the situation is still work in progress.

The Health and Social Care Alliance is an important partner in working to build the capacity of communities and third sector organisations on the integration agenda. When Parliament passed the legislation on integration, it considered carefully some of the structural issues. For example, there was a long debate about the voting rights of individual board members. The conclusion was that it was proper for voting rights on use of such significant public budgets to be held only by board members who are publicly accountable—in other words, elected council members and non-executive members of health boards.

That is important, but it should not mean that the role of stakeholders is limited to acting as a communication channel for decisions that have been made by others. That is not the intention or the spirit of the legislation. As the legislation lays out in considerable detail, it is extremely important that integration joint boards engage fully with stakeholders and partners. That was made very clear. It is also important that third sector partners, which can be a disparate range of organisations, organise themselves effectively to engage in the process. A lot of work has been done, a lot of support has been provided and a lot of resources have been put in to ensure that that is the case.

In summary, it is work in progress, but there are some really good examples of good practice. We want to roll out that good practice to help to address some of the less-than-good practice.

Claire Cairns of the Coalition of Carers in Scotland said that there are other barriers to being fully involved in the process, some of which are to do with cash, transport and access to meetings. She said:

“we hope that carers would get all their transport and replacement care costs reimbursed, but that is not always the case. Some carers use their own direct payments when they attend meetings, and that reduces the short breaks that they get for themselves”.—[Official Report, Health and Sport Committee, 25 April 2017; c 3-4.]

Those are other issues that are preventing people from being fully involved. Where should resources and support come from to enable stakeholders to participate fully in local service planning?

Funding is available for third sector interfaces, as we call them—I think that about £8 million has been provided to the end of March 2018.

We expect the integration authorities to ensure that those who participate in the process can do so without detriment, and I would be concerned if that were not the case. We would certainly want to pick that up with the Coalition of Carers, because people are giving of their time and, if they have responsibilities that make it more difficult for them to do that, they should not be disadvantaged.

Geoff Huggins might want to add to that.

We can certainly pick that up with the chief officers. We can work to understand how they are engaging with people in a meaningful way and can act on that basis.

As the cabinet secretary said, more than £8 million is available for third sector interfaces to March next year, and a further £4 million is available to September. Beyond that, we will need to look at how we take that forward.

Can I say something on the first question?

I am sorry—what are the £8 million and the £4 million for?

Those moneys are to support third sector interface organisations to provide local support to the third and voluntary sectors to engage with integration.

Thank you.

A number of those who commented on engagement were national organisations. We have seen the challenges that national organisations with a Scotland-wide remit face in engaging with 31 integration authorities, given what that means in practice. Each chief officer has had multiple applications from many of the organisations to spend time on engagement.

In commissioning local services with local providers, whether those are voluntary or independent, chief officers have to put themselves in a different place by forming strategic partnerships and engaging in different ways to deliver on policies such as the living wage commitment, as we have seen in our work on that area. The experience may be variable, as you say. In particular, the experience of local third and voluntary sector organisations might be different from that of the nationals but, again, that is just part of working through integration.

A key component of integration is the localisation of the agenda—the idea of building services in communities rather than simply building a national idea of what a service is and then rolling it out. The needs of different communities and individuals are very different. It might be helpful to get under the skin of the local experience a bit more, because those experiences will not always be the same as the national experience of an organisation such as Alzheimer Scotland, which is well connected, or the Health and Social Care Alliance Scotland.

I have a quick supplementary question. Cabinet secretary, you referred to integration authorities evolving, which I think we all recognise they are. We took evidence some time ago in which it was noted that the lead agency model in the Highlands took five years to bear fruit. How long do you expect the move to genuine co-production to take?

We want it to happen as quickly as possible. In reality, some integration authorities are already co-producing in the true sense—we have seen a lot of evidence of good practice, some of which has been shared with the committee—while others are still on a journey and will take longer to get there.

Our role and the role of the ministerial strategic group that oversees integration is to share best practice and to push the agenda. We can do that in several ways, including through the provision of guidance and resources, data sharing and extolling the benefits of co-production, but inevitably not all partnerships will move at the same speed towards achieving that aim. The short answer is that it will be done as soon as possible.

Geoff Huggins may want to come in on that.

The other issue is that different challenges require different solutions. For example, I looked at Glasgow’s plan for this year. It is considering the implementation of an assess-to-admit service for Glasgow hospitals whereby people will be assessed at the point at which they present, which will probably not involve co-production other than with staff.

At the same time, however, in some of the work that we are seeing on the ground to tackle isolation and loneliness and to improve people’s access to a wide range of services including leisure and recreation services, a different type of conversation is taking place about how people live their lives. We need to think about that when we apply the idea of co-production rather than see it as the solution to everything. Chief officers—slightly more of them across the rural landscape—are trying to tap into the assets and capabilities in communities and are thinking about how they can use those to support people instead of simply looking at another statutory or independently delivered service. They are thinking differently about how to meet people’s needs, and we are seeing a mix of things out there.

I have a question on timescales. Time is a flexible phenomenon these days. A generation used to be a long time, but that is no longer the case.

You said that the new authorities are still at a very early stage of development. However, we have had two years and then a year of shadowing. What timeframe do you think we need to get all the different integrated authorities up to speed in developing alongside stakeholders?

10:30  

A lot has been achieved in a relatively short space of time, as a new organisation has brought together two large organisations and different cultures. Think about what has been achieved on, for example, the big issue of delayed discharge. About a third of partnerships have got delayed discharges into single figures, which is an enormous achievement in a fairly short space of time. That is a hard data measurement. Reports will come out in the autumn that will show progress across a number of the key outcomes, of which that is one. The reduction of the number of unscheduled hospital admissions is another.

Other things might not be hard data outcomes as such, but we would want to see them captured in the reports—for example, the progress that has been made on things such as the level of co-production and the meaningful involvement of stakeholders in shared decision making.

The issue is how we measure success. The hard data measurement of success will be measurement against the outcomes. However, although a range of other things about the culture and the way in which integration authorities go about their business are not as hard edged, they are just as important. I understand that we expect some of those things to be captured in the reports that will come out in the autumn—is that right, Geoff?

Yes, we expect to see that.

When I have been out talking to chief officers and senior managers, it has been interesting to see how they are thinking about the community and primary and social care landscapes. I have had conversations with a couple of chief officers about their thinking on how a range of different services that are provided by different professionals operate across the landscape.

When I was out a few weeks ago, I asked a chief officer who had previously done the job that they were doing to co-ordinate the landscape. The answer was that nobody had done it, as a social work department managed the social work component, a primary care commissioner managed primary care and a community health commissioner managed the community health aspect. In effect, they were operating down lines in the provision of services. The change is not particularly visible, but we should see the fruits of it as time goes on.

The idea that the chief officers and senior managers are thinking across the landscape about how the different services interact and that they can bring together teams that operate differently because they are no longer subject to the single silo way of seeing things is quite exciting and interesting, but it is not visible unless you get under the skin and talk to people about how different things are. That different way of thinking about things might be covered in a line in a report, but it is of fundamental importance.

There are undoubtedly huge financial pressures on the new authorities. Given those financial pressures, it is clear that, when they make decisions about services, there will be significant service change. How do you envisage public consultation and public engagement happening during that period? Is it fair that those organisations are starting their journey with such financial pressures on them? They will bear the brunt of any kickback from the community, although they largely cannot do anything about the budget that they have been handed.

The total budget under the control of integration authorities covering social care, primary care and unscheduled hospital care is £8.29 billion, and health boards are required to maintain funding at 2016-17 levels. There is also the additional £107 million funding for social care. The global budget is not insignificant—it is a big resource—but the important thing is how it is spent.

On shifting the balance of care, we have been clear with integration authorities—as they have been in their own discussions—about how to make the best use of the collective resources so as to keep people out of hospital by building up community health services with a change in how our services are delivered. For the first time, real inroads are being made into developing services whereby people can avoid ending up in hospital for unscheduled care, which is a very positive development.

The integration authorities are starting life with a significant resource, although I would be the first to acknowledge that, in the financial climate that we all live in, the issue is to ensure that every part of the public sector makes the best use of resources. The aim is a more efficient and effective way of spending resources to keep people out of hospital when they do not need to be there, and we have the best chance of achieving that aim through the new world of integration.

Not everything will be in the domain of major service change. Some changes are about doing things in a different way, developing the community services that are demonstrated to work and have an evidence base to show that they work and prevent people from ending up in hospital. As I say, that is not necessarily in the domain of a major service change.

Where there is major service change, the processes for that are well laid out, and we would expect the public to be fully engaged with that change. We would also expect the public to be fully engaged with some of the new developments. For example, some of the services that are working to keep people out of hospital have come about through the engagement of local communities and the people who receive the services, and we know that they work very efficiently.

One such service is ELSIE—the East Lothian service for integrated care for the elderly. It has been very effective at triage, with people avoiding going anywhere near an acute hospital because of the services that are provided in their home. There has been a lot of public engagement in the testing of those services to ensure that they meet people’s needs and are effective, safe and of good quality.

The committee’s problem lies in identifying whether there has been a shift in the balance of care and whether the actions that are being taken are efficient. It is proving difficult for us to find evidence on that. We have heard about it time and again from different authorities that tell us anecdotally what they are doing, but it is extremely difficult to get them to put figures on things.

I accept that that is difficult and that it is difficult to achieve such a shift. We have been talking about it for many years and, as I said, our best chance of achieving it is through the integration authorities. We have set ourselves ambitious targets for the percentage of spend on community services, which means that the growth in spend will be greater in community health services than in acute services.

There are annual performance reports, and it has been agreed that data will be released to show the shift in spend so that that will be more visible. The resources that the Scottish Government has allocated are going in a direction of travel that will help with the momentum of that, as money is going into primary care, social care and mental health at a higher rate and a faster pace than it is going into acute services.

I acknowledge that, as the convener said, it has been difficult to get the evidence to show the shift through clear, straightforward reporting. We are doing a lot of work with the NHS and the integration authorities to work out how we can start to see the shifts coming through—and not just in funding and the direction of funding. The feedback is that there is now more clarity about the direction that the cabinet secretary mentioned, and we need to see that flow through in expenditure.

From 2017-18 onwards, we will examine closely spend in the acute sector, in primary care and in community care. That will involve looking at areas such as prescribing so that we can understand the situation when we start to see the shift and can assess whether it is happening at the level that we would expect it to happen on an annual basis.

I agree that much of the current evidence involves what people say is happening, but I expect to have more clarity from 2017-18.

Much of that is assertion.

It is asserted through funding, if I can put it that way.

It is an assertion that the shift is happening, and it is an assertion that it will make things better and more efficient. We do not have evidence that the shift is actually happening.

We have some evidence. If I can clarify—

Just a moment. Probably all of us around this table—in fact, probably all of us in this Parliament—think that shifting the balance of care is the right way to go. The problem is that we do not have evidence to show that it is working.

We have set up a couple of things to enable us to make it work. Doing things such as giving direction on maintaining spend is more than just making an assertion. Maintaining spend on health and social care integration means that we expect it to flow through in the financial year. How that needs to be managed to deliver the shift in the balance of care means that some shifts will be required in the current year. It is more than assertion: that is happening. Money is being put into primary care and investment is being made in new models, and that money will be spent in those areas—it will not be spent in the acute sector.

There are sufficient building blocks to enable the shift to take place. Through 2017-18, we will see the extent of expenditure in those areas and the exact value of it. That is not just an assertion. There has been enough of a shift in the direction of funding, and that is what I am trying to distinguish.

The money can be shifted, but we do not know whether it is being used more effectively.

We have set the ambition that, by 2021-22, we expect more than 50 per cent of front-line spending to be on community health services. You are right, however, in saying that budgets can be set—we see the budgets that are being set this year moving in that direction—but we need to track the actual spend. That is the bit that needs to follow, and we are acutely aware of that.

I return to the vexed issue of care home closures and public engagement. I know that Mr Huggins will be aware of several closures in Argyll and Bute, where feelings ran so high that a petition on the closures came first to the Public Petitions Committee and then this committee. We are all well aware of the issues: often there is a sense that decisions are predetermined, that consultation is superficial and that information is lacking.

To be fair to the IJB, I think that it will take lessons on board, but there remains a gap between the buzz words of “locality planning” and “co-production” and what is actually happening on the ground, where the fact is that there just is not the public support that we all want for the changes, if they are right, correct and need to be made.

A witness who gave evidence to this committee spoke about a real culture change. My fear is that although of course integration will take time, things are moving very slowly. How do we achieve the culture change that must happen?

I will answer this with Geoff Huggins, who has been far closer to the issue than I have and has spent a fair bit of time in Argyll and Bute meeting those who have been directly involved.

Even if an integration authority believes that what it is putting forward is the right thing, it is important that that is explained properly and that time is taken to go out and properly consult, not just say, “This is what we’re doing. Take it or leave it.” More important than that is that time must be taken to demonstrate what the new replacement services actually are. To be honest, health boards have not always been as good at doing that as they could be, so integration authorities need to look at best practice for demonstrating what new services will look and feel like for those who receive them.

It is right that the integration authority has taken more time to look at the proposals. Clearly, there are difficulties with service provision in the care home sector in that area.

Geoff, do you want to say a little bit about your involvement?

10:45  

We are talking particularly about some of the services in Campbeltown, are we not?

And Dunoon.

Campbeltown is particularly interesting. What we have there is a care home that is significantly underoccupied. When I was last here talking about it, something like 12 or 13 of its 30 places were occupied. There were significant issues with the home’s ability to have appropriate staff in place because of issues with recruiting in the area and the poor ratings that the home had received previously.

In other circumstances, the care home operators would probably have simply given notice to quit and indicated that they intended to close the home, which would have passed the problem to the integration authority, which would have had to find housing in the area for the 12 or 13 people in the home. That was clearly undesirable for all parties, because it would have required the people, who were from Campbeltown, to be moved away to receive care elsewhere. The integration authority in that space stepped in to have a conversation about how it could find a solution that better met the needs of the people in Campbeltown.

That is the point at which things became difficult. The solution that was initially seen as desirable was to find 17 more people to go into residential care in Campbeltown and occupy the home, making it value for money. Now, in the same way that we have a desire to shift the balance from hospital to community, we have a desire to shift the balance from residential care to care at home. In that context, the idea that we would simply increase the amount of residential care that is being offered in an area was not particularly desirable.

We have worked through the process with the partnership, but some of the public expectations were not in the same space as the expectations from the Parliament of more community care. In that case, there was an expectation of more residential care, and that had to be worked through.

We have identified a solution. With the assistance of the council, the council leader and the local member of the Scottish Parliament, the partnership worked through the process to identify how to resolve the issues in Campbeltown and find an appropriate solution that meets the needs of people who live there while not requiring people to transfer externally.

The change that we had was that, rather than simply having a notice to quit, there was a process that resolved the situation. There was some trickiness, in that people had different views, but that is part of the process. I do not think that effective and constructive engagement will mean that every time that something happens, people will say, “That is great. We’re doing it.” There will continue to be a need to work through different views. We have to be careful not to say that working through different views and perspectives means that engagement is not working. In the end, engagement has worked in Campbeltown.

To be fair, a temporary resolution was achieved over the course of a year.

I was actually more interested in a slightly higher level. This demonstrates to me that engagement with communities has to be meaningful, and I do not think that it has been in these cases. What happens is that the public hear that their local care home is closing and there is a media campaign and so on. That does not work for anyone, to be frank. I am interested to hear about the lessons that can be learnt from such experiences and how we effect the culture change that we all accept requires to take place.

The main thing would probably be earlier engagement. Sometimes things happen. Sometimes a care home, or whatever, will find itself in difficulty and that can have a range of knock-on effects and triggers.

It is about trying to have early engagement when there is a foreseeable problem, and to do it in a way that is not about dealing with a crisis. The process that we have just been talking about took time, but it was important to take that time to reach a better solution.

Whether it be the private, public or voluntary sector, it is important to have early discussion about potential issues and problems in a way that is not about responding to a crisis.

The other thing that came out of the experience was a move away from seeing the change process as being about individual components of the overall service. The more general conversation that we have been having with Argyll and Bute is about thinking about how services are applied across geographies. When we are talking about a unit or particular component of the service, the community and the public do not get the full picture of how a range of changes will effectively provide a better, more cost-effective, sustainable or deliverable service over time.

Part of the learning that we have taken from Argyll and Bute was about the context—for example, the home that we are talking about was one of two homes in the area. Some of the issues also related to how more people might be employed to work in the care-at-home sector rather than in the residential sector, and also about the quality and nature of training and upskilling in the area. A series of things took the solution from being simply about the one particular property to being about the wider environment. We are using that learning elsewhere.

Another issue was the importance of earlier engagement with elected members, including MSPs, because, to be fair, they are the ones who will tend to have the impetus to campaign to retain something. That appears to be something that is common across the piece, and there is a challenge around making the case against such campaigns in that situation.

With regard to changes in medical or clinical care, should medical professionals have a greater role in stakeholder engagement? Would that be helpful?

I think clinical voices are really important in explaining why decisions are made on, for example, patient safety grounds. The best voices to explain that are the clinical voices. When service changes are proposed, clinical voices—not just medical voices but the voices of everyone who will be delivering the services across the piece—are an important component of that because they can explain how services will be delivered in a different and, in many cases, better way. For example, if a service is to be delivered in the community through primary care or community health services that had previously been delivered in a different way, it is important that the public are assured about the quality of that service, and those who will be delivering the service are often the most powerful voices in terms of explaining what that will look and feel like. We do not always use those voices as well as we could. It is important that those voices are heard, along with others.

This is where I think that some of the problems arise with regard to the realistic medicine agenda, because I think that some people in the community might be willing to put up with a lesser service that is local, rather than a centralised service that is better in the eyes of clinicians. From the point of view of patients and the public, that approach is also realistic medicine. That is part of the dilemma of the agenda that is being put forward.

Those tensions are inevitable. I argue strongly that, often, the services that are being developed will be of better quality, and that that should always be the driving force. Again, it depends on the kind of service that we are talking about. If we are talking about a procedure that someone receives once or twice in a lifetime, the arguments are different from those about a procedure that somebody needs on a weekly basis—you can see the difficulties involved in someone having to travel further, for example.

What the realistic medicine approach says, alongside the national clinical strategy, is that we have the opportunity to deliver a lot of services more locally if we get the approach right, with a lot of services being delivered within primary care and community health services in a way that avoids people having to travel to the hospital. For example, a lot of diabetic care that people previously had to travel to hospital to receive is now delivered within the local community health services. There is a two-way process, but we have to explain the rationale and what the service will look like far better than we do at the moment.

We have a number of questions on budget issues, so we will move on to that. Colin Smyth will ask the first one.

Local authorities set a balanced budget by a certain date and identify specifically where savings will come from for the year ahead. Obviously, a large part of what previously went into council budgets now goes into the budgets of IJBs.

A number of IJBs have still not set a budget for the year ahead, and a number have set budgets with savings targets but no detail on how they will meet those targets. Is that satisfactory? Why are IJBs having difficulty in identifying their savings if they are simply efficiency savings?

I reiterate that we are talking about a total of £8.2 billion of resources being at the disposal of the integration authorities. Sometimes it is important to focus on the pot of money that is to be spent rather than just on the efficiency savings that require to be made.

I will make a couple of points about the budget-setting process. First, it is a lot better, as a lot of progress has been made on last year in terms of timeframes and the number of budgets that have been successfully set. Some issues remain. For example, for the six partnerships in the NHS Greater Glasgow and Clyde area, there remains a legacy issue—of, I think, £7.8 million of non-recurring funding—to be resolved from 2016-17. To put that in some context, I note that those authorities have about £2 billion to spend between them, so they are looking at £7.8 million out of £2 billion. The issue remains, but it is being resolved. There are positive discussions and I am confident that, with support from the Scottish Government, the authorities will deliver a resolution very soon.

The only other one is the Fife partnership, where there are issues around the set-aside budget. Again, those are being worked through and I am confident that they will be resolved. That is a significant improvement from 2016-17, when 11 of the 31 IJBs had agreed a budget by the end of April. We are now in a position in which they have all done that, bar the seven that I mentioned, and those seven are working through the issues that they have to work through.

The public sector as a whole, including local authorities and health boards, is used to delivering efficiency savings and has done so for many years. We are asking the integration authorities to deliver 3.5 per cent efficiency savings. Again, I note that we expect them to use the opportunity to reform and deliver service changes in terms of both shifting the balance of care and how they prioritise and resource services to shift that balance, keeping people out of hospital and reducing unscheduled care admissions to hospital. We are confident that the plans that the integration authorities are developing will deliver that direction of travel.

Cabinet secretary, you made no reference to those IJBs that have set budgets that include savings targets, but have no detail whatsoever as to how they will meet even part of those targets. They simply have figures in their budgets. Why are those IJBs, having set a budget, unable to identify savings, if they are simply efficiency savings?

Some of the savings that the integration authorities will deliver will be in-year savings, and they will work through those as they progress. Christine McLaughlin is closer to the finance officers who are working through those budgets, so she can say something about that, but we are confident that the integration authorities will deliver those savings, some of which will be in-year savings.

One factor is that the NHS does not treat the years as being entirely stand-alone. It is a rolling programme of savings. If we look at the history, even over the past three or four years, we see that there is always a component of one-off savings as well as the efficiency savings that Colin Smyth mentioned, which arise when people make changes to a service, and which they will have on a recurring basis. Typically, that has run at anything from a quarter to a third of the total savings.

The situation is not new and, if we look at the history, we see that health boards have been able to achieve those savings in-year. However, it is in the nature of the way in which services and budgets are defined that there can be swings, with in-year pressures in some areas and other areas where the actual expenditure improves on the budgets that were set, given that the budgets are targets that people set at the beginning of the year.

It is important to see it in that context. I do not think that any integration authority is in the position of having no plans to back up the savings that they have identified. However, it is not uncommon for savings not to be completely and fully identified at the beginning of the year. Of itself, that is not an indicator that there will not be balance, but it does mean that more in-year work will be needed to identify the savings. We focus our efforts on understanding the extent to which there is a level of risk with those unidentified savings. We also work hard on looking at where national or regional actions can be taken, beyond the boundaries of an individual integration authority, NHS board or local authority.

11:00  

Can we look at the process that IJBs follow when budgets are set? The theory behind the budget setting process is that IJBs agree a strategic plan, identify what resources are required to meet that plan and align resources to outcomes. However, what happens in practice is that local authorities and health boards decide how much they will give to the IJB and then the IJB decides what it is going to spend that money on. Is that a satisfactory process? How would you improve it?

The process has improved over the past year. A lot of work has been done through providing guidance on the issues that were raised concerning the budget setting process last year, and Christine McLaughlin has worked very closely with finance officers to get the budget setting process more into the former than the latter approach.

There is definitely evidence that integration authorities are more engaged with the NHS boards and local authorities through their chief officers and chief finance officers as part of the budget setting process. Because we set a clear direction at the beginning of this financial year about the need to maintain spend, that took away a lot of the negotiation that there was in the first year. It was one of the most positively received steps in the development of the 2017-18 budget, because it removed the negotiation about taking off an efficiency saving before handing over a budget to the integration authority. We said very clearly that we expected the minimum spend to be the same in cash terms as it was in 2016-17, and my view is that that took away a lot of what we saw in that first year.

The other thing that we are seeing is the interdependencies between integration authorities and the residual NHS services. The expectation in 2017-18 is a reduction in unscheduled care; that is clearly signalled in the delivery plan. However, we do not want the integration authority to take decisions without proper and full discussion with the residual health board. We cannot simply say to the chief executive of NHS Lothian, “By the way, we are going to give you 20 per cent less this year. Can you just get on and sort that out? We are not going to tell you how to manage your demand.” They have to work through the complexities of their interdependencies, because the decisions that are made by the integration authority have implications for the NHS board in respect of other services that are provided within a hospital. Also, they need to have confidence that, if there is an intention to reduce attendances or admissions, it can be sustained across the year. Resolving all those issues before the start of the financial year is probably beyond either boards or integration authorities; it requires a continuing conversation through the year. It is important to see it in that way.

We are still working through the process of moving beyond seeing resources as continuing to be earmarked on the basis of their historical source or what they were previously allocated for. We had a conversation the last time that we came to the committee about the expectations from different interests—for example, that money that used to be spent on pharmacy will continue to be spent on pharmacy. As part of the process of change we are seeing conversations that go beyond simply finding an efficiency, which is doing something faster or cheaper, to deciding what we might do less of or where failure demand can be taken out of the system. We are also seeing different styles of solution going into the process.

Where we are this year in respect of efficiencies is not that different from where we were last year—

It is a problem.

—but the consequence was that, during last year, the efficiencies were delivered. We reached the end of the year in the financial state in the integration landscape that we had wanted to reach. That shows that, rather than artificially pretending that all the issues can be resolved before the financial year starts, resolving some of the issues and continuing to work through the others has been an effective methodology.

I think that it is fair to say that a lot of the savings, which were made very late in the day, are non-recurring savings.

I want to return to my initial point. In what way do you see improvements being made? For example, an issue that was raised was that it was okay to put in a figure for savings without identifying when those will be made, because the budget is decided annually. Why do we not allow IJBs and local authorities to have three-year budgets? The Government sets a three-year budget, so it has certainty and it can set out the budget over a longer period. Why are we not moving in that direction?

How else do you see the budget process improving? You talk about giving IJBs more certainty by defining by how much local authorities can cut the budget allocation to them and where the £107 million, for example, goes to. Does that mean that you see more central direction being given to IJBs on how they set their budgets?

On three-year budget setting, we will continue to have discussions about how we can give longer-term certainty. To be blunt, there have been challenges because of the whole Scottish budget setting process. The allocation from the United Kingdom Government was late, which had knock-on consequences for the Scottish Government’s budget setting timeframe. That had a knock-on effect on those who receive resources.

Your point about looking to a longer-term timeframe is not unreasonable. That is something that we would want to do; it is an issue that we continue to discuss with partners.

We are moving to a longer time period. Part of the guidance is about moving to a rolling three-year cycle with integration authorities, which is not dissimilar to the situation in the NHS. It is similar with local authorities, too—they set a rolling budget for a longer period, although it is always the first year that is their real target budget, with the expectation that years 2 and 3 would be refined as they go. That is the direction in which we are headed. Part of the balance concerns the extent to which the Scottish Government can make clear assumptions about the high-level funding that is available. The way that we do that with the NHS is that we agree on a reasonable set of assumptions, to which it works.

It is not unreasonable to have a three-year rolling budget for integration authorities, but we all need to recognise that there will be changes to years 2 and 3 as the budget process moves forward. The more we see of that approach, the better it will be for everyone.

We have good working relationships with the integration authorities, and not just with the chief finance officers; we take feedback from them. It is in our gift to give more or less direction, when it is helpful to do so. I would like to hear back from the integration authorities about what they consider to be obstacles to good, longer-term planning and on the areas in which there could be improvements. We will take on board those views as we develop the budget for 2018-19.

Nothing really significant has been raised with me, other than the extent to which we can give greater certainty about funding from the Scottish Government. We will continue to work with integration authorities on the basis of reasonable assumptions as we go through that process.

This will be your final point, Colin.

The cabinet secretary will not be surprised that it is on the issue of the living wage. Are we yet in a position in which people who carry out sleepover shifts are being paid the real living wage, or are IJBs and local authorities simply adhering to Her Majesty’s Revenue and Customs guidance on the national living wage?

We have given a commitment that, during this financial year, sleepover rates will be paid at the real living wage level, but work is on-going—as I am sure that you are aware—on some of the related complexities with service providers. Some of the service providers have made the point that we need to take time to enable them to make what are, in some circumstances, fundamental changes to how services are delivered. They were concerned about services potentially falling over if that time was not taken.

That is why, along with the Convention of Scottish Local Authorities and the service providers, we have taken a cautious, planned and careful approach to delivering the living wage for sleepovers, which will be delivered during 2017-18; we want to ensure not only that the move does not impact on service providers but, more important, that it does not impact on the service users who rely on the services.

Do you want to add anything, Geoff?

Yes. The work that we have done on the living wage and on sleepovers has revealed a lot that we had perhaps not been aware of about the structure of the system and the differentials in different areas of the country. For a start, we had not been entirely aware of the number of people who were subject to sleepovers or the structure of their care packages. As a result, some of our work with partners, chief officers and others has been on whether in some places the service models are actually the best that can be used, whether sleepovers are being used inappropriately or whether they can be used to deliver a better quality of service. We have therefore put in place a change programme that is looking at appropriate service models and the use of technology, and which is seeking to ensure that those for whom sleepovers are the most appropriate approach get a quality service in that respect.

As we have worked through the implications of paying the £8.45 rate for sleepovers, certain questions have arisen. For example, we think that it might be more difficult to recruit people to do work during waking hours if we are prepared to pay people £8.45 an hour to be available for sleepovers. That could lead to recruitment issues. Again, we are working through with providers our understanding of those challenges, but the problem is that, each time we think that we have resolved an issue, some other challenge develops.

Nevertheless, we will continue to do the work. We have said that we will come back with outcomes later in the year. We will look for a result that meets the commitment in question and the needs of provider organisations and people, but which works within the integrated landscape and the wider social care reform process.

We have put resources aside for this, and we have left the door open for additional resources to be provided if the current resources are shown not to be adequate in meeting the commitment that has been made. Those discussions are on-going.

I presume that, if we are being realistic, the £10 million that has been allocated will not be sufficient to pay the real living wage.

That work is on-going, but we have said that if it is not sufficient, more resources will be made available. Part of the work that Geoff Huggins has described has focused on the financial costings. The £10 million was a starting point based on certain assumptions, but as Geoff has said, the complexity that has arisen as more work has been carried out on the issue will guide us as to whether those assumptions were or were not accurate. However, the door has been left open for additional resources to be provided, should they be required.

I think that that was part of the reason for the structure of the arrangement for 2017-18. When we tried to unpick the data to identify the marginal cost, things became quite complex not just because of some of the initial work that had gone into meeting HMRC requirements, but because of different expectations with regard to the structure of the service and our ability simply to cost and evaluate the difference between what had almost been single-payment packages of perhaps £35 to £40 a night and what those would have been when converted to an hourly rate. When we came into this year, the data looked distinctly fragile with regard to our ability to say, “It will cost this amount to deliver the 2016-17 service in 2017-18 at a sleepover rate of £8.45 an hour.” There are so many moving parts that it is actually quite difficult to assess the full cost. In practical terms, it might be that the allocation for 2017-18 is sufficient, but that will make 2018-19 difficult in turn.

When you have done that work and achieved a result, can you write to the committee to advise us of that?

Absolutely.

That would be helpful.

I would like to raise a small point. Children’s services are not covered by IJBs at the moment, but is any work being done to include them in the future? What impact might there be on such services as a result of the pressures that we have heard about on adult services?

Some IJBs cover children’s services—I think that the figure is about a third. Is that right?

Nearly all integration authorities have children’s health services, because by and large they are provided through primary care services, and a third have social care services. It is a mixed rather than a single picture.

Yes, and I think that we would want to work with the integration authorities and certainly in the ministerial strategic group to look at what have been the benefits and, I guess, the downsides of including children’s services. If there are advantages of including children’s services and those are clearly demonstrated, we would want to evidence that and look at what lessons there might be for the authorities that currently do not do that. We have not mandated that approach; we want to continue to look at the relative benefits of including children’s services.

11:15  

What sort of timetable are we talking about for that?

The analysis is on-going. We will look at the annual reports that integration authorities will submit in the autumn and, for those that have children’s services, we will do an analysis of the benefits. We will probably do that through the MSG.

Miles Briggs asked about financial pressures. It is instructive that, in the areas where children’s services are included, there have probably been additional financial pressures on the children’s side, which have then squeezed the services for adults and the elderly. A number of integration authorities where children’s services are included have had to find additional resources from elsewhere in the budget to support services for things such as learning disability and autism. We have to see this as a set of issues that flow both ways.

Yesterday, we had a conversation between officials about the integration of children’s services. The issue is complex because, although people are generally in favour of integration, many areas are thinking about integration between children’s services and education rather than between children’s services and health. There is a question as to whether the Parliament or the Government wants to mandate a template or to allow for continued local decisions on the best way to structure that, but with a general commitment to working across boundaries—whether service-level or geographical boundaries—to get better value and be more effective. We are seeing a number of dynamics. It is seductive to see the issue just from our perspective in health, but other people are looking at the question through a completely different lens.

On 30 May, we had a discussion about the distinction between efficiency savings and cuts, and Ms McLaughlin will recall the exchange that we had previously on that. In that session, Keith Redpath from West Dunbartonshire health and social care partnership said:

“There may be some aspects of efficiency and doing things a bit better that mitigate some of that, but the reality is that most people would recognise that as a potential cut to the level of service. That is why I used the term ‘cuts’.”

Katy Lewis from Dumfries and Galloway health and social care partnership said:

“There will be some things that we do that you might want to describe as cuts or budget reductions.”

Karl Williamson from Shetland health and social care partnership said:

“as budgets keep getting reduced, we might get to the position where we need to make cuts and reduce services.”—[Official Report, Health and Sport Committee, 30 May 2017; c 22-3.]

We have discussed the thesaurus that is used by chief officers in Scotland—some say “cuts”, some say “efficiencies” and some say “savings”. Do you now recognise the comments from those chief officers that cuts are being made?

Well—

Sorry, but I am asking Ms McLaughlin first.

The overall budget is increasing and not reducing, so there are not cuts overall to health and social care. That is the point that we are trying to make.

Do you recognise what is being said by chief officers who are on the ground operating budgets? They say that they are having to make what they call cuts in their services.

They are having to move money around the system and the money has to go further than it has before. That is what I recognise.

You cannot bring yourself to say that there are cuts in services.

I have tried to answer your question as transparently as I can.

No, I—

Convener, if all budgets stay the same in every line, there will be no change. Change is required, and that will mean—

No one is arguing about change. We are arguing about people being up front with the committee. Senior officers have told us that, on the ground, cuts are being made. There seems to be a gulf between what they are saying is happening on the ground in our communities, which is what our constituents are seeing day in and day out, and what people at Government level and senior civil servants are willing to accept. Why cannot we just accept that this is going on in our communities?

It is because the situation is not as black and white as that.

It is, according to those senior officers.

Some budgets are increasing and some services are having more money spent on them. If you look at primary and community health services, you will see that more money is going to be spent in primary care. However, there might be other services where there is less money.

If all budgets stay the same and there is no shift of money, you will not see a shift in the balance of care. By definition, some budgets will be reduced and some will increase. Efficiency savings are used, in a way, to drive that change by ensuring that resources are freed up to be invested in the priority areas; otherwise, nothing will change.

These are not efficiency savings. We are being told that they are cuts to services.

Some services will be reduced and some funding for services will be reduced, but other services will have increases in funding.

So some services will be cut.

If we are going to change services and put more money into some services—as per the whole discussion that we have had for the last hour and a half and which everybody has agreed is a good thing—it is clear that other things will have to change and be reduced. You cannot spend the same amount of money on everything and therefore prioritise nothing. Some things will have to change and have less money spent on them so that more money can be spent on other things. Therefore, the priorities of community health services and primary care will see more money being spent on them, but other areas will see less money being spent on them.

That will have an impact on people who use the services on the ground.

People will see their services being delivered in a different way. Fewer people will have to go to hospital because more money is being spent on primary and community services. That is a good thing—people going to hospital less because their services are provided in the community is better for patients. That is why that is the direction of travel. We want to make services better, not worse, but that requires us to keep people out of hospital, in the community and in their own homes for as long as possible. People will receive their services in a different but better way—I do not agree that that will be detrimental to their services.

Of course, time will tell on whether it is better or worse.

Of course.

As no one else has any final points to make, I thank the cabinet secretary and her officials very much for their attendance.

11:21 Meeting suspended.  

11:25 On resuming—