Health and Sport Committee

Meeting date: Tuesday, May 15, 2018

Official Report 557KB pdf

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Scrutiny of NHS Boards (NHS Ayrshire and Arran)

I welcome to the committee Dr Martin Cheyne, chairman; John Burns, chief executive; and Derek Lindsay, director of finance, from NHS Ayrshire and Arran. Agenda item 3 is part of our scrutiny of NHS boards. It follows up on a previous committee appearance by representatives of NHS Ayrshire and Arran, and some correspondence between the committee and the board.

We are keen to hear from you in person in order to understand more fully the position with regard to brokerage and your finances. The upshot of the correspondence between us over the past few months is that the Scottish Government has advised you to return to financial balance and then to consider how to repay the £23 million brokerage that was obtained for the financial year. Although the Scottish Government is entitled to give such advice, it is public money, so we are anxious to know how far your thoughts have gone on the question of how and when you hope to repay the loan.

I have not prepared a long opening statement, given the shortage of time this morning. If you are content, convener, we could just go straight into the question-and-answer session.

That was my first question. What is your timeframe? When do you expect to begin repaying the loan from the Scottish Government in relation to the financial year just gone?

We have started a process with a number of activities—I will ask the chief executive to go into some detail in a second. Clearly, achieving financial balance within a year will be difficult, and there will be short, medium and long-term plans. We can go into that in some detail to enable the committee to understand what we will achieve. As a board, we have had two very long workshops in recent weeks to discuss the revenue plans for this and future financial years. A great deal of work is being done to try to break down into workstreams what we need to do to get to the point of financial balance. If I may, convener, I will hand over to the chief exec.

We have had discussions with our colleagues in St Andrew’s house; we will introduce a three-year plan to address the challenges that we face, recognising that, although we can continue with short-term initiatives and actions, some of the more transformational changes will take more than one year.

I understand that brokerage has not been required by NHS Ayrshire and Arran in the past. Therefore, I am interested in your view as to why brokerage of this scale was required in the year just gone.

I will pick up that point. As you say, convener, NHS Ayrshire and Arran has not had brokerage before. We have worked hard to deliver within the resource limits that are provided. However, in 2016-17, we started to see some pressures on our system in relation to increasing demand for unscheduled care and increasing difficulty in recruiting to some key medical posts. Those two elements demonstrated pressure on the system.

We recognised that we needed to work with our health and social care partnerships—we work well together in Ayrshire and Arran—to redesign how we meet the growing need for unscheduled care. Ayrshire has had high levels of use of unscheduled care services, and we recognised that we needed to do further work to redesign the services, in addition to work that had already taken place. For example, we had just opened a new assessment unit.

The second area was medical vacancies. We took the view that we had to bring in locum medical staff to ensure that we maintained safe services for the population, while trying to review how we would recruit to those often hard-to-fill posts and redesign some workforce roles in Ayrshire—for example, doctors in training grades—where we thought that we might not be able to fill all the gaps.

You described discussions at St Andrew’s house with Scottish Government officials about a three-year financial plan. Is that a plan for achieving financial balance in three years, or for repaying this year’s brokerage in three years?

The discussions were about delivering a balance in three years and repaying the brokerage beyond that point.

Essentially, your expectation is that you will require further brokerage over the two following years.

It is regrettable, but we believe that that will be the case.

You have outlined plans to close the cancer centre in Ayr and amalgamate it with the one at Crosshouse near Kilmarnock. I have had a lot of mail about that from a patient care perspective, as you might imagine. For example, someone who lives in Ballantrae will have a journey of more than three hours to get their cancer treatment and then a three-hour journey back. Even if someone drives, you know as well as I do that the parking facilities are inadequate. Was that considered in making the decision? I know that the plan is to have four outlying hubs in the community, but can you deliver those in your current financial situation? The simple question is whether the decision was based on patient care or was basically financial.

11:45  

The decision has not been taken yet: it is still a proposal. Since we met the committee in December, we have been discussing with our colleagues in the west of Scotland regional cancer network how we will shape the delivery of chemotherapy services in the future. The west of Scotland work, which is progressing, would use the hub model that Brian Whittle described. It is about delivering the right care to patients and recognising the complexity of some of the treatments, but trying to deliver care as locally as possible. We will work with colleagues in the regional cancer network to determine the best way to deliver chemotherapy services in Ayrshire, recognising the points that you have made. However, the drive is absolutely not about efficiency—it is not about saving money. It is about delivering the right care and the best care that we can to patients in Ayrshire.

What cognisance is taken of the public transport infrastructure for patients in what is a very wide area? Especially if we take Ayr out of it, the south of Scotland transport infrastructure for getting to Crosshouse is particularly difficult. How are you proposing to deal with that?

That will need to be part of the on-going dialogue about any future changes. We will engage appropriately with patients and our communities, and the most appropriate way to do that is to work with the evidence and medical advice about how best to meet the needs of our population in Ayrshire.

If we can deliver the model it might, subject to clinical priorities and pathways, allow us over time to repatriate some chemotherapy to Ayrshire for individuals who currently go to Glasgow. There are wider benefits, but we need to be clear about the benefits in relation to the west of Scotland model and how the service can be properly delivered in Ayrshire, while recognising your points and the transport issues that exist. There is still work to do.

How will you consult the general public, and when do you expect to respond to the consultation?

I expect us to have a better understanding of the west of Scotland regional cancer chemotherapy model by late June, given the discussions that we have had to date. There is a regional dimension to how we will take that forward, but I want to have clear and proper engagement with patients, staff and our community about why change needs to take place, what the benefits of that change would be and how we can deliver it in a way that tries to address the concerns of our patients, population and staff, where we can.

As you are aware, there was a Healthcare Improvement Scotland review into the neonatal unit at Crosshouse hospital. On the back of that, 24 staff were brought into the neonatal unit. If the unit was 24 staff short, which you must have known, that suggests a system under financial pressure. I do not think that you budgeted for the money that is now being spent. What kind of financial pressure are you under? The fact that that patient service was missing from Crosshouse is a financial issue.

We invested in nursing staff in 2016-17, including in the maternity unit. We made those decisions in advance of the Healthcare Improvement Scotland review, and they were based on the nursing workforce tools and the reviews that our nurse director had carried out. The board considered that advice and, given the evidence that was presented, we felt that it was right and proper that we invested staff in the maternity unit, which we did.

My point is that, if you were 24 staff short in the first instance, there was financial pressure, which is now evidenced by the fact that you are £20 million in the red. We are trying to establish whether, within the financial management of what you are doing just now, you have enough money. Are you getting enough money, and how are you managing to redistribute those finances to get the best possible patient care outcomes?

Our focus is on delivering within the funds that we have, and we have clearly not managed that, otherwise we would not have brokerage. There are two immediate threads, the first of which is the short-term immediate changes that we can make in the areas that you would expect us to be looking at around procurement and efficient and effective prescribing. We are also looking at our workforce costs to make sure that we are reducing our reliance on and use of agency and locum spend where we can, to bring those exceptional costs down.

However, we recognise that that is not enough in itself, and that we need to look at how we could change our service model. A number of activities are under way, one of which is in unscheduled care. We are looking at our out-patient services in order to eradicate any waste or unwarranted variation in our processes and to make them as efficient as they can be. We are also looking at how we utilise our estate.

There are a number of workstreams and threads under way, both with a short-term focus on 2018-19 and with a focus on 2018-19, 2019-20 and 2020-21.

Are any other units in Ayrshire and Arran in the same situation as the neonatal unit in Crosshouse was? Do any similar situations need to be addressed?

There is nothing on our radar. For the nursing workforce, we have workforce tools—we have just had a review and we are awaiting the findings of that. We have invested in our nursing workforce and we are looking closely at workforce costs. We do not see anything immediate that we have not included in our planning.

I have a quick supplementary question about cancer pathways and regionalisation. We have the same issues when people go from Stranraer to Edinburgh for their cancer care. I am aware of the regional review and I am interested in whether evidence of any link between travel times and increased mortality is part of the considerations.

I have been asked to look at evidence relating to travel times and mortality. I know that some chemo can be given orally, which makes it easier to give more treatments locally. For some chemo treatments, people have to remain for four hours post-chemo, and sometimes even longer. Some chemo is given via central venous access and some is given through intravenous therapy. There are loads of different ways in which chemo is given, which will be a factor in the decision. However, I am curious about whether an increase in travel time causes an increase in mortality.

I do not have the information to answer that question. It is not a matter that I have looked at. We will review all the evidence that comes from the west of Scotland work in considering how we deliver those services, recognising the different ways in which we can now deliver chemotherapy services to the population. However, I do not have any specifics on that question.

Is there any way of finding out whether travel time impacts on people’s ability to recover or whether outcomes are related to travel times?

I can ask that question of the team who are looking at the issue, and I am happy to provide information on that to the committee.

Thank you.

You have described a three-year plan, and you said that you expect that brokerage will be required in each of the next two years. What scale of brokerage are you contemplating for those years?

The amount of brokerage that will be required will relate to the size of the funding increase that we receive in future years. The Government is planning to publish a medium-term financial plan that will follow on from the UK financial plan, and that is a factor.

At the moment, we have to think about 2018-19. The plan that we submitted in March projected that a potential £20 million would be required for 2018-19. However, that figure will also have to reflect the pay awards. Negotiations on pay are on-going, so we do not yet know what the awards will be or what additional funding we will receive as a result of the consequentials that come to Scotland through Treasury funding for the agenda for change pay awards in England.

There are many contributory factors, but we are in close discussion with the Scottish Government about the different scenarios, and we have said that we expect a lot of those things to be clearer by around the end of May.

When you gave evidence in December, you expected a shortfall of £20 million for the current financial year, and that figure subsequently increased by a further £3 million for reasons that you have described. Should we therefore assume that the figure that you have given us today for this year is really only a provisional starting point rather than a final expectation?

It is a provisional figure. Our discussions with the Scottish Government have recognised the variables. Things such as our prescribing costs are also provisional figures that are based on best estimates, but we hope to be able to firm those up in the near future. Pay is our biggest single cost, so we need to be clear about the funding for and the planned expenditure on pay.

It is interesting to note that, in the December board report, we forecasted a £24.2 million deficit. It is a variable figure and a moving feast at all times. The figure has gone from £24.2 million down to £22.9 million. That is not ideal by any means, but it demonstrates the moveability of the numbers.

Indeed, but when you gave evidence here in the same month, you predicted a deficit of £20 million rather than £24 million.

That is correct, convener. It is a provisional position, and more work is under way in the board. As Derek Lindsay indicated, we have agreed with our colleagues in St Andrew’s house that we will meet them again towards the end of May or at the very beginning of June, when we will set out the next part of the detail of our revenue plan for 2018-19 and the transformational work that we see going into 2019-20 and beyond.

My final question is for the chairman. Is it safe to assume that the issue has been discussed in detail at board level? If so, where does the board believe responsibility lies for the shortfall that you have experienced?

Yes, it has been discussed. Most recently, we have had two four-hour board workshops running from about 4 in the afternoon to 8 in the evening, which have gone through the issue in great depth and detail. We have tried to give the chief executive and his corporate management team a degree of support and direction as to what might be acceptable in moving forward with the budget plan, and we will take that to the board meeting in May. At the moment, we are running on last year’s revenue rolled forward, because we do not have an agreed budget yet. However, I assure you that board members are fully involved in the discussions in a great deal of detail.

That is helpful. You mentioned a board meeting in May and meetings with the Scottish Government towards the end of the month. It would be helpful to the committee if you could let us know the outcome of those meetings with regard to your financial projections.

Convener, I should have declared an interest at the start of this evidence session in that a close family member of mine is a healthcare professional in Ayrshire and Arran NHS Board.

Thank you for putting that on the record. I thank the witnesses for coming and giving evidence.

We will now move into private session to consider the rest of the agenda.

12:00 Meeting continued in private until 12:21.