Health and Sport Committee

Meeting date: Tuesday, September 29, 2020

Official Report 663KB pdf

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Pre-Budget Scrutiny 2021-22

We move on to the second item on our agenda, which is pre-budget scrutiny evidence. This follows our general approach, which as members will recall, was a process recommended by the budget process review group. We have heard from several organisations on budget matters over the last couple of months and, as with our evidence session with NHS 24, much of our other work informs us on budgetary matters.

Last week, we heard from the Minister for Public Health, Sport and Wellbeing, Joe FitzPatrick, who answered a range of questions. This week we will hear from the Cabinet Secretary for Health and Sport. I welcome Jeane Freeman to the committee, along with Richard McCallum, who is interim director of health finance and governance at the Scottish Government.

As before, we will take questions in a pre-arranged order. We will seek to fill in any gaps from our previous evidence and I look forward to the responses. I invite the cabinet secretary to make an opening statement, which I am looking forward to hearing.

Thank you, convener, for your flexibility in accommodating my attendance. As members know, last week’s events and announcements required reprioritisation of time. I thank Joe FitzPatrick for attending last week’s meeting and answering the committee’s questions, in my place.

Before I go further, I give my sincerest thanks to all our NHS and social care staff for the considerable amount of work that they have done, and continue to do, to meet the challenge of the pandemic.

In recent years, we have tried to put our health services on the strongest possible footing, but we need to go further in order to embed a world-class public health system, and we need to sharpen our focus on population health. The pandemic has demonstrated the positive changes that we can make to how and where we deliver healthcare, which we must lock in. By accelerating the transition to a new model of community NHS care, and supporting digitisation of services through facilities such as NHS Near Me, we can ensure that people receive the right care, in the right place and at the right time.

I turn to funding for our health and social care services. While the pandemic has had a massive human cost, it has also come with significant financial implications for our front-line services. It is essential that we have funding in place to meet additional Covid costs. The Government has acted quickly to put in place the necessary infrastructure to support rapid decision making and approval of spend, which is balanced by due governance of public spending.

We agreed to provide initial funding of up to £100 million to ensure sustainability of social care services, and I made it clear to the committee that we would provide the necessary funding across health and social care following the conclusion of our detailed quarter 1 review of expenditure. Now that that review has concluded, I have confirmed this morning to Parliament and the convener that we are making available £1.1 billion for NHS boards and integration authorities. That will provide boards and integration authorities with funding for additional Covid expenditure that has been incurred, and with funding that is necessary for the coming months, including support for remobilisation, social care, our NHS test and protect programme, personal protective equipment and hospital staffing levels. My officials have worked closely with NHS boards, integration authorities and the Convention of Scottish Local Authorities to review the financial implications and to develop the most appropriate funding approach for our health and social care services.

In making the funding available, I will make clear two important points. First, I recognise that Covid costs have had significantly disproportionate impacts on some areas. Our funding takes account of the disproportionate impacts, although we also recognise the need to distribute resource equitably and transparently. I acknowledge that some boards and integration authorities will require support beyond the level that has been confirmed today. I will consider all such requests carefully and will expect them to be properly evidenced.

Secondly, in making today’s funding announcement, I confirm that we will undertake a further substantive funding allocation in January. That will provide the opportunity for us to understand better the implications of Covid across the sector for the remainder of the financial year, and it will ensure that our front-line services continue to have the funding that they require.

On pre-budget scrutiny for 2021-22, it is essential—as, I am sure, the committee will agree—that our health and social care services have the funding certainty that they need for this and future years. As my colleague Kate Forbes made clear last week, achievement of that is being made additionally difficult by the unacceptable position of the Scottish Government and other devolved Administrations in again facing a delayed UK budget. The Scottish budget envelope is tied to the UK block grant and is set by the UK budget and tax policy, so a delayed UK budget creates huge uncertainties for the Scottish budget and our NHS and social care. It is impossible to plan with certainty without that information.

I can assure you, convener, that I will continue to do everything that I can to support our front-line services, to ensure that the necessary funding is provided throughout the pandemic, and to support delivery of a world-class public health system. We have announced £1.1 billion of funding today and have committed to a further substantial funding allocation in January. I hope that the UK Government quickly changes its position, so that in January we can provide our NHS and integration authorities with the certainty that they need for next year and beyond.

All that being said, convener, I am happy to take any questions that you or committee members might have. If I may, I will call on my colleague Richard McCallum for any detail that I might not have immediately to hand.

Thank you, cabinet secretary. That is much appreciated.

I will start with questions on where you finished—the budget for this year and next. You mentioned the delay in the UK budget, but I expect that commitments that you have made on passing on consequentials will remain in place. However, beyond the consequentials of which you are aware and are able to budget for, have you taken any policy decisions on additional funding that might be required in order to maintain the level of services that you have assessed as being essential? If so, what estimate have you made of any potential gap between Barnett consequentials and current and future need?

As, I think, Mr Fitzpatrick explained to the committee last week, we remain in a fluid situation in terms of anticipated demand. For example, we are modelling demand for personal protective equipment for the coming months through to the end of this financial year on the basis of demand in March, April and May. That implies, correctly, that we will continue, through all the channels that we have developed, to supply PPE to our acute settings, primary and social care, and unpaid carers. We will use the distribution routes and channels to pharmacy and so on.

We can model anticipated demand from the Covid pandemic for worst-case and best-case scenarios, and we can calculate spend based on what we have already spent and the £1.1 billion that we have allocated. However, it is more difficult to understand—and to continue to model and remodel—how the behaviour of the pandemic might impact the level of services remobilisation that we require and wish to see. As I said in a statement to Parliament not too long ago, in thinking about how we remobilise the NHS and what the cost of that might be, we need to understand the pressures on the NHS from Covid in terms of admissions to hospital and intensive care units; the impact on primary care and the demand on the NHS from test and protect; and the important flu vaccination programme this year, which is intended to reach a larger number of people than in previous years, through our having added to the cohorts who are eligible.

That is a constant planning exercise in which we reflect on and discuss matters with our boards and the integration authorities. I will speak to some integration authority chief executives later this morning with my colleague Councillor Currie from the Convention of Scottish Local Authorities. That constant planning exercise is determined largely by how far we can move forward with resilience in the system. It is also based on how virus outbreaks play out, our capacity to contain them, and our overall intent in suppressing the virus to prevent community transmission. That might mean that, from time to time, we need to increase further the resource that we put into test and protect beyond what we had originally planned.

11:15  

I am interested to know whether there is any more certainty around another question that was asked last week. The question was about resources moving from areas where there has been lower health provision activity in the course of 2020 to areas where there is and will be higher need. Is it possible to quantify the shift in spend from areas of lower activity to areas of higher activity?

We have been able to do some work on that. Richard McCallum will give you whatever detail we can provide at this time—bearing it in mind that it is not by any means final.

There are two elements. One is about the immediate term; there might be some short-term offsetting savings for health boards. As a result of Covid, boards might not have been able to provide some services as planned, so they will not have incurred some variable costs that would have been associated with those services. As part of the review that we have undertaken with health boards, one of the key things that we are considering is where those offsetting savings are. The committee would expect that, as part of the robust financial governance that we are undertaking.

The second strand concerns the longer-term approach and where shifts might be in the future. We have already started to see a shift in the balance of spend. In some ways, it is too early to say—I know that it is unhelpful to say that, at this stage—but as we go through the next few months and see some more investment being made in the community, we will be in better position to assess how much of that shift has happened, both in the short term and in the medium to long term.

Thank you. Emma—[Inaudible.]

I did not catch what you said there, convener, because there was a loss of signal, but I am assuming that you are asking for my question now.

I am indeed.

Good morning, cabinet secretary. I have a couple of questions about Barnett consequentials. The Scottish Government has indicated that £500 million is to be allocated to health boards in respect of the first quarter of 2020-21. Is that in line with the amounts that are set out in the mobilisation and remobilisation plans that have been submitted by boards, or will some boards receive less than their estimated spend?

The £1.1 billion is distributed to boards largely on the basis of the NHS Scotland resource allocation committee formula, under what Joe FitzPatrick described last week as a hybrid approach. We recognise that some boards—rightly and appropriately—will have incurred higher costs than the NRAC formula would necessarily refund them for. That refers not only to the costs incurred, but to future planned costs.

In working with boards and health and social care partnerships individually, we aim to ensure that boards that have incurred additional costs, beyond what they would receive through the formula, get additional funding, provided that that is properly evidenced, that we have the iterative process of challenge and scrutiny that Mr McCallum and I have described, and that we reach an agreed position with the boards concerned.

Are the Barnett consequentials sufficient to cover the additional expenditure that it is expected will be incurred? If not, how will the gap be funded?

At this point, the Barnett consequentials are £2.5 billion. As I have said, we have allocated £1.1 billion this month as a result of the quarter 1 review and our looking ahead to what we anticipate boards’ cost will be. As I have also said, we will look at the situation again next January. Whether the Barnett consequentials will be sufficient to meet all the additional expenditure is almost an impossible question to answer at this stage. Other parts of Government will have their own views about the impact on their portfolios.

I do not know whether additional consequentials will come. That, in part, will depend on the continuing discussions that we are having with the UK Government and the Treasury on, for example, social care. However, we have been able to use the funding as I have described, and we have been able to hold back some funding that we believe will be needed in January, so that boards can allocate some of the Barnett consequentials to planning for, and being sure that we are prepared for, a second wave, and so that they can use it for other areas, including for PPE, in respect of which we are not clear about the exact final amounts.

Every penny of the Barnett consequentials will be used for health and social care. Whether those pennies will add up to all that we need to spend is not entirely clear. The committee will recall that we gave a clear commitment to the Convention of Scottish Local Authorities to resource social care as needed to meet the Covid challenge. For example, we have introduced the social care staff support fund, we have taken steps on death-in-service benefits for health and social care workers, and we have covered indemnity requirements across those areas. We have taken a number of additional measures that will incur costs, but we have done so because we believe that those were the right things to do.

You have described the situation as being “fluid”. It is obviously a real challenge each day to project and plan any financial processes. An additional issue is that the Westminster Government does not have a budget, or is not proposing to have a budget, that you could work with. I am sure that that is really challenging.

We took evidence on appropriate additional costs. Can you give examples of what those could be? You have already described the additional social care funding.

Appropriate additional costs can range from the cost of PPE to cost of additional staffing. Additional staffing might be required, for example, to allow a service to be delivered, or to accommodate reduced productivity because of the additional level of PPE that staff have to wear, which results in the normal volume of patients that they might otherwise see being reduced. In those cases, we want to increase the number of clinics so that the same volume of patients can still be seen.

Appropriate costs may also include the capital cost of reconfiguring parts of the estate to ensure that we maintain the Covid pathway and Covid-free pathways. That includes establishment of the hubs and the assessment centres, and additional funding for NHS 24 to take on, as it has done so well, the significant additional request that it continue to provide levels of services that cannot be provided face to face. That is particularly applicable to how we have scaled up NHS inform and to how we have used digital to provide a significant range of mental health support to various parts of the community.

Appropriate additional costs cover a range of items that health or social care services might require in order to continue to deliver the best possible services in the face of the on-going pandemic.

What methodology or formula is being used to allocate the initial tranche of funding for quarter 1 of 2020-21? Earlier, you described an NRAC-hybrid approach, which Joe FitzPatrick also described last week. Will that methodology be used for 2020-21 and for future allocations?

The hybrid model is in place in recognition of the fact that the impact of the pandemic has differed for different boards. Some boards have been disproportionately more impacted in responding to the pandemic than others. The NRAC formula exists and is agreed. It provides a degree of equity of allocation so it is the foundation. However, as I said, where boards can evidence that they have additional costs beyond what they will receive through the NRAC formula we will go through the proper process of scrutiny and challenge, led by Mr McCallum, and when we reach a settled position those boards will receive additional funding, over and above the NRAC formula.

For clarity, cabinet secretary, the impression that the committee formed from last week’s evidence was that there would be a consistent methodology to address the issue, but the way that you have described it as deciding what is required beyond NRAC sounds like a case-by-case approach. Is that correct?

Yes, it is, because it recognises that different boards have been impacted in different ways. That inevitably places a greater burden of work on Mr McCallum and his colleagues, but it seemed to us to be the fairest way to address any individual board’s case. The NRAC formula, in and of itself, was insufficient to properly reimburse boards or allow them to plan for the additional costs that Covid was bringing in their direction. We have taken that approach for these figures and I expect that we will take that approach again in January.

Thank you.

I am grateful for the clarity about new Covid spending that has been announced today. It is welcome, especially as the Minister for Public Health, Sport and Wellbeing was unable to answer my questions on it last week. I have to say that, given that the committee has been undertaking pre-budget scrutiny for months and has only just been presented with these new figures, during the meeting, I find the cabinet secretary’s criticisms about not obtaining financial information from the UK Government somewhat ironic.

How have decisions been made on how much to allocate to social care? Were the sums based on an analysis of need or on the Barnett consequentials received in relation to social care?

I have two things to say. I am sure that Mr McCallum will be able to add some of the detail on how we have worked with COSLA and the integration joint board chief finance officers, but let me say for the record that undertaking proper due scrutiny, challenge and coverage of individual board returns and reaching the position that we have reached and which has been conveyed today is not in any respect, to any reasonable person, comparable with the UK Government refusing to determine and allocate a UK budget in the appropriate time, which shows utter disrespect for the devolved Administrations. The two are not comparable. I am sure that Mr Cameron and I will have that argument elsewhere on another day.

11:30  

Mr FitzPatrick could not have given the committee that figure last week; if I had been here last week, I could not have given you the figure either. That is no slight on Mr Fitzpatrick or on me; it is a reflection of the thorough way in which, with our boards, we have taken a proper look at the expenditure that was incurred in quarter 1 and at how the forward plan would take us into the early part of the next calendar year.

Regarding social care, on 20 March we made the commitment, to which I have referred, to support reasonable funding requirements and any additional expenditure that is fully aligned to local mobilisation plans. In other words, we said that we would support any additional expenditure incurred that was above the increase in the Scottish budget and that was caused by social care services and IJBs responding to Covid.

We have worked with the IJB chief officers and with our colleagues in COSLA. We must remember that the funding and delivery of social care is a joint exercise between the Scottish Government and COSLA. From memory, I think that we have already committed £100 million in additional funding. We continue to work through that with the IJBs, because, in some instances, they have not yet given us the evidence of their additional spending. I will ask Mr McCallum to take us through the detail of how we have gone about that.

Can we have Richard McCallum?

We might have to come to Mr McCallum in due course—

I have come in now. I can add two points to what the cabinet secretary said.

I will deal first with the approach that we have taken to the social care funding that has been incurred so far. The allocation that has been committed today includes all the funding that IJBs have estimated for social care for the first quarter. We have worked closely with chief finance officers from the integration authorities, who understand the costs that they have incurred in the first quarter. The allocation is based on that actual spend.

For the forecasts for the remainder of the year, we have agreed with the integration authorities that at this stage we will provide 50 per cent of their assumed future costs for social care, with a view to reviewing that in November, once they have received more detail from providers in the voluntary and private sectors. It has taken integration authorities some time to work through all that detail with their providers. That is why we think that doing a further review in November will allow us to be clear about the full costs for the year.

That is the approach that we have taken so far. About £150 million has been allocated for social care as part of today’s commitment.

What arrangements do you have in place for internal scrutiny of additional social care spending? Is it the same for health and for social care, or is there a different approach?

I am not entirely clear what Mr Cameron is referring to. Do you mean internal government scrutiny?

The autumn budget revision states that a total of £220 million was transferred from the health budget to local government in respect of what might be called social care. I am interested in how that is internally scrutinised, regarding governance, what has and has not been spent and so on.

That work is led by Mr McCallum and is then signed off by me. I am sure that he will be happy to take you through the detail of how he goes about that.

I will make a couple of points. First, the £220 million to which Mr Cameron referred was agreed as part of the budget settlement for the current financial year, 2020-21. That funding is passed to integration authorities to support the delivery of social care, so it is slightly different from the money that we are talking about today in relation to the Covid response.

With regard to how we go about scrutinising the delivery of outcomes against that funding, we take two main approaches. First, one of the benefits of integration is that we now have a pool of chief officers and chief finance officers with whom, as a Government, we have close relationships, and so we have an opportunity, through one-to-one sessions and by meeting with them as a group, to scrutinise the progress that has been made on spend.

Secondly, as I said, the £220 million was part of the budget settlement, and it was anticipated that a range of outcomes would be delivered against that funding. We take forward our approach to funding for social care through scrutiny against those outcomes, as we do for other parts of the system.

A key point, to which the cabinet secretary alluded, is that, alongside integration authorities, we work closely with the Convention of Scottish Local Authorities on those matters, recognising that there is a partnership between health and local government.

My final question is about how future sums that might be directed towards social care will be agreed. Will that funding be in line with the amounts that are identified in the mobilisation and remobilisation plans?

There will be two areas of future funding for social care. The first will be a continuation of what is in the current Scottish budget. Additional funding for Covid expenditure will follow the same process that we have adopted up to now, and will be set against the local mobilisation plans.

Finally, I repeat the point that Richard McCallum made. It is important to understand that the Scottish Government’s relationship with the NHS is different from its relationship with the integration authorities. Every NHS board produces an annual operating plan that sets a series of outcomes, financial requirements and areas of spend. We agree those very detailed plans with the boards, whose performance is assessed against them at the end of each year.

With integration authorities, the approach is different, as there is a partnership approach with COSLA. The same degree of detail is not there, but outcomes are the focus of the work that we undertake with the integration authorities.

Good morning, cabinet secretary. Donald Cameron is quite correct—for the past couple of months, we have been diligently going through the budget process here. Aside from Donald Cameron throwing the toys out of the pram a couple of minutes ago, I would like some clarity. We have spent some time going through this process, cabinet secretary, and you have spent time dealing with a worldwide pandemic on your doorstep.

Is it not the case that any disrespect that has been shown to us here has been shown by the Westminster Government, which has not set a budget? Is it not the case, considering all the pressures that we are currently under, that the Westminster Government has, by postponing its budget, been totally disrespectful to the devolved Governments?

I certainly hope that I or my ministers and officials have shown no disrespect to the committee, because that is the last thing that we wish to do. It has been, and is, disrespectful of the UK Government, not only not to have a budget at the normal time but not to have the courtesy to advise our Cabinet Secretary for Finance of that change in its position, such that I think that she found out through social media, or perhaps through mainstream media coverage.

That situation does not help us to work co-operatively as Governments of the nations of the United Kingdom, far less as equal partners in that endeavour. It makes it exceptionally difficult for us to know how we will plan our spend and what degree of stability and security we can give to our NHS and—from my portfolio perspective—to our adult social care, for the years to come.

A great many people are anxious about what will happen in 2021-22 and beyond. It is frustrating—to say the least—not to be able to engage with the UK Government in meaningful conversations at this point. We are—currently at least—irretrievably tied to the UK budget envelope and we do not know in what way it will impact on our planning and resources.

I move on to some of the questions that I asked last week about community hubs, which Joe Fitzpatrick adequately answered. We are all aware that the summer budget revision identified spending of £35 million on community hubs, which were established to provide a front-line community response to people affected by Covid-19. The aim was that hub services would facilitate face-to-face scheduled appointments for individuals who needed further clinical assistance.

Community hubs have been found to provide different ways of working. How much of that new way of working will be retained, post-pandemic or generally in the future?

It is a good question. We intend to retain the approach that the community hubs and assessment centres quickly developed and established. At the moment, we hold them ready to stand, should we see a significant increase in the number of cases—just now, we are managing major outbreaks but they are contained outbreaks. We need to have the hubs ready to respond—as we do our NHS—to any increase in Covid cases, such as happened in the period from March to early summer.

We are also considering how to make use of the infrastructure of the community hubs and assessment centres, to help us to redesign unscheduled care and ensure that people receive the right care in the right place. A and E is not the right place for many of the individuals who currently attend it, so we have to be able to provide those people with a more local place that is right for their needs and care. We can do that through community pharmacy, and the establishment of the pharmacy first service was a major step forward.

Together with our clinical leads and those who are involved in both acute and emergency department care and primary and community care, we are actively considering how to use the community hubs and assessment centres infrastructure to help to redesign urgent care.

Part of that redesign of primary care and how we deal with patients as they go through the process is about the impact of community hubs on GPs’ workloads. Has there been an impact? Has the approach helped GPs’ workloads? In the future, could we use the hubs as a different way of working, instead of everybody automatically thinking that they have to go to their GP? The point is similar to your point about A and E: a lot of the time, A and E is not the first place to which people should go; likewise, a GP’s office might not be the first place to go.

11:45  

It is a good point. The hubs and assessment centres were stood up in order to create a Covid-safe route—a non-Covid route—via the GP for people’s healthcare needs. It was a successful attempt by us to ensure that people who had healthcare needs could continue to be seen and treated by their GP; although that often happened digitally, it meant that the GP practice was Covid free and those individuals who had symptoms of Covid could be assessed through the hubs and, if necessary, seen and treated in the assessment centres.

Given that we now have the infrastructure, it would be crazy to disband that and go back to the old ways. In consultation with GPs, community pharmacy and other clinicians in secondary and tertiary care, we must identify an appropriate use of that infrastructure, so that we can see people, as George Adam said, for whom the GP’s office might not be the first port of call. Equally, A and E might not be the right port of call; how can we assist in that situation?

Alongside all that goes the work that Ms Haughey is leading, which is a redesign and transition into a new shape of the delivery, in particular, of crisis mental health services. A and E is not the right place for individuals in those circumstances, but they are in crisis, so an emergency response is needed. We saw some of that work through the pandemic, including a good example in NHS Greater Glasgow and Clyde; it is about developing that alongside other health boards. That is an example of lessons that we have learned in a response to the pandemic that was very rapid but which produced important new ways of working and new practice in the delivery of healthcare.

I have a final question. As we look at how we might work differently in the mid to long term, we might look at putting money towards hubs, as opposed to traditional methods. What impact could that have on primary care funding in the mid to long term?

We had made good progress towards delivering more than half of spend to our primary and community health services in this financial year. We had got to 49.7 per cent of funding in 2018-19. The figures for 2019-20 have been delayed, but we expect them early next year. We were making good progress in that area, and I am determined that we will continue to do so.

We recognise that the remobilise, recover and redesign NHS work that we commissioned from our boards will not move at the pace that we would ideally wish, because we still have a pandemic on our hands. However, when I commissioned the boards to do that work, I was clear that I wanted to see a significant focus on the delivery of healthcare in primary and community care settings and a much closer link—using the experience of the pandemic and partnership working—between health and social care. For example, we should continue the wraparound primary care service to our care homes in that more systematic way that we have seen through the pandemic.

There are significant opportunities, which we need to continue to drive forward on, to refocus healthcare into primary and community care that is more local to people and which makes maximum use of pharmacies and other services, so that acute care becomes exactly that: the place where people need to go when clinical treatment cannot be offered safely to them in any other setting.

How is the NHS Louisa Jordan hospital currently being used, and is it providing value for money?

The NHS Louisa Jordan remains in place, as you know. We have extended the licence on it until April next year to ensure that we continue to have that additional resource should we need it in the face of increased Covid cases, or to assist us in working through the outstanding healthcare needs, as it is currently doing. The hospital has been used for orthopaedics and plastics patients. It is also being used for a degree of diagnostic work and for staff training, teaching and examinations. It is important that staff can continue to follow their training and learning, which have been disrupted because of the pandemic and the response to it. It is very important to have a known Covid-free space where clinics and facilities can be made available.

We will continue to use the NHS Louisa Jordan for that. We are considering what more can safely be done there for patients through day-case surgery and other healthcare procedures as well as diagnostics. Having invested in the build of the Louisa Jordan, which was completed very quickly and within budget, it makes considerable sense to give ourselves the security of knowing that it will be with us at least until April next year. We can maximise its use for the NHS—whether or not it is for Covid, it is still for the NHS and for patients.

Given the potential for a second wave of Covid-19 infections, is the NHS Louisa Jordan a good example of pandemic planning by the Scottish Government, and is it ready to treat Covid patients if needed?

It is a good example of the right kind of planning that needs to be done, for two reasons. First, it was established to deal with Covid patients should our standard NHS estate require that additional resource, and it remains ready to do so if required. However, until it is required to do that, it is also there for us to use to deal with a backlog of patients who could not be seen in the months when we were dealing with the pandemic at its worst. At this point, it feels to me to be a good use of additional resource, and it is making a difference to patients in Scotland.

My questions are on the preparations for a potential second wave of Covid, which unfortunately seems to be on its way. It is fair to say that, the first time round, Governments were not particularly well prepared for the eventuality. What funding has been made available to support preparations for a potential second wave of the virus this winter?

Excuse me, Mr Whittle, while I just nip back into my papers to check that.

At the moment, we have set aside £0.3 billion for second-wave preparedness. A lot of planning is going on. Earlier, I mentioned the board mobilisation plans. Those plans are caveated, in that boards have also been asked to retain capacity in bed numbers in intensive care units, in case there is a significant increase in hospital admissions as a result of Covid. They will maintain their red and green pathways, of course, and they are also contributing to controlling the spread of the virus through the NHS test and protect programme. Our boards will lead our flu vaccination programme this year, covering 2.25 million people.

Social care is also looking at what more it needs to do in terms of winter preparedness. Subject to the agreement of the Parliamentary Bureau, I hope to be able to set out some of that in detail to the chamber before the October recess.

Winter planning is a normal part of what happens every year but, this year, the planning is going on in the context of a pandemic, with a virus that is still as capable of causing significant harm as it was in the spring. As I say, boards have undertaken that work knowing that they need to hold a degree of capacity ready—not empty right now, but ready to be stood up if it is needed.

At the same time, NHS National Services Scotland, our national procurement service, which is responsible for personal protective equipment, has been ordering its PPE supplies, using the model of demand that was there in the peak months and retaining all the distribution outlets and routes that it had before.

I should also point out that boards will have to be planning for Brexit and the possibility of no deal. That includes work with our counterparts across the UK, looking to ensure that we have medicine supplies and stocks and that we can prepare as best as we can in those circumstances.

We heard from NHS Ayrshire and Arran that, if there was a significant second wave, there would have to be a similar cessation of activity in order to implement the safety precautions that would be required. That would involve the cessation of the right to treatment. What are the cost implications of that? Also, what would be the trigger for returning to those kinds of lockdown measures?

The question of what would be a trigger is asked a lot, and I think that it was raised at your meeting with Mr FitzPatrick. I genuinely wish that there were a magic number or indicator that we could point to and say that, when we reach that level, we will do X or Y. Unfortunately, it does not work like that.

We look at a number of indicators every day and weekly. You will be familiar with them. They include the number of cases; where they are; what has produced them; the level of modelled infectiousness in the community, which involves the surveillance work that Roger Halliday and his colleagues publish on a weekly basis; and what the R number looks like. There are a number of factors to be taken into account before we would conclude that we had a level of community transmission that would constitute a second wave.

At this point, although our case numbers are high, they are in outbreaks rather than in community transmission. The complete focus just now is to contain those as much as we can, just as we did in Dumfries and Galloway and in Aberdeen and in relation to the 2 Sisters Food Group outbreak, and to try to take additional measures that ensure that, as we try to contain the outbreaks, we also protect against community transmission. There is a twofold approach. I am sure that I will discuss some of that with the COVID-19 Committee tomorrow. There is not a trigger or a number that I can give you, but I hope that my explanation is reasonably clear.

12:00  

We are also considering the different scenarios for when hospital and ICU admissions grow to those kinds of levels, and what that would mean for the cessation of other work. I am trying hard not to get us into a position in which we simply stop doing as much as we stopped doing last time. That is partly informed by the fact that we have test and protect at the scale that we have it, we have a growing understanding of the virus and how it operates and who it impacts on, and we can look across Europe and see that, although we are going through an outbreak that is largely concentrated in the younger age group, we can anticipate a lag, but we will also see increased hospital and ICU admissions.

Taking all those factors into account, how might that work for us in terms of having to halt the healthcare services and procedures that we have begun to remobilise? We also need to bear in mind the fact that boards plan six weeks ahead for elective work, for example. Patients are getting appointment times up to six weeks into the future, but that is the planning cycle of health boards. We need to take decisions fairly early if we want to stop something that has already been planned for six weeks into the future.

Mr Whittle, that is not a definitive answer, but it is the best explanation that I can give of how we are trying to work our way through this while understanding what is happening with the virus in the community and in the outbreak areas, and what that means for the health service, alongside trying hard not to get back to a place where we cease activity across a whole range of areas.

You can correct me if I am wrong, cabinet secretary, but I think that what you are saying is that any return to lockdown will be decided predominantly on the basis of general community transmission, not outbreaks, and that is very helpful.

The question that I really want to ask is this: what would the financial requirements be if we moved to the cessation of elective treatments, and what are the cost implications of keeping NHS Scotland on an emergency footing?

Mr McCallum might be able to help here. As I indicated earlier, there is a degree of saving to be made if we stop doing elective work, for example, and redeploy staff into other areas. We know what the cost of dealing with a pandemic has been so far—our quarter 1 conclusion has told us that. Those are the numbers that we have to work from when planning what the cost of any second wave might be.

Of course, it is not and it cannot be clear at this point when a second wave might appear. Our current overall objective is to ensure that such a thing does not happen because of the effective deployment of test and protect, and the increased compliance of the public, who have already complied so very well with the restrictions that we are asking them to comply with to prevent transmission.

We need to plan as best we can for the detail of how we would respond to a second wave, and our estimate of the cost of that must be based on what we know has been the cost of dealing with the pandemic so far. Mr McCallum might want to say some more on that.

I will just pick up on the cabinet secretary’s point that there will be some short-term savings as a result of not providing some services. I expect such savings to be fairly negligible, as most costs for health board are staff and bed costs, and they are fixed by nature.

We need to work through the impact of the delays of elective treatment in future years and the potential financial implications for future years. Obviously, finance is not the only factor in that; there will be questions of capacity and other issues. Looking beyond the current pressures, we need to see where we are going to be as we come out of winter and how that will be managed. A key part of that will be the approach to the elective centres and bringing those on stream to deal with some of the backlog. That is a key focus of both our capital and revenue investment for 2021-22 and beyond, and it will be a key driver in supporting our elective strategy beyond this winter.

You have possibly answered several of the questions that I was going to ask about the innovative way in which we are working now. You answered George Adam’s questions in such a way as to answer the questions that I was going to ask about delivering the Near Me service and digital services, so I will move straight on to the budgetary point. Cabinet secretary, you said that you prefer care to take place in the community where possible, with less reliance on hospital-based care. We do not have a crystal ball, and we do not yet know what the budget will be, but if those innovative services are retained and we have new care models, will there be savings in the health budget in the future?

No, I do not necessarily believe that we will have financial savings in the health service budget. There will be a continued focus on moving spend into the community and primary care. Acute care develops all the time, and we know that precision medicine and genomic science produce significant advances, which are primarily seen in acute care. I can recall the days when having a hip operation meant weeks in hospital. Now, in NHS Fife, depending on the nature of the hip replacement to be undertaken and the patient’s health, some operations can be done as a day case. Therefore, advances in science will result in improvements in patient care, pain management and pain relief. We will see improvements in that people will receive the right care closer to home but, at the same time, we will see the effect of medical advances coming through in acute care particularly. That care will not be cheaper than what we had before, but it will be better for patients, because their stay in hospital will be shorter, and it will be possible to see more patients if one patient does not need to occupy a bed for a week but is only in hospital for two to three days, which I think is probably now the standard at the Golden Jubilee hospital. I am not convinced that those improvements will necessarily produce significant financial savings, but they will produce a continued improvement in patient care.

Presumably, that will result in an improvement in wellbeing, which is what we all want. Have you considered patient views in looking at different innovative ways of working? Are we going to ask patients for their advice about models of delivery or ask them how they feel about those and evaluate the outcomes?

I do not have the survey to hand, but the people in charge of the Near Me service technology and method of service delivery undertook a survey with clinicians who had used the service, primarily in primary care but also in acute care, and with patients who had used it. They have produced the results of that work, which show that patients overwhelmingly prefer that way of consulting their clinician, GP or whoever. It does not remove the need for face-to-face consultation, on the part of either the clinician or the patient—if that is what the patient prefers—but it has proved itself to be a significant addition to the delivery of care over the course of the pandemic.

Other evaluation work and surveys will be undertaken on other ways of improving the delivery of care. As you know, Health and Social Care Alliance Scotland is a member of the mobilisation recovery group that I chair and it has been tasked with finding out from patients what they would like their NHS to look like and how they would like to see their healthcare services delivered.

Thank you. I would certainly like the committee to get a copy of the results that the cabinet secretary mentioned.

My last question is about office workers, call centre workers and so on working from home. Health boards have told us that more and more staff who are not involved in front-line services are working from home. Do you think that there is a role for more centralisation of office-based functions? Returning to budgetary issues, do you think that that would be cost saving for the health service?

Pre-pandemic, a number of our national boards looked at combining their finance and HR services and so on into a single operation. There was more work to be done on that but, inevitably, the pandemic paused a great deal of it, because we asked boards to focus on responding to the immediate challenge. Richard McCallum might want to say a bit more about that.

I would just add a couple of things. That is something that we always focused on pre-pandemic. Where there are opportunities to use the NHS estate more effectively, for example to bring back-office functions together, we will do that. I think that that will continue and we will continue to review that as we go through the pandemic. The cabinet secretary gave the example of the national health boards. NHS NSS, in collaboration with the Scottish Ambulance Service and Healthcare Improvement Scotland, has brought together functions at one site at the Gyle.

Boards are seeing the benefit of home working. Fairly recently, Microsoft Office 365 was rolled out across the health service, and having that capacity and functionality has really helped. Obviously, not all staff are in the position to work from home, but that roll-out increased the number of staff who can. On the back of that, territorial and national boards can look at using their estate more efficiently and effectively, and we will keep working with them on that.

Good afternoon. I have a couple of questions about financial stability and sustainability. The cabinet secretary is well aware that four boards—Tayside, Ayrshire and Arran, Highland and Borders—received brokerage in 2019-20. I appreciate that the cabinet secretary does not have a crystal ball, but does she think that those four boards will break even in three years’ time?

Mr Stewart will recall that, at the onset of the pandemic, we paused the development of the three-year financial and savings plans for boards and integration authorities. We have now returned to those plans and are reviewing what can be delivered this year. Mr McCallum knows the detail of that.

12:15  

Mr McCallum—are you there?

Sorry, I dropped out of the meeting again. I missed Mr Stewart’s question, but I think that it was on our approach to escalation with four boards. We will continue to work with those—[Inaudible.]

I fear that Mr McCallum’s connection is not strong. Let us revert to David Stewart, and then we might be able to bring in Mr McCallum again.

I would like to raise a more general point with the cabinet secretary. As she knows, I am genuinely interested in rural areas in particular. All the four boards that I have mentioned—apart from Dundee, which is a very urban area—have a strong rural component. I know from my experience in the Highlands and Islands that a number of boards in my patch have what I would describe as chronic structural financial problems. I think that the cabinet secretary is aware of what I am getting at. Staff turnover and vacancy levels are high. There are examples of consultants on £300,000 per year, locum staff still being essential, chronic drug overspend and management churn. Without me naming individual boards, the cabinet secretary knows exactly what I am talking about.

Is that something that the cabinet secretary would consider addressing when it comes to planning, albeit that the group was paused during the coronavirus crisis? Those chronic problems will affect the ability of those by-and-large rural boards to break even in three years’ time.

Mr Stewart raises a good and important point. There is much in the sentiment that he is expressing that I would not disagree with. Were we not in the middle of a pandemic, I would want to—and I did want to—have a better look, at whether we could address some of those structural issues in a different way as we do the long-term financial planning with our boards.

I think that it is important that we have a single national health service in Scotland, and that we do not have individual trusts and so on. However, that does not discount the fact that individual boards are dealing with very different circumstances as they try to deliver equity of access to healthcare to citizens across the country.

The boards that Mr Stewart is referencing have big geographical challenges. Those challenges differ between those three boards, but they are still significant. They are greater than, for example, the geographical challenges that some of our central belt boards have to deal with, but, equally, those boards have high population density and other challenges. We need to find a way to create stability across all our boards, but with a degree of flexibility that allows us to help them address the particular challenges that they face in their particular circumstances.

We have not been able to make a significant amount of progress on that at all, for reasons that I am sure Mr Stewart well understands. It is very important to log on the record that we want to be able to return to and begin working through that area.

I thank the cabinet secretary for the very positive tone that she adopted in that answer. There are two elements to my last question. Generally, I suppose that my political philosophy is about decentralisation of healthcare. I think that the cabinet secretary is well aware that one of my causes célèbres is the need for a positron emission tomography scanner in NHS Highland. As the cabinet secretary knows—because I lodged parliamentary questions about this—in one year that I looked at, the cost to NHS Highland for patients going out of region to Aberdeen, Dundee, Glasgow or Edinburgh was £400,000. I accept that PET scanners are expensive in terms of capital costs, but that is also a huge annual revenue cost that will not go away.

I suppose that part of what I am suggesting is more decentralisation. I know that your answer on the NRAC formula was that you do not believe that any change is necessary, but does the formula fully reflect the costs that rural health boards incur?

I think that I partly answered that in my answer to your previous question. We need to find a way to have equity of distribution of funds across health boards, but with a degree of additional flexibility that allows us to recognise the particular challenges that rural health boards face, which are different.

As I have said, the challenge for NHS Highland is less about population density. On the contrary, it is about the board having a population that is dispersed across a large geographical area, and what that means for the health care services that the board can provide, the cost of those, the staffing issues that Mr Stewart addressed, and where it is appropriate to centralise the delivery of services.

That is not necessarily about cost; often, it is about clinical safety. We want our clinicians to be able to work with a volume of patients because that enables them to continue to keep their skill levels high and improves the safety of what they do, so some healthcare is inevitably more central.

Equally, health boards in the central belt have challenges in relation to population density and high levels of health inequalities, and we need to fund them, as far as we can, so that they can respond to those and other challenges.

The problem that I have with formulas, which I think we all have, is that we will never get a formula that works perfectly for everyone. That is not to say that the current formula should never be looked at, but I think that we need to take on board, if you like, the sentiments behind Mr Stewart’s question—as I said, I would not have a great deal of disagreement with that—and see whether, within the single structure that is our NHS, which I passionately believe that we should keep, we can find better ways to address some of the issues that he raised.

In October 2018, the Scottish Government published “Health and Social Care: medium term financial framework”, in which it identified the need to save £1.7 billion over the period from 2016-17 to 2023-24. You have indicated that the pandemic will have an impact on those plans over the period that the framework covers. When do you expect to be in a position to provide an update on the medium-term financial framework that reflects the impacts of the pandemic?

Up until Covid, we were in line with the trajectory that is set out in the framework, with boards and IJBs having secured the necessary levels of savings and the portfolio being in a balanced position. We now intend to review the medium-term financial framework to take account of the impact of Covid, and I undertake to keep the committee informed as we do that work and update the framework. We will make sure that you are well aware of what we are doing and the outcome of that.

Now that the Government is pushing towards or approaching a regional approach to the planning and delivery of services, what progress has been made in respect of that? What savings will be or have been delivered?

We were taking that approach, but being in the middle of a pandemic has significantly changed how the NHS responds, so many plans and intentions have been paused. We want to return to such work and develop it but, as with everything else that we have discussed, that depends very much on how successful we are in suppressing the virus and avoiding a significant second wave. I am not sure that I am particularly able to answer your question in detail at this point, but Mr McCallum might want to add more, provided that his connection is working.

I will add two things. As the cabinet secretary said, health boards have through the pandemic set out their own mobilisation and remobilisation plans, which we expect to continue. However, we expect boards to work together when that is possible and to work with each other when there are good grounds to do that.

I will give two examples. A group of NHS chief execs with one representative from each region and one from the national boards still meets to look at how we can respond to Covid on a regional basis when there are good grounds for that. Given that we are talking about the budget, and to go back to Mr Cameron’s questions about scrutiny, I highlight that we have regional finance leads who look at the spend in regional areas. That ensures peer review of costs that are being incurred in the pandemic.

Work is still going on at the regional level. Some work has paused as we deal with the pandemic, but I expect that to pick up again in the coming months as we remobilise and renew.

I am conscious of the time, colleagues, so I will press on to our last subject, which is integration. The Scottish Government’s lessons learned report highlighted positives and negatives for integration in the past few months. What is your view of the integration system? Are there lessons to learn that might mean, for example, improving the structures for making decisions or allocating resources?

The point is interesting. In the months of the pandemic that have been the most challenging so far—from March to June—because of the numbers of cases and the effect on remobilisation of services, chief officers and others consistently fed back to me the point that the decentralisation of decision making was an improvement. That meant that an IJB’s chief officer did not have to secure the agreement of a number of committees before acting—they were empowered to take the right decisions to make things happen by using their professional judgment, in partnership with their colleagues in local government and the health board. The setting up of the PPE distribution hubs and our alertness to issues on the ground are testimony to how well that has worked. Discussion continues with chief officers of IJBs—it will shortly involve chairs and vice chairs, too—about whether the committee structures that are in place are still essential.

12:30  

Our IJBs have perhaps overdone replicating committees that properly already exist in boards and local government for governance purposes, so I am not sure that we need a third tier of those. We will continue to discuss that with IJBs. Our board mobilisation plans expect boards to produce plans developed in partnership with local IJBs, which is what we have seen but to varying degrees of success, as you might expect. However, we continue to look for that improvement. We can learn lessons to improve the functioning of integration, but the principle remains correct.

The cabinet secretary’s answers to the questions that you asked, convener, have covered most of the questions that I was given, with the possible exception of one, although I think that the cabinet secretary might have answered this, too. Work is under way to continue the progress in partnership working and transparency, as recommended by the ministerial group. How is that work going?

Like so much of what we have talked about this morning, that work was progressing well until the ministerial group was paused when the pandemic took off. We have now reached agreement to take that work forward again, as all members of that group, apart from one or two, are now members of the remobilisation and recovery group, including IJB chief officers and representatives of the chair and vice-chair group. However, the focus at this point is on ensuring that remobilisation and recovery are integrated with the work of our boards and social care.

Thank you for that.

Emma Harper is the final questioner.

I am conscious of the time, so I will be brief. Health and social care integration is about shifting the balance of care from hospital to community. Do you expect a longer-term shift in the balance of care because of the coronavirus pandemic?

Yes. We were well on track to shifting to that 50 per cent of spend, as I said in answer to an earlier question. I expect to see it in terms of delivery of community hubs and assessment centres, as I said in answer to Mr Adam, and in terms of the hospital at home programme, which has long been pioneered successfully by NHS Lanarkshire is now being picked up at pace by some other boards. That consists of the transfer of hospital-based care to people’s homes, which has been done effectively, with significant patient satisfaction and positive healthcare outcomes for those patients. Other areas of shift include the near me programme, which was primarily adopted by GP practices but is now being picked up by many of our hospital-based clinicians for out-patient appointments, which it shifts from the hospital setting back into the community. A great deal like that is already under way as a consequence of people seeing how they could deliver services in the face of the pandemic and, in doing so, finding innovative but safe and clinically proven ways of delivering healthcare in the community closer to where their patients are.

My final question might require a wider answer. The ministerial strategic group said that set-aside budgets were not working effectively. Obviously, the Covid pandemic has affected all budget planning for the future, so, do you think that we need to make adjustments to how set-aside is planned? I am happy to take a written answer if that would be beneficial, because of the time.

We agreed plans with COSLA on making improvements to set-aside budgets. Alongside that—this is important—we agreed on much more effective use of IJBs’ reserves, some of which are considerable, so that we could make better use of resources overall. Following that agreement, the plans were under way, but we then had the Covid pandemic. However, there is no disagreement between us and COSLA about the importance of that approach and of picking it back up as soon as possible.

I thank the cabinet secretary and Richard McCallum for their attendance today and for helpfully answering the further questions that the committee had. I look forward to hearing a bit more detail about this morning’s announcement, which is, of course, welcome. However, it is fair to say that it is a top-line announcement, so it will be interesting to see some of the detail behind it as we continue our pre-budget scrutiny.

We now move into private session.

12:36 Meeting continued in private until 12:51.