Public Audit and Post-legislative Scrutiny Committee

Meeting date: Thursday, November 7, 2019

Official Report 659KB pdf

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Section 23 Report

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“NHS in Scotland 2019”

Item 3 is on the section 23 report “NHS in Scotland 2019”. I welcome our witnesses from Audit Scotland: Caroline Gardner, the Auditor General for Scotland; Leigh Johnston, senior manager; and Fiona Watson, audit manager, performance and best value.

I ask the Auditor General to make a brief opening statement.

Thank you, convener. Today’s report is my annual report on the NHS in Scotland, and it sets out how the NHS performed in 2018-19, financially and against national standards. The NHS provides vital health services to the people of Scotland. People are living longer and many are living with chronic health conditions, which means that demand for services continues to grow. NHS boards met just two of the eight key waiting time standards in 2018-19, but it is important to note that more people were seen and treated on time compared with 2017-18.

Achieving financial sustainability remains a challenge. In 2018-19, four boards needed a total of £65.7 million in additional financial support from the Scottish Government to break even. Half of all NHS savings were non-recurring and, although such savings help the annual position, they do not reduce costs or change services over the longer term.

We have identified several risks in relation to the NHS estate this year. Capital funding has decreased by 63 per cent over the past decade, and the cost of backlog maintenance is nearing £1 billion. High-profile new builds have also come under scrutiny because of health and safety concerns.

Despite the financial challenges and rising demand, staff are working hard to provide safe and high-quality care. There has been a significant reduction in mortality rates, and people’s reported experience of hospital care is improving.

The Scottish Government has taken steps to help NHS boards to address their financial challenges and to improve people’s access to care. Those include a shift from short to medium-term financial planning and the introduction of the waiting times improvement plan.

Health and social care integration continues to be a priority but, given that it is essential to future sustainability, progress is too slow. Local audit work has again highlighted a number of challenges that are getting in the way of integrating health and social care. NHS boards struggle to find time to support reform and integration while maintaining their acute services, and that is particularly difficult as demand rises. There is variation in the way in which NHS boards work with integration authorities to plan services and budgets, and several boards have reported integration authority overspends. Achieving recurring financial balance will be achieved only through whole-system service redesign.

My report highlights a range of workforce challenges that the NHS faces. Shortages are making it difficult to fill key roles in acute and primary care, particularly in rural areas. Agency costs remain high, and plans to withdraw from the European Union are likely to exacerbate existing pressures.

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There is more to do to ensure that all NHS staff are supported in a safe and respectful workplace that helps them to deliver the best care possible. The collaborative leadership that is needed is made more difficult by high turnover and difficulties in recruiting to senior positions in recent years.

The aims of the Government’s 2020 vision will not be achieved by next year. NHS boards are working on a significant number of local improvement initiatives, and we are seeing examples of new ways of delivering healthcare, but we are some distance from the large-scale, system-wide reform that is needed. The challenge for the Scottish Government, NHS boards and their partners is to agree new, more focused priorities and to create a culture that supports successful partnership working in order to deliver integrated care. That must include effective leadership, involving communities, and having clear and robust governance arrangements in place. My report shows that improvements are needed in all those areas.

As always, my colleagues and I are happy to answer the committee’s questions.

Thank you very much, Auditor General.

I thank the Auditor General for a typically excellent report, which captures all the main issues in relation to our health and social care system. You will not be surprised that I want to kick off by asking about the workforce. Quite often, our political and public debate is on the resource challenges in the national health service, but I believe that the biggest challenge that we face relates not to resources but to our workforce crisis.

Some of the statistics are laid out in exhibit 11, on page 26 of the report. There has been a 7.7 per cent increase in vacancy rates for consultants, meaning that there are now more than 500 consultant vacancies in the NHS. There has been a 4.9 per cent increase in nursing and midwifery vacancies, meaning that there are more than 4,000 nursing and midwifery vacancies across Scotland.

We were promised a comprehensive workforce plan by the summer of 2018. We were then told that it would come by the summer of 2019. Now, it looks as though we will get a plan at some point, I hope, in 2020. If the Government cannot deliver a comprehensive plan, how will it deliver a strategy? Is there any sign of when we might get it?

You are absolutely right that planning the workforce is one of the key things that is needed for planning health and care services for the future. More than any other public service, health and care services depend on having the right people with the right skills in the right places to deliver the services. That is all the more important when we are talking about the way in which services are provided. The demographic pressures that I touched on earlier mean that there are fewer people to provide services as well as more of us needing them.

The question about when we will see the workforce plan is one for the Government, but having such a plan has been a recurring recommendation from me, in the report and in the work that we have done on workforce planning over the past few years.

Do you have any idea why the plan has been so delayed? It was promised for the summer of 2018, and we are now heading into the new year.

When we reported on workforce planning earlier this year, we highlighted that the Government has changed the way in which it intends to pull together the workforce plan from the different building blocks that it has in place, which is a complex thing to do. Why the plan is later than planned is a question for the Government rather than for us.

In the report, you mention culture. That issue has been highlighted in the report on NHS Highland and, time and again, in relation to the challenges at the Queen Elizabeth university hospital, which I will ask about in a moment. You mentioned the annual survey. It is perhaps too early to say, but has there been any indication since the publication of the report that the Government will adopt the recommendation on the annual survey and include questions on culture in it?

We have paid attention to that issue this year, partly because of the situation at NHS Highland and partly because of the pressure on staff. Fiona Watson might be able to give a bit more detail.

When we reviewed the staff survey, it was clear that, although the survey had been done in 2018, it did not include questions about bullying and harassment. Given the situation in NHS Highland, we felt that it was vital for there to be something more regular that boards can use to identify the culture in their organisations. That is why we made our recommendation.

Was the recommendation made purely because of what had been seen at NHS Highland, or was it made through the process of building this year’s report? Did you get a sense that culture was increasingly becoming an issue across the board?

Yes, I think so. We heard of other boards where the culture had been an issue, and where there had been reports of bullying and harassment. It is important that boards understand what the culture is in their organisation and have a cultural improvement programme in place to support their staff at all levels.

I have one final question on workforce. It looks like the trend is going one way. Are there any signs that there is going to be a trend shift the other way?

In broad terms, the pressures involve rising demand, as you have described, and the fact that demographic issues mean that there are fewer people to provide the services that we need. That increases the premium on a workforce plan that sets out what staff are needed and how they might be trained differently. The report contains examples of that. For example, NHS Grampian is thinking hard about flexibility with regard to the roles of doctors, nurses and allied health professionals. All of that becomes more important in the circumstances that we are in.

At the same time as we face those pressures, we are trying to build up services in primary care and the community, and it is critically important to have a workforce plan that covers all of that. The task is not going to get easier, but that is not to say that the situation cannot be made better by fresh thinking and good planning.

In your opening remarks, you talked about the estate and the issue of new build. Case study 3 on page 18 concerns the Queen Elizabeth university hospital. An inquiry into the situation at the hospital, led by Professor Montgomery, is being undertaken by the Government and the health board in partnership. We have had the promise of a public inquiry into the children’s hospital in Edinburgh, but that is yet to start and there have been no decisions about who will lead it or what its terms of reference will be. Clearly, there are issues around not only what happened after the hospital opened but the handover process, the commissioning process, what checks were and were not done and so on. Can you talk about what you found when you were doing that audit?

I do not think that we have a lot to add at this stage, because we have not seen the results of the inquiries.

You are right that there have been problems with those two big hospitals, and, a couple of years ago, there were significant problems with the PFI/PPP schools in Edinburgh. Audit Scotland is taking a step back and seeing whether we can determine what some of the common factors in those cases might be.

It is worth noting that some significant new-builds have worked well. For example, the new hospital in Dumfries was built on time and on budget, and, as far as we know, is working as planned and providing safe patient care. We are all interested in considering what the differentiating factors are and learning from that. Clearly, that is part of the purpose of the Government’s announcement of a new centre of excellence for healthcare building. However, at this point, we are looking to see what is known and what the open questions are.

One thing that we will need to consider—the inquiry will help to shape this, but public inquiries can take a long time—is the fact that there are issues around ventilation, water supply, wider infection control and an inconsistency about what tests were done when, particularly at commissioning stage, at handover stage and at opening stage. We can see clearly that there are similarities between what happened in Glasgow and what happened in Edinburgh. Do you think that those issues will need to be considered in more detail? Will you cover that in future audits, after the inquiry publishes its report?

Yes. We are currently preparing a report on NHS Lothian, pulling together what is currently known about that hospital and drawing on the audit work that was done this year and the reports by KPMG and NHS National Services Scotland. Within that, it is already clear that there are questions for the public inquiry to examine about the standards and the extent to which they are standards rather than guidance, about how close the scrutiny and oversight of the construction process is under different procurement models such as the non-profit distributing model or the public procurement model and, as you say, the role of independent testers and whether that role is commonly understood, so that everyone knows what is covered.

My report will not be able to answer those questions, but I hope that it will set out what the questions are and what questions are still unanswered, so that the public inquiry can look into them.

Exhibit 8 on page 21 concerns the national trends for the treatment time guarantee. We got a commitment from the Government almost a year ago that it would amend the treatment time guarantee so that people would get a more honest idea of when they were likely to get that treatment. Is there any indication that that amendment is due? Has that come up at all in your investigations?

That is a question for the Government. I am not sure that there is much that we can add at this stage.

I understand that some interim waiting time results were going to be published in October, but I have not seen any.

Exhibit 8 shows that delayed discharge has gone up again, by 9 per cent, which is quite a stark increase. Given that there was a promise three years ago to eradicate delayed discharge altogether, that is a worrying figure—420,000 bed days were lost, which is the equivalent of every bed in the Queen Elizabeth university hospital every day for an entire year being lost to delayed discharge. Is there any explanation for that? Is it more about social cuts and social care challenges or is it more about access points? Is the level of delayed discharge an entrance problem or an exit problem?

I will ask Fiona Watson to comment but I think that what you see across exhibit 8 is a real trend of increasing demand because of the ageing population; the increase in delayed discharge is part of that.

It is difficult for us to understand the reasons for the delayed discharges. The data is not explicit in that way. It could be that there are problems with internal discharge planning processes or it could be because of the lack of step-down facilities in the community. We also picked up in the patient experience survey that the most common reason for discharge delay on the day is the need to wait for medication. There are internal process problems and problems with the capacity in the community to look after people.

How much of that is because of social care packages not being available?

It is difficult for us to tell. We do not have that level of information. However, it indicates that people are being stuck in hospital when they could be out of hospital.

The first thing that I should say is that, strangely enough, this report sounds a wee bit better than the ones that we have had before. Some progress seems to have been made, despite the fact that there are some areas of clear concern. Does that sound reasonable?

We always try to be fair and balanced in our reports and we have worked hard in this report to recognise the efforts that are being made. We do not want to say that people are not working very hard indeed to provide the best possible health and care services. At the same time, the rising demand is making that harder and harder to do.

I am glad that that sense of progress comes through in the report, along with the fact that the challenges remain really significant.

I have a slight warm glow.

To come back to my old hoary subject of governance, you have raised issues in regard to that. In paragraph 88, you say that external auditors found that

“NHS boards had adequate governance arrangements in place but found recurring areas of concern”.

The word “adequate” does not fill me with happiness. The best that you can say about the governance arrangements is that they are “adequate” and you add that there are “areas of concern”. That is not terribly good. In paragraph 90, you say:

“Results showed that most boards scored themselves as performing well or exceptionally well”.

It sounds as though there is a wee bit of a disconnect there. Can you give a bit more information on that?

Certainly. As the committee knows, I appoint auditors to every health board in Scotland and they are required to look annually at the quality of governance in the boards. As you say, across the piece, the feedback that boards received in the reports that go to them and to me was that those arrangements were adequate but auditors highlighted room for improvement in the capability and capacity of board members, the commitment to transparency, which is an issue that this committee has shown interest in, and the quality and timing of the information that boards and committees have available to them.

In a sense, those concerns all reflect the challenges that the health service and health boards are operating under and the breadth of responsibilities that boards carry. However, we are all interested in making sure that boards are as well equipped as possible to manage those pressures, and the things that I have just highlighted would help with that.

The Government has introduced “A Blueprint for Good Governance” and requires boards to report on how well they are doing against it. You are right that, at the moment, we think that boards are probably being a bit overoptimistic in their scoring. Boards knowing where they are at and where there is room for improvement are important first steps, and we will continue to follow up on that in the years ahead.

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“A Blueprint for Good Governance” is clearly a key step forward. How are we doing on that? What progress has been made to date?

We are aware that there are three separate working parties that the Government is leading. One is to do with attraction and recruitment of board members; another is on retention and development; and the third is on corporate governance systems. We have not heard any update on the progress of those.

The blueprint recommends independent scrutiny in a three-year period, so we would be looking to see whether that is at least commenced in the near future.

I was going to come on to that issue. Paragraph 92 of your “NHS in Scotland 2019” report says:

“The blueprint recommends ... independent validation”.

I am not entirely sure how that will take place.

We have not heard how that will happen, but we assume that one of the three working parties will deal with that.

We know that, when the blueprint was first published, there were peer reviews between boards. For example, the chair of NHS Greater Glasgow and Clyde led a review of governance in NHS Highland against the blueprint. That is one model that the Government may be planning to use but, as Fiona Watson said, we do not know whether that is the intention or whether some other approach will be taken.

Accountability is mentioned in your report, which is obviously a key aspect of governance. Are there concerns about people understanding their accountability?

People probably understand it; they probably also recognise the breadth and scale of the things for which they are accountable. That is why getting information that covers the most important factors and can be relied on is so important. Over the past couple of years, the committee has spent a lot of time looking at things that went wrong in NHS Tayside, where, to an extent, board members were not getting the information that they needed and, in some places, could not rely on the information that they did get. Those are the key things.

There has been a huge turnover of senior management, which you highlight in exhibit 15 of your report. What impact has that had? There is also the question of some people having dual mandates. Indeed, the report says:

“over half of NHS boards ... have senior leaders holding dual positions.”

That figure seems phenomenally high.

I have no doubt that that makes it harder to make the changes that are needed. We know that it takes a while for any new leader to understand the challenges that they are facing, the team they are working with and the people they are looking to serve. With that level of turnover and churn, that becomes much harder. These are big jobs in their own right. If people are asked to do the same thing in two different boards, that adds to the challenge—possibly it increases the challenge exponentially rather than just adding to it. Does Leigh Johnston want to say something about what we have seen in that regard?

If one person is handling two major jobs in parallel, does that work? Does it reflect the fact that there are not enough competent people in the market?

There are two parts to that answer. I think that it can work in the short term. For example, when NHS Tayside was going through the most significant challenges, a number of its most senior roles were shared with NHS Grampian in particular, where effective NHS leaders were asked to take on a dual role while the permanent posts were filled. I reported on NHS Tayside this week and we have found progress, so the approach can work as a short-term measure. However, it is not a long-term response. It reflects the difficulty in finding the number and calibre of people needed to do these big, significant jobs.

Is there any indication that, where there are dual mandates, there is any deterioration in quality of quality or service?

I think that it would be hard for us to say that we have seen that, but that clearly depends on picking people who are well experienced in their own jobs and who have good systems that can step up while they are carrying out both roles and on ensuring that the arrangements are short-term rather than longer-term measures.

We published a report on NHS Tayside on Tuesday. The board has decided to move away from that model, to take it to the next level of its recovery, and it is recruiting a full-time permanent director of finance. Previously, the person who held that position had a dual role, but the board thinks that the director of finance needs to have a full-time focus on that role.

As the Auditor General suggested, our concern about leadership is that there is a need for stable leadership. In our integration report, we talked about collaborative leadership and about the ability to build relationships and to be able to agree ways forward and agree how services will be integrated. That takes good relationships and collaborative leadership, and stable leaders need to be in place to achieve that. Stable and effective leadership is also needed to bring about the right supportive culture.

First, I will go back to the workforce issue. We know that a major contributing factor to the earlier retirement of many more general practitioners and senior consultants in recent years has been the pensions issue, which is decided at a United Kingdom, and not a Scottish, level. Although there has been some movement, I get the impression that the problem is far from being solved and that, as a result of this pensions fiasco, we are still seeing a large exodus of people from the health service through early retirement, particularly doctors and GPs. If they go over a certain level, they will be taxed at 55 per cent, so there is no incentive for them to continue to work in the health service, even if they wanted to.

Alex Neil is right that those pension changes affect all high earners in public services and that, because of the income distribution, they particularly affect senior doctors such as GPs and consultants. The UK Government has proposed some changes that would give doctors more foresight about what their tax affairs are likely to be, so that, rather than them getting a surprise tax bill at the end of the year, they would have an indication of what is likely to come and be able to apply more flexibility in how they work to minimise that additional tax liability.

My understanding is that the doctors’ representatives think that those changes do not go far enough. I think that it is too soon to see the impact in the figures. I understand that the Scottish Government has said that it will consider what else it may be able to do to help manage that through. Pension changes are absolutely one of the pressures in the mix of workforce planning. They need to be properly understood, either so that they can be mitigated, or so that we can think about what they mean for the number of doctors that we train and for doctors’ working patterns for the longer term.

This pensions fiasco is causing a bit of a vicious circle. The average number of GPs per practice is around five. If a practice lose a GP, particularly if it finds it difficult to fill the position on a permanent basis, the pressure on the other four leads them to retire a bit earlier than they wanted to; it certainly puts stress on them and the entire practice. This seems to be a very urgent issue that needs much more dynamic action by the UK Government.

As we have said, it is an issue that needs to be properly understood. It has a different impact on different practices depending on the age profile of a practice’s GPs and, in particular, partners. It needs to be well understood, as it is adding to the pattern that we reported on in our report on the primary care workforce whereby more doctors who come through training intend to work part time anyway. As such, we need to train more people in order to have enough doctors in place to provide the services, and this issue is adding to that pattern. We need to be training more doctors, and that takes a while to come through. As Alex Neil described, there is a short-term urgent pressure but, whatever measures the UK and Scottish Governments take on pensions and taxation, a long-term response also needs to be taken.

Addressing the pensions issue and training more doctors are clear priorities.

Absolutely.

The issue of pensions could be solved quite quickly with the appropriate policy decisions by the Treasury and the Department of Health and Social Care in London, and in the negotiations with the doctors. By contrast, as the Auditor General rightly said, it takes at least eight years of training before somebody is ready to be a GP.

Obviously, changes to the tax system could be put in place more quickly than we can train doctors. It is a policy decision rather than an issue for us, but understanding the impact is an important first step.

Staying with workforce issues, I note that exhibit 11 on page 26, which considers vacancy and staff turnover rates, certainly gives the impression that we have a regional problem. For consultant vacancy rates, the area with by far the biggest problem is Orkney; for nursing and midwifery vacancies, it is Highland; for vacancies among allied health professionals, it is Grampian; and for staff turnover, it is Shetland. By contrast, the lowest rates tend to be in the central belt; Lothian has the lowest rate in one category, Ayrshire and Arran does in another, and so on. The central belt boards find it easier to find staff and keep turnover levels reasonably below or on the average, whereas those north of the Tay—such as Grampian, Highland, Shetland and Orkney—all have major workforce problems. In addition to all that we have talked about, such as pensions, training and trainees, that suggests to me that there is quite a significant regional dimension to the issue—real problems that need specialised and specifically tailored solutions. Am I right?

There is a regional pattern. We think that, primarily, remote and rural areas find it hardest, because there are fewer people to recruit from and because the way in which services have to be delivered means that cover is harder to get and the pressures are stronger. Fiona Watson may want to add to that.

We certainly found that pattern When we looked at the cost of the temporary workforce, the north region had the highest cost. There was wide variation across all boards, but that was the highest spend, which aligns with the rural need.

Is the problem in Aberdeen and Grampian still the cost of living—the cost of housing and so on?

I am not sure.

Did you take evidence on that?

No. Grampian has done a lot of work to try to improve recruitment of nurses, and we have mentioned an approach that it took to attract nurses from Australia. That is one strategy that it has adopted.

To be fair, for other services such as teaching, the same areas in the north of Scotland, such as Highland, suffer difficulty in attracting people. It seems to me that maybe we should have more specifically tailored solutions in those areas, in addition to the national stuff.

My final question is about the point that you have rightly made that, to be sustainable in the long term, there has to be reform, not least because at least 56 boards are involved in the delivery of health and social care. That number excludes the local authorities, which deliver social care; if they are added, 88 boards are involved in the delivery of health and social care in Scotland. It seems to me that streamlining the number of organisations that are tripping over one another is an area for which reform is needed. That is a lot of overhead that might be better spent on the front line. Do you agree? If so, what top three areas would have the most impact on the reform that is needed for the long-term sustainability of the health and social care system?

There is a lot in that question. On the number of bodies that are involved, I have said before that the structure of the NHS is a matter for the Government, but having so many bodies is making it harder to recruit and retain the number of high-calibre managers and leaders that is needed. We are seeing that here; the boards are not yet having the impact that they should in providing the collaborative leadership that would start to shift care and develop the new services in primary and community settings that would reduce the pressure on acute hospitals. That clear message is coming out from our work on health and care.

With regard to the top three things, first, we say in the report that some really good things are happening out there. We give a number of examples, such as the work by the Scottish Ambulance Service and NHS 24 to understand better the needs of individuals and respond more quickly to them. NHS 24’s triaging of people who are looking for urgent appointments with GPs has very high levels of patient satisfaction and it is clear that it is directing people to better and more appropriate services. Those examples remain quite isolated and we need to get better at evaluating and identifying what works and rolling it out more quickly.

Secondly, there is the workforce plan that we have been talking about. Unless we have the right people in the right places, we will not be able to build the services that will shift away from an unhealthy reliance on acute care to something that will be better for an ageing population.

The third thing is linked to the Government’s development of its next strategy, after the 2020 vision. It is a matter of ensuring that that is prioritised and of engaging properly with people, in line with the principles in the Community Empowerment (Scotland) Act 2015 and the place framework, so as to get people involved at a local level and engaged in discussions about what their health services might look like in the future. That means moving away from a conversation about what we are closing—whether it is closing hospitals or beds—to something about developing better alternatives.

Those would be my top three areas.

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I would like to consider capital funding. There is a section on this in your report, at page 16. You state:

“Capital funding from the Scottish Government has decreased by 63 per cent over the last decade”.

I think that you said in your opening statement that there is around £1 billion of backlog maintenance. Your report discusses a national strategy being developed to address that. Given that the capital funding issue is not new, are you able to give us any guidance on when the strategy might be completed?

Returning to a question that Anas Sarwar asked in a different context, why is it taking so long?

I am not sure that we can tell you very much more than what we say in the report. We know that the Government is working on a national capital investment strategy. I welcome that, and I think that it is really important. We have a picture of how well the capital that is available matches needs. It is also a matter of ensuring that the strategy is being prioritised, so that we are investing, where needed, in new community health centres and new types of provision closer to people’s homes.

The question as to why the strategy has not been published yet is one for the Government; I am not sure that we can add much to what we say in our report on that.

Grand.

Arising from that, do you have any idea when the Government started developing the strategy?

No. I think that that is a question for the Government.

I shall ask.

Anas Sarwar also raised a point about certain delays that have come about with new assets and new facilities. Whenever there are such delays, that can mean that an older site needs to be operational for longer than is intended or is ideal. Logically, that will result in additional expenditure and overheads. Potentially, it could lead to compromises to safety. That being the case, are you reassured by the NHS, the relevant board and the Scottish Government that any risks to patient or staff safety have been addressed and flagged up? Are you reassured that the NHS has sufficient funds to continue to operate the older facilities safely?

The most significant example of what you are describing is obviously the delay in opening the new sick children’s hospital here in Edinburgh. We are preparing a report on that at the moment, setting out the associated costs, the delays and what is known about the causes of those delays. In that instance, my judgment at this point is that the Government has been very clear about what the additional costs are and about what investments are needed to keep the safety of the existing services at Sciennes and at the neurological centre operating safely during the period when they are expected to be needed.

My overall sense and my overall message in the report is that the Government is always focused on maintaining safety as far as it can. I do not want to ring alarm bells about the situation. The concern is that the investment that is required and the time that is being taken are distracting from making the sorts of changes that are required to make the NHS sustainable for all of us for the future.

I am grateful for that—thank you.

Auditor General, you have told us in the report that funding has been going up year on year, in cash and real terms, for almost nine years now. The head count has gone up five years in a row, the standard of care is high, and public satisfaction is high. However, there is always a “but”. The whole service takes about 42 per cent of the entire Scottish budget. I thank Alex Neil for asking the question that I was going to ask about where the greatest opportunities for improvement are. I will change my question a little. What evidence have you seen since last year’s report on where the improvements are occurring most?

In my answer to Mr Neil’s question, I referred to the examples in the report. I will not repeat that, but I will highlight three system-wide things that are improvements.

First, we have the medium-term financial framework, which is helpful in setting out the scale of the financial challenge. It requires boards, for the first time, to prepare and publish longer-term financial plans.

Secondly, the waiting times improvement programme is helpful as a short-term investment to bring waiting times in line with public expectation while what is needed system wide in relation to investing in primary and community-based services is thought about.

Thirdly, work is going on around leadership development. Without strong leadership, we will not be able to do what is required. The jobs are difficult. It is hard to recruit and retain people, and we need to support the people who are there. The investment in leadership is also a positive step.

Are those initiatives yielding benefits? Can you see benefits and improvements taking place as a result of those changes?

It is early days, as we said in the report, and it will take a while to be able to demonstrate the impact of those things. They are all good first steps, and I am happy to give them that credit in the report and in the committee, but it is too soon to say what impact they are having.

You included a case study of NHS Ayrshire and Arran on page 16 of the report. You reminded us that the board had to make savings of about £23.8 million last year, and you said that

“143 improvement initiatives were identified”,

which gave the board recurring savings of £18.4 million. That is really impressive, and I am delighted that NHS Ayrshire and Arran is achieving those savings. Can whatever is happening there be extended elsewhere to give us an opportunity to get the recurring savings that we need, which do not diminish the health service that we rely on?

That is a really interesting question, Mr Coffey. We included the update on NHS Ayrshire and Arran in the report because the board is making lots of progress, as you have described. It is not out of the woods yet, but it is making real progress.

It is fair to say that the Government has tried to take a similar approach in other boards. It is providing support to NHS Highland and NHS Tayside where they are finding it much more difficult to turn the situation around. I am not sure that we know why that is the case; I will ask the team whether there is anything to add to that. However, it would be interesting to explore with the Government what it thinks has made a difference in the case of NHS Ayrshire and Arran. Does Fiona Watson want to add to that?

Yes. The non-recurring savings versus recurring savings figure was at 50 per cent, which was the same as last year’s figure, so we have not seen any improvement in recurring savings per se. Boards classify their savings as high, medium or low risk, depending on how firmly they believe that they will achieve them. In 2018-19, 32 per cent of the savings were classified as high risk, which was up from 13 per cent the year before. That tells us that there is a lack of confidence about meeting those more challenging savings by the end of the financial year.

There are a lot of cost pressures and demand pressures in working in that traditional model of care, and impetus is required to have whole-service transformation and to look at the more cost-effective out-of-hospital and out-of-acute-care options.

What about the impact of those savings on the quality and standard of care? Is anyone looking at that to make sure that we are not diminishing the quality and standard of care? Are you looking at that, or do we expect the health boards to do that?

The health boards will be looking at that. We had a look at the NHS performs website and saw that there was quite an assortment of positive results on improvements in quality and safety. There are particular reductions in hospital mortality rates and infection rates. There did not seem to be any impact on the quality of care, which is testimony to the staff who are working hard in those services.

You spoke about 50 per cent of the savings being non-recurring savings. However, you said in your 2017 report that 35 per cent was unsustainable. We have now had two years of 50 per cent. What steps are the health boards or the Scottish Government taking to address that?

The first step is longer-term financial planning. We have the Scotland-wide national medium-term financial framework and, beneath that, three-year plans from individual health boards that set out how they expect to be able to balance their books and transform their services. They are getting better at identifying which savings are recurring and which are non-recurring and which are the most and least likely to be achieved, and at managing that work.

However, it is important to move beyond simply making savings and to think about how the priority in the medium-term financial framework of taking half of those savings and reinvesting them in primary and community services is being achieved. The real prize is not just balancing the books but using the headroom that that creates to shift the system. We are seeing some improvements. The Government is now supporting boards to make their plans more robust and detailed so that they and we can use them as more helpful tools, but it is all work in progress.

Does that mean that, if the budget is eased, they will not look for savings?

My judgment in the report is that the pressures are not going to ease because of the demographic pressures that we are seeing. The overall national financial framework identifies a gap of £1.8 billion by 2024 unless change happens. That is likely to move in only one direction without the sorts of transformations that we are talking about.

You also mentioned an issue that has come up in other areas. Boards measure their likelihood of making savings in different ways. You have spoken about three-year plans and mentioned that not everybody is putting information into their accounts. We had that issue with some of the colleges. Can the Government not get people to do their accounts properly?

This is not about their accounts; it is about their future plans. You are absolutely right: we think that any savings that have not been identified clearly at the start of the year should be identified as high risk. In paragraph 27 of the report, we talked about the work that the Government is doing to help to support boards in making sure that their plans are properly detailed and prepared on a consistent basis. I welcome that, and we will look at what effect that has in future.

You said that this is not about their accounts, but it is still about financial information that is being prepared. That should be done to the same standard.

Absolutely. I think so.

Do you think that we should address that with the Government?

Ensuring that the plans are robust and consistent and that people are able to deliver them is key to making savings that can be reinvested elsewhere.

But the reporting is the simple part, is it not? Boards should be able to do that.

Yes. The planning is the first part, and they should be consistent. There is no question about that.

As members have no further questions for the Auditor General and her team, I thank them very much for their evidence and close the public part of the meeting. The committee will now move into private session.

11:12 Meeting continued in private until 11:24.