Health, Social Care and Sport Committee

Meeting date: Tuesday, January 10, 2023

Official Report 563KB pdf

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Budget Scrutiny 2023-24

The next item on our agenda is an oral evidence session on the Scottish budget for 2023-24. We will take evidence from the Cabinet Secretary for Health and Social Care, Humza Yousaf. I welcome and wish happy new year to the cabinet secretary, who is joined by Richard McCallum, director of health finance and governance at the Scottish Government.

We obviously want to talk about the budget, but it would be remiss of me not to mention yesterday’s announcement of additional funding for national health service boards around the country to deal with the situation that we have seen over the past few weeks. I would like some clarity on the extra funding that is being provided. Will you take me through that? What extra funding is being provided and how will it be deployed?

Obviously, I did not know that you would ask about that specifically. It is probably best for me to lay that out to the chamber in the statement later today. There will be two essential areas of focus. The First Minister outlined those in very broad terms so that I could give the detail to Parliament, as we said throughout yesterday.

I appreciate that. I do not want you to pre-empt the statement.

Yes—and incur the wrath of the Presiding Officer. There are two areas of focus. The first is freeing up more capacity for interim beds. We have used interim beds already, but they will be a slightly different feature in what I announce in a few hours’ time in the chamber, given the pressures that social care is facing.

The second area of focus will be to bolster the NHS 24 workforce in particular, who have been exceptionally effective in keeping people away from busy acute sites. The vast majority of those who call NHS 24 and get through to a call handler get the appropriate triage without having onward transfer. However, I will lay out the funding—the pounds and pennies involved—in this afternoon’s statement, as appropriate.

Thank you. I did not mean to put you in an awkward position by asking for the figures—I know that you cannot give those until you make the statement. However, it is helpful to mention yesterday’s announcement. It would be strange if we had not mentioned the additional funding that is coming forth to deal with winter pressures.

I want to take you back to the emergency budget review. Some tough decisions had to be made in order to fund the pay offer that has been made to NHS staff. I believe that the offer is, on average, 7.5 per cent, which is a great deal higher than other offers in the United Kingdom. Questions have to be asked about that. You had to take funding from certain other areas to fund that offer. I want to know how those decisions were made, so maybe you can take me through that. How has the Scottish Government been able to make that increased offer to Scottish NHS staff when such an offer has not been made in the rest of the UK? How can we afford it?

Convener, I should have prefaced my remarks by wishing a happy new year to you and the rest of the committee. I hope that everybody got a bit of downtime and a break. I suspect that, as we get into this session, that may feel like a distant memory.

In response to your question, it is important for me to say, first and foremost, that the £400 million of savings around the EBR were—you are absolutely right—partly to do with the significant record pay offer that we have given to NHS workers. They were also—to a quite significant extent—to do with the impact of inflation and, in particular, of the UK Government’s mini-budget and the inflationary pressure that that brought to bear on our budget. With regard to the health and social care portfolio, Richard McCallum will correct me if I am wrong, but the impact of inflation alone means that our budget is worth £650 million less than when it was set in December of the previous year.

We are trying to find money to give a record pay offer to avert, as best we can, industrial action—as you know, that threat has not been completely negated—and to deal with the impact of inflation. Obviously, I will give details of where that £400 million is coming from. Some of it comes from Covid savings and some of it comes from social care, primary care, mental health and so on. It would be completely false to tell you that that has not had some impact on service delivery. You cannot take £400 million from a budget and not expect there to be some impact on delivery. Many stakeholders, such as the British Medical Association, have been very vocal about the impact of those savings on primary care, and the Stroke Association has been vocal about the impact on, for example, thrombectomy services. Stakeholders have spoken about the challenges for delivery.

In answer to the last part of your question, I cannot speak for the Welsh or the UK Government. Northern Ireland, too, is in a slightly different situation. Essentially, this is about making difficult choices—that is how we have been able to afford the pay offer that we have put on the table. It means that, thus far, Scotland is the only country where nurses and ambulance drivers have not walked out on strike in the midst of an exceptionally difficult winter, not just here but across the UK. As I said, the threat of strike action has not been completely negated. Three trade unions—the Royal College of Nursing, the Royal College of Midwives and the GMB—are still in dispute over the pay offer, and we will continue to have meaningful dialogue with them.

The EBR was an exceptionally difficult process to go through, but one that I thought necessary in order to avert strike action and get a fair pay deal for NHS workers, who absolutely deserve it.

The Welsh Government has said that it wants to match what the Scottish Government has done but cannot do so.

You have had to make difficult decisions. You have had to reprofile money in the health budget and deal with inflationary pressures on the health budget. Has any additional funding been given to the Scottish Government by the UK Government to deal with any of that?

The short answer is no. Obviously, we keep a close eye any time there is a discussion about “new money”. As you may know, yesterday there was an announcement by the UK Government about what it plans to do about delayed discharge. There was a lot of focus on additional bed capacity, much as it will be in Wales, Scotland and Northern Ireland. That was touted as new money, but we asked HM Treasury and were told that it is being found from within the department there, so there are no consequentials to it.

Every time there is an announcement, we keep a close eye on whether there will be any further consequentials, but I have to say that I am not holding out any hope that there will be additional money coming in this financial year. However, I am also mindful of the fact that some level of discussion is taking place at UK level between trade unions and the UK Government. If any funding comes in-year, we have a commitment to pass on health and social care consequentials to the health and social care portfolio.

Thank you for your honesty.

Hello, cabinet secretary.

Just yesterday, the First Minister said that there had been a slight reduction in delayed discharges, yet today’s figures show that we have the worst-ever levels of delayed discharges, with the average number of beds occupied due to delayed discharge sitting at 1,950 per day. With the First Minister announcing block bookings of care home beds, I have two questions. First, over what timescale will that begin? Secondly, what level of change to delayed discharges do you expect that to bring about?

The question is a fair one. The level of delayed discharge is far too high. It should be said that the First Minister was talking about real-time data. The data that you are referring to is monthly data; obviously, that has a time lag to it, but you are right about the levels of delayed discharge. I am certainly not going to argue with the idea that they are far higher than we would like them to be in Scotland and across the United Kingdom. I will give further detail of that in the statement—I am conscious of the need not to pre-empt too much of what I will say in the statement. The focus will be on interim beds. I will give the detail on the number of beds that we are potentially looking at with the funding, and the detail of that funding, in the statement later today.

Those interim beds can be used in a number of ways. They can be used for people who are waiting for a care home placement—we will be able to put them in an interim placement. Frankly, we should also be looking to use those interim beds for people who have not yet had their assessment, whom we will be able to assess when they are in an interim bed space. Whatever clinician I talk to—doctor, nurse or whoever—on any busy acute site, they continue to tell me that the exit block is the number 1 issue, and I am certain that the whole committee knows that. It is not the only issue, but it is the number 1 issue, so creating that capacity will be important.

You also asked about the timescale. Again, I will give some detail, but I do not think that I will be sharing too much detail from the statement if I say that that work has already started. You will know that I set up a ministerial advisory group that brings together the Convention of Scottish Local Authorities, Scottish Care, chief officers, the Society of Local Authority Chief Executives and Senior Managers and so on. This is one of the key issues that it has been looking at.

I do not want to pre-empt the statement, but we have about 600 interim beds that we already use, and the clear message that is coming through from Scottish Care is that it feels that the current national care home contract rate that is paid does not take account of the effect of the inflationary pressures and the high energy costs that have been experienced since the contract was first set. Again, without pre-empting the detail of the statement, we think that we have found a way around that, at least in the short-term interim.

Thank you. Again, today, we have seen the worst ever eight and 12-hour waits in accident and emergency, with only 56 per cent of people being seen within four hours. Obviously, hundreds of thousands of patients are waiting for treatment. Do you feel that the changes that were announced yesterday will significantly improve those figures? Will you announce further measures in your statement?

That is another fair question. We expect to see some immediate improvement from the action that we are taking. Your question was on whether we would see significant improvement. There is not a magic bullet or a panacea—Dr Gulhane knows that, given his clinical experience—but I think that it will see an improvement.

As well as the shorter-term measures that I will announce in the statement today, it is really important that we as a Government do not lose focus on the medium to longer-term issues, particularly in and around social care. The national care service is a part of that, but let us all accept that we have to make improvements now rather than wait for a national care service to become operational before doing so. As well as the shorter-term impact, the immediate improvement that I expect to see as a result of the action that we are taking will be on the eight-hour and 12-hour waits. Interestingly, given the flow through the hospital, we will probably see improvement in the eight-hour and 12-hour waits before we see it in the four-hour waiting time target. We will not lose focus of the longer-term changes and reforms that we have to make to social care, which will help to make a long-standing, more sustainable impact in the longer term.

Although we are focusing a lot on the back-door delayed discharge—understandably so, because it is the issue that clinicians and healthcare leaders predominantly raise—we will not lose focus on the front door. I will talk in the statement later about how, through the preventative agenda, we continue to drive down demand at the front door.

Good morning, cabinet secretary. There is a large increase in the budget for NHS 24. Will you explain the thinking behind that and what impact it will have?

Thank you for the question. There is no doubt that NHS 24 is an absolutely vital service. It is critical to us. It has been an extremely successful service since its inception. NHS 24 has exceptional levels of data, as you can imagine, including call data, call-waiting data, data on how many people are triaged and data on how many people are recommended for transfer to A and E. It is very clear from the data that the overwhelming majority do not need onward transfer to A and E. I therefore see NHS 24 as being critical in trying to reduce that demand to the front door. The thinking is that the more that we can bolster staffing levels with call handlers and clinical staff, the better, and we have increased the number of clinical staff quite significantly. If I look at figures from September 2021 to September 2022, I can see that the real increase in clinical nursing staff has helped with that.

The reason why you will see funding as it is for NHS 24 is that there is definitely more that we can do on the digital offer. NHS 24 has launched an app, which you can download whether you are on Google or Apple. It has self-help guides and provides a great service whereby you can view the pharmacy, general practitioner services and other primary care services that are local to you and what their opening times are. It is a minimum viable product at the moment, as it has just launched, but it will grow arms and legs as time goes on, and some of the funding in the budget will help us to do that. In short, a lot of the focus will be on staffing and the digital offer.

Thank you. Will the cabinet secretary provide clarity on how much of the budget relates to the development of the national care service?

That is a good question and one that we anticipated coming up, because members of Parliament are right to ask for that clarity on the national care service. If you look at our current financial memorandum for the NCS, you will see that we talk about the figure for the coming financial year being around the £63 million to £95 million mark. You will also probably be aware that the Finance and Public Administration Committee has come back to the Government to say that it wants a revised financial memorandum. There has been a fair degree of scrutiny. Richard will correct me if I am wrong, but I think that we said that, once we have the draft of the revised financial memorandum, on which we are working, we propose to come back next month to the committee with it. It will lay out in detail how much we will be spending specifically on the national care service. It is therefore work that is under way, given that we have been asked to provide a revised financial memorandum.

11:30  

Good morning, cabinet secretary, and happy new year. I will pick up on the point about NHS 24 recruitment. I appreciate that further detail will be provided this afternoon, I imagine, in the cabinet secretary’s statement, but he will recall that, last year, he and I had an exchange about contact tracing staff and the potential for them to be redeployed to NHS 24 to bolster capacity. At the time, the cabinet secretary gave an undertaking to try to do as much of that as possible. I do not know whether he can say now how many of those staff were transferred or whether he can write to me with further detail on the transfer.

I can certainly write to you. Forgive me; I am just checking, but I do not think that I have quite that level of detail. It was not just NHS 24, of course; there was redeployment to NHS boards, territorial as well as non-territorial. Forgive me; I do not have that detail to hand, but I am more than happy to write to the convener, who can share it with the rest of the committee.

We will move on to questions from Tess White, who is joining us remotely.

Hello, and thank you, cabinet secretary. I acknowledge that you do not want to provide the budget allocation for NHS 24 until this afternoon’s statement, although I am disappointed to hear that. I raised NHS 24 capacity with you in October, and, at the time, you emphasised the additional recruitment that will take place to support that crucial service. Can you at least indicate this morning, cabinet secretary, how many new NHS 24 staff have been put in place since you made that pledge in October and how many you intend to recruit over the coming weeks?

I am not sure of the nature of Tess White’s disappointment, so she can, if she so wishes, come back to me on that. The budget for NHS 24 for 2023-24 is outlined in the budget document. On any additional information on that, as I said, it is right and appropriate that we have agreed to update the entire Parliament in the chamber, so we will do that.

For the period from October to December, again, if Tess White does not mind, I will come back to her with the exact figures. There has been additional recruitment, because I have seen a note from NHS 24 on that since October. I will come back to Tess White with the exact figures so that I do not inadvertently give her incorrect ones.

Thank you.

We will move on to financial sustainability. The questions will be led by Paul O’Kane.

I am keen to start with the sustainability of management of finances within NHS boards. Audit Scotland previously highlighted a lack of stable senior leadership, with high turnover and short-term tenure. When we went through this session last year, we discussed some similar issues. Therefore, it would be good to know what progress the cabinet secretary feels has been made on financial stewardship within boards and whether he feels that more has to be done to tackle those issues.

It is still a very uncertain time. Although we are in a different phase of dealing with the pandemic and are much more into the endemic phase, it is still a very challenging time, as we all know, for NHS boards up and down the country. We are trying to revert to some of the pre-pandemic processes that we had in place. For example, in this financial year, we are urging boards to get into a position of balance. It is fair to say that we do not expect every single board to quite get there, but we are making it clear that if further brokerage is required, as per the pre-pandemic arrangements, they will have to look at the repayment of any additional brokerage. We are getting back to practices that we had pre-pandemic, which help the financial stewardship of NHS boards.

As you know, there are still a number of boards—three—that have been escalated in relation to their financial performance, and we continue to work exceptionally closely with them. Given the phase of the pandemic that we are in, we are taking an even closer look. We already had quite a close relationship with those three boards, but we are taking an even closer look at what can be done to get them to de-escalate in relation to their financial performance.

If I am being frank and honest, there is still a way to go in that regard given the experience of the past two and a half years—almost three years—of this pandemic, during which the financial landscape has been so uncertain and unstable. Given that we suddenly had to fund a whole new vaccination programme and so on, I am very keen, now that we are in this new phase, that the boards are getting back to really sound financial management; I certainly get that impression from the annual and mid-term reviews that I have with the boards.

Is the cabinet secretary confident that, when we come back round this table to discuss these issues six months to a year down the line, significant progress will have been made, particularly in those three boards? Does he expect them to have returned to a position of having those usual financial controls?

In short, yes. I expect there to have been significant improvement when we are sitting back around here in a year’s time, particularly and absolutely in those three boards—Ayrshire and Arran, Borders and Highlands—that have been escalated. I would expect there to be significant improvement.

We have already been in discussion with those boards around their escalation. As you can imagine, we have a process. As the member knows, escalation entails a higher level of monitoring, supervision and support. That is all on-going, but it is fair to say that I would be very disappointed if we were sitting here in a year and there had not been significant improvement, particularly in those three boards.

I will ask about something else that Audit Scotland has consistently raised, which is the impact that multiyear budgeting would have and the adverse impact that a lack of multiyear budgeting has on longer-term financial planning, ensuring that innovation can be planned for and other things that we are keen to see. What is your view on how multiyear budgets might assist in achieving financial stability, and what do you perceive as being the barriers to offering those multiyear settlements?

I might bring Richard in shortly, given his experience in this regard. I do not argue with Audit Scotland’s premise or the point that, I think, the deputy convener is making: multiyear budgets clearly help with planning. That is not unique to the health service; it is the case right across portfolios. That is why the spending review was an attempt to give at least a high-level overview of what budgets might be for future years. Our difficulty is the unstable economic circumstances that we find ourselves in.

You talked about sitting here a year from now. If we were to go back a year, I do not think that any of us would have expected to see inflation at the level that we currently see it at, nor, indeed, would we have expected to see some of the geopolitical factors playing out and having an impact on the economy in the UK and in Scotland in the way that they have.

There is so much that we can do around multiyear spending reviews, as we have done. They are not budgets—I accept that point—and do not go into the detail that a budget necessarily would, but they are an attempt, at a high level, to give some idea of what the financial envelope will be for future years. I entirely accept the point that that is different from a budget and that multiyear budgets could be more helpful. I think that the barriers you asked about are the instability and the economic circumstances domestically and globally.

Richard, is there anything to add from your experience?

There are two things that I would add. The first is that the cabinet secretary made the point about the resource spending review, and that has been massively helpful. That being published last May at least gave an envelope or a window of what we expect budgets to be over the next few years. That is obviously subject to the annual budget process, but it has given a planning framework, which is really useful to us as a portfolio and for our discussions with the health boards about what they can expect for the next few years.

My second point is that, as the cabinet secretary mentioned, we engage regularly not just with the escalated boards but with all health boards. I have regular meetings with their directors of finance, and, as you would expect, we work with them on a range of planning assumptions in relation to pay, non-pay and many other factors. By way of example, health boards will come forward with plans before the start of this financial year not just for 2023-24 but for the next three years. We work with the health boards in a context that gives us that longer-term planning environment.

Sandesh has a question on financial sustainability as well.

Cabinet secretary, I am sure that you are aware that around 85 per cent of all patient contact is in primary care. During the Christmas break, I worked as an NHS GP around different parts of the country. They are all struggling with demand, and allied healthcare professionals are vital in helping to cope. Due to the £65 million cut to primary care budgets, these additional, valued staff are at risk. Do you think GP services will be financially stable going forward?

I referenced the comments from the BMA about the EBR savings that we looked to make. Obviously, we have a significant budget for 2023-24, but I have no doubt that the reprofiling that we had to make in primary care had an impact. I will not argue about that with Dr Gulhane or the BMA, but it is why our strategy, over a number of years, has been to increase those multidisciplinary team members that you talked about. We have recruited more than 3,220 since making that announcement. On top of that, there have been increases in general practitioners. We still have a way to go in that regard, but I am pleased that we were able to ensure that, in the 2023-24 budget, primary care will be well funded. That puts it on a sustainable footing.

All that having been said—I do not need to tell Sandesh Gulhane, given that he is working in primary care—the workload pressure on our GPs is still exceptional, even with the multidisciplinary teams in place. That is why I am very keen to try to ensure that that workload is spread more evenly. For example, I have spoken about NHS 24 and what more can be done around that. You will see in the 2023-24 budget a significant investment in primary care that I am proud to stand by.

Thank you. Colleagues, I am aware that a couple of members need to leave before 12 o’clock. I am tempted to move our theme on NHS estate and sustainability forward to allow members to do that. I will go to Gillian Mackay first and then Tess White. I will then revert to our schedule.

That is great. Thanks, convener.

Good morning, cabinet secretary. The increase in the cost of energy, as well as food inflation and many other rising costs, will undoubtedly have an impact on the cost of running NHS buildings. Does that raise issues for how individual boards use their estate, and what could the impact be on boards’ ability to deliver services?

There is no doubt that there are impacts on budgets and therefore on the ability to be innovative, whether with the estate or otherwise, in trying to mitigate those impacts. You will know from the 2023-24 budget that we have increased funding to boards by just under 6 per cent, which is a significant increase. I should have said from the offset that the health and social care portfolio is getting an additional £1 billion. I hope that that is a demonstration of how much the Government values our national health service, and it is more than the consequentials that we received. However, all that being said, inflationary costs are putting real pressure on us.

We are investing in a number of capital projects. It is important to say that there are also significant refurbishments—and not just normal maintenance refurbishment, although that is very important, of course, as a number of health boards are also looking at how they can make their buildings more carbon efficient in line with our net zero targets and our net zero health plan. That work does not come without an up-front capital cost, and we are very mindful of that. The net zero agenda has always been incredibly important. It has even greater importance, given the eventual savings that could be seen in energy costs in the future, although it involves up-front costs.

The cabinet secretary mentioned the ambitions to have a net zero health service by 2040, and the public will obviously be aware of the impact that buildings and transport to and from hospitals will have on those ambitions. One of my areas of interest is the environmental impact of medicines and what we are doing to tackle that. What work is going on to engage with patients and clinicians around some of the alternatives that we may need to move to, and what financial impact could that have on NHS budgets? Obviously, some of the alternatives may be more expensive, and some may be less expensive, than current treatments.

11:45  

I refer Gillian Mackay to our net zero strategy, which I know she has seen because she and I have had conversations about it. The strategy goes into great detail in a few areas. We have rightly talked about capital infrastructure. We have to look at the existing estate as well as new estate—the national treatment centres, the replacement for Monklands and so on. We have to look at how we make sure that those projects meet our net zero ambitions. That will probably involve additional cost, particularly for new build. We have to be up front about that.

The second area that our strategy looks at in a lot of detail is treatments. There is already really good innovation and really good practice in that space, around treatments that release less carbon into the environment. One of the areas of focus that I am keen on is the use of asthma inhalers and switching to more carbon-friendly treatments for asthma. Obviously, our first focus is on prevention, and there is a lot that we can do in the preventative space around asthma. However, we are also trying to get those who have inhalers on to more carbon-efficient and carbon-friendly ones. I have seen that up close. I met a couple of patients in a Dundee GP practice who talked me through the difference that the switch made to them. They felt a lot better for it, and, of course, it helps the environment too.

There is a group of GPs—I am trying to remember whether it is Tayside specific or wider than that; I will take a look at that and come back to you—who have got together to look at how to make primary care treatments more carbon neutral where they can. From the secondary care perspective, as I say, we have outlined in our net zero strategy what we think we can do around treatments in the NHS to improve our carbon footprint.

That is great.

Cabinet secretary, the total maintenance backlog bill across Scotland’s 14 health boards has, shockingly, reached more than £1.5 billion. What budgetary provision is in place to cover that bill? Why is the 2021 commitment to invest £10 billion over the next decade to replace and refurbish health infrastructure not mentioned in the 2022 programme for government or in the 2023-24 budget?

First, although I know that that figure for the maintenance backlog was released publicly, we went back to the query that was made in order to correct the figure. The figure was incorrect: it is closer to £1 billion. That is still a significant maintenance backlog, but I think that it was inflated by around £500 million.

Nonetheless, Tess White’s point stands: there is a significant maintenance backlog. Over the capital spending review period, we have committed to invest more than £1 billion in enhancing or refurbishing existing healthcare facilities, and updating and modernising essential medical equipment. We will do that, but it will take time, which is why it will happen over the capital spending review period. However, it was a fair question.

Tess White’s second question was also very fair: why has the backlog not been mentioned? It is not because that commitment does not stand: the commitment to £10 billion over the decade stands. We always thought, and it has always been the assumption, that that would have to be back-ended towards the later years, given the financial circumstances that we find ourselves in, which have been exacerbated by various factors, as I have said. We are still committed to that £10 billion investment over the decade, but it will undoubtedly be back-ended towards the later years.

We will now look at Covid-19 recovery.

Good morning, cabinet secretary, and good morning, Richard.

Our briefing paper—the convener has mentioned this already—states that specific funding for Covid-19 no longer exists. We do not get any more money from the UK Government, so any funding for Covid-19 recovery has to come from the Scottish Government’s budget. I am interested to know, cabinet secretary, what level of funding in the proposed 2023-24 budget relates specifically to Covid-19 recovery.

Emma Harper is right. There was a unilateral decision by the UK Government to withdraw funding for Covid. In some respects, we were always going to get to that position. My argument with the UK Government was always that withdrawal should be phased. We have gone from spending billions of pounds on Covid and getting additional funding for that to the tap being turned off. I think that withdrawal should have been phased over a period, but we have had that argument and it is not one that we won, so we are where we are.

To answer Emma Harper’s question, we have funding of circa £250 million for 2023-24, which includes funding for vaccinations and test and protect. The remaining costs for Covid will have to be managed within the baseline budgets as we move to a position where Covid will be part of our everyday lives—and, undoubtedly, we will live with Covid for a number of years to come.

We are also waiting to see what further Joint Committee on Vaccination and Immunisation advice there will be in relation to future vaccination programmes. Clearly, that is where the big cost comes from when it comes to Covid.

To answer Emma Harper’s direct question, £250 million is provided in 2023-24, which includes funding for vaccinations and test and protect. The remaining costs are baselined into budgets.

I know that vaccination will be on-going, and a new variant has now appeared: XBB.1.5. As I was part of the vaccination programme in NHS Dumfries and Galloway, I was able to learn a lot about the different vaccines that were produced. Is it reasonable for the UK Government just to terminate the funding, rather than, as you say, having a phased reduction?

As I said, the argument at the time, from not just the Scottish Government but the Welsh and Northern Irish Governments, was to phase that in over a period. However, we rehearsed that argument and we lost it. The UK Government has decided not to continue funding Covid costs.

I am not often sympathetic to the UK Government, but meeting those costs was a huge undertaking. Our difficulty is that we have a new infectious virus in our health system that requires periodic vaccination, surveillance—to an extent—through test and protect, and some level of testing. We now have to baseline into our budgets the costs associated with that, and that is very difficult to do.

We will see how 2023-24 progresses. Our big worry, as Emma Harper referenced, is about what will happen if there is a new variant—and we are keeping an eye on XBB.1.5—that has immune escape and causes more severe illness. If that happens, we will need to go back to the UK Government with this discussion, given the implications of that.

I have a final question about Covid. During the pandemic, services were changed and redesigned, and care was delivered differently. One issue was that people had digital appointments with their healthcare provider. What cost savings do you foresee being achieved by such approaches to service redesign, including, for example, the use of digital?

I cannot put a figure on that just now. There are a number of drivers for looking at the use of digital, as well as other reforms to the NHS. One is the demand on services across the country. There is no getting away from the fact that, whether in primary or secondary care, people are presenting as sicker and with higher acuity levels. That is due to the pressure that the pandemic brought to bear and the fact that people were not able to access services, particularly at the beginning of the pandemic, as a result of the really difficult choices that we had to make to suspend or halt services such as screening.

One reason for reform and innovation is the demand that the system faces and will face in future years. The other is cost. We absolutely have to look at the fact that our health service now costs the Scottish Government £19 billion, which is a significant investment. Obviously, that investment in the health service will continue but, as others have said, simply putting more money into the health service will not necessarily help us to improve services. Although that investment will certainly help, innovation has to be key, and digital has to be part of that.

The BMA is among those calling for, as it puts it, a “national conversation” around the NHS. Whether we have a national conversation or call it something else, there is absolutely space to have a conversation with the public about how they want their health service to respond to their needs in the future and what kind of reform they want to see. I make it absolutely clear that reform should always be within the founding principles of the NHS—there should be no ifs, buts or maybes about that—but discussions about reform and innovation are crucial.

Okay. Thank you.

I would like to ask a follow-up question about Covid testing. Free tests are no longer being funded by the UK Government. I believe that, at the moment, we have 1,200 patients in hospital with Covid. Is the fact that our population is not able to test for Covid for free having an impact on the number of people in hospital with Covid just now?

That is a good question. It is really hard to say, because it is difficult to determine the number of patients with Covid and the number who are in hospital because of Covid. Given where we are with community-wide testing, the question is probably near impossible to answer definitively.

However, we have to get to a stage—it is right that we do—where we treat Covid as we treat flu and other such viral infections. I understand people’s concerns about that, particularly the concerns of those who care for somebody who is vulnerable or those who are themselves vulnerable or immunocompromised. I completely understand the nervousness that they have been expressing from the moment we began to reduce community testing. Essentially, as Emma Harper’s questions alluded to, we do not have the funding from the UK Government to continue that testing, so we have to get to a space where we treat Covid as we treat other viral infections of that nature.

Thank you. I will now hand over to Carol Mochan, who wants to ask questions about health and social care pay.

The convener asked some general questions at the start about the allocation of pay in the budget. I would like to drill down into nursing and social care pay.

At the committee on 15 November last year, Colin Poolman of the RCN said:

“Social care pay in the health service is, frankly, upsetting”.

He also said:

“It is no surprise that we have a crisis in the social care workforce as well as in the health workforce.”—[Official Report, Health, Social Care and Sport Committee, 15 November 2022; c 11.]

Responding to the cabinet secretary and the First Minister’s briefing yesterday, Mr Poolman said that the RCN’s

“previous warnings have not been listened to.”

He reiterated the point that fair pay is fundamental to the retention of the current workforce and to attracting a workforce for the future. For the sake of the NHS and social care, can the cabinet secretary afford not to listen to the serious and real concerns of nurses, given the number who are turning away from the profession? Does he think that nurses are being unreasonable?

No, I do not think that anybody asking for higher pay in health or social care is being unreasonable. I hope that, for all the differences that we might have on the issue, Carol Mochan and others will recognise that the Government’s approach to discussions and negotiations with trade unions has been constructive and meaningful and is a stark difference to the approach of a number of other Governments across the UK. That is why I continue to reiterate that, so far, Scotland is the only part of the UK that has not seen nurses and ambulance workers go on strike. I am not taking that for granted, because we know that the RCN, the RCM and GMB continue to be in disputes, so we will continue to engage with them.

On social care, in the 2023-24 budget there is about £100 million as part of the uplift of adult social care pay to the real living wage rate of £10.90. Richard McCallum will correct me if I am wrong on this, but I understand that that is the same as the increase by the Welsh Government, which has also increased the real living wage. That £10.90 figure is higher than the UK Government’s uplift, which is, I think, 48p lower than the £10.90 rate.

12:00  

I do not disagree with the premise of Carol Mochan’s question and Colin Poolman’s comments: we have to continue to see what more we can do to improve pay, terms and conditions for social care workers. That obviously comes at a cost. Previously, Carol Mochan and the Scottish Labour Party called for an increase to £15 an hour, for example: I would love to give £15 an hour to adult social care workers—yesterday—but that would come at a significant additional cost of well over £1 billion, which would be very difficult or, frankly, near impossible to fund, given the financial pressures that we are under. We have to keep working at that. I certainly do not see the uplift to the real living wage as being the final uplift. We will continue to progress that.

May I come back in on social care?

Of course.

When you have had your budget deliberations, have you talked at all about moving towards collective sectoral bargaining? The trade unions say that that one change could make a significant difference to retaining staff, and that would help with budgeting across social care.

Yes. As the member knows, sectoral bargaining is part of the national care service proposals that we have put forward. It is very difficult to do in the current structure. We are always looking to see what we might be able to do. Given that we have a very fragmented landscape across the country, with independent providers, third sector providers and local authority providers, sectoral bargaining has been virtually impossible or very difficult, thus far, but it is certainly part of the national care service proposals, if we can do it outwith the national care service. We are looking at that in the context of our fair work agenda for social care. We will certainly do that, because there is strength in sectoral bargaining.

I have one final question. When you look at your finances and budgets, what consequences do you think there may be from having to fund the introduction of the national care service? How will that affect pay, terms and conditions in the short and slightly longer term?

That is a fair question. As per my previous answer on that, we are looking to produce a revised financial memorandum that we will present to the Finance and Public Administration Committee as per its request. The amount that we will spend on the development of the national care service will be a fraction of the overall health and social care budget for the coming financial year. Richard McCallum will keep me right here, but, in the current financial memorandum, the figure is between £63 million and £95 million out of a budget of £1.2 billion for health and social care. We are talking about a not insignificant amount, but it is a small amount in comparison with the entire budget. We will make sure that we do not lose sight of improvements that need to be made right now to social care. We will not wait for the NCS.

The second thing that I would say is that one of the driving forces behind the national care service is precisely to improve pay, terms and conditions and to have sectoral bargaining and ethical commissioning, and to put all of that at the heart of the principles of the national care service. You can see that in the bill. That will make a big difference to the sustainability of social care in the future.

Good afternoon. Cabinet secretary, is it realistic to expect a shift towards preventative spend when the immediate pressures and demands on healthcare are so great?

I do not think that we can afford not to. We just cannot. Given the scale of the pressure that we are under, we have to be focused on the preventative as well as dealing with the current demand. Dealing with the current demand, especially over the past few weeks, has been exceptionally exhausting for our healthcare workers, whether they are in community care, primary care or secondary care. They are utterly exhausted after almost three really difficult and relentless years of a pandemic.

I understand why David Torrance asks that question. Part of the solution has to be in the preventative work. We have to make sure that we do everything that we can, whether that be on smoking cessation, drugs and alcohol or obesity. I mentioned asthma, for example, and the need for clean air. A lot of focus is still on the mental health preventative space as well. You will see that in the 2023-24 budget. I can give you examples of where we are spending on preventative measures. I am keen that we do not lose sight of that, even with the pressure of the current demands on the service.

Thank you for that, cabinet secretary. Will you provide specific examples of how a preventative and proactive care programme has informed spending decisions? You have given some examples, but how important has that been in making those decisions?

One of the reasons why that programme exists is so that we do not lose focus on the preventative spend. It is not just about the health and social care portfolio, although that is really important. We take a preventative look through our entire budget from oral health right the way through to some of the areas that I mentioned, such as smoking cessation, obesity and so on. The Deputy First Minister also brings the cabinet secretaries around the table together regularly to talk cross-portfolio about what can we do around the preventative space. We all know about the socioeconomic determinants that can lead to poorer outcomes for health, and we have to focus on those as well. The whole family wellbeing fund or other funds that are focused on reducing poverty will also be crucial. The health and social care portfolio will certainly play a part in that.

I wonder whether I can return to the point about pay for the social care workforce. We have heard a variety of evidence in the committee, and in recent days we have heard that pay could really make the difference in terms of retaining people in the system. We know the challenges that exist, particularly when social care workers can earn more in Lidl, for example. Has the cabinet secretary done any cost benefit analysis or any other analysis of what the difference would be to the NHS in terms of attendance at A and E and delayed discharge if we were to move to a position of £12 an hour and then look to raise that to £15 an hour over the course of the parliamentary session?

We will regularly do those analyses. I do not disagree with the fundamental premise of Paul O’Kane’s question, which is that, if you pay people better, you have a better chance of recruitment and retention. We believe in that. Notwithstanding the fact that he and I completely agree on the premise of his question, we cannot take money out of the NHS, because we still need to deal with the demand pressures that we have in it. We cannot just take £1 billion out and say, “Right, we’re going to put £1 billion in here because we think that money is better spent here”. We will do that to an extent—that is the entire point of budgeting—but, at the moment, I could not justify taking the cost of £15 an hour, or even £12 an hour, initially, away from the NHS and putting it into social care.

I am keen to work with local authorities and to do what we can to continue to increase pay where we can, but it is not just about pay. I accept that pay is fundamental, but there are also issues with the terms and conditions of the social care workforce and their career progression. If there is more that we can do in that space, I am absolutely up for that. That is always part of the calculations and analysis that we do. Perhaps I should not put words in Paul O’Kane’s mouth, but I do not think that he is suggesting that we take the cost of paying £12 an hour out of the NHS just now and put it in to social care. That would have a significantly detrimental impact on the NHS at this stage.

Given the acute situation that we find ourselves in and the announcements that the cabinet secretary will make later this afternoon, that detailed piece of analysis on the benefit of increasing pay should stand alone and be done by the Government. I am sure that the cabinet secretary intends to make an announcement containing further detail about the beds that he will purchase in care homes. That will require a staffing element, and we know about the staffing challenges. It is not just that, because, obviously, there are care at home staffing issues, and I agree with him about terms and conditions. My sense from his previous answers is that we are being told that, four years down the line, the national care service will deliver all of this and we can move the dial. Does he not accept that we need to do more now and look at the issues right now, instead of wishing them away to the national care service?

I slightly disagree with the characterisation of the question, because I have made it abundantly clear that we do not intend to wait for the national care service to make improvement. In the time that I have been health secretary, we have announced three pay increases: £10.02, £10.50 and, for 2023-24, £10.90. We are not waiting for the national care service to come into place to continue to uplift wages where we can. That absolutely has to be a part of it.

I have nothing to add that you and I have not already rehearsed, but, if people are going to call for a wage uplift, which they are perfectly entitled to do and have good reason to do, they have to do that within the context of a fixed budget. Every penny of the £19 billion in my budget has been allocated. If you think that there should be an uplift in 2023-24 to £12 an hour, you have to spell out where those hundreds of millions would come from within that fixed allocated budget, bearing in mind that we have also made really difficult tax decisions, which I stand by full square because I think that those who earn more should pay more to strengthen our public services.

Convener, would you like me to move on to the national care service?

Yes.

Following on from that point, the cabinet secretary has outlined his 48p and lower pay rise this year for care staff. In the evidence that we have heard in this committee around the National Care Service (Scotland) Bill, there has been a lot of criticism about the process and about this being focused on structural change. He has already referenced the financial memorandum and the commentary of the Finance and Public Administration Committee. Does he not acknowledge that this is the opportunity to pause on the bill, to take account of all of that criticism and to look at how we deal with the immediate pressures in this financial year, and then to make a plan going forward that brings all of the partners who have significant criticisms around the table?

I will say a couple of things. You fleetingly mentioned a 48p pay rise, and it is worth my coming back on that slightly. The pay rises over the past two years, since 2021-22, mean that adult social care workers to whom we have given an increase have had an increase of £2,380. I accept that high inflation costs and so on have meant that the cost of living crisis bites, but £2,380 is not an insignificant uplift. It is 12.7 per cent, and it is important to put it in that context.

On your substantive question, I have said publicly that I am up for a discussion about the reprofiling and rephasing of the national care service. I do not think that that is the impact of the National Care Service (Scotland) Bill. It is a framework bill—an enabling bill. It is there to create the foundations of the national care service. On current plans, the care service will not be fully operational until the end of the parliamentary session and for good reason.

However, my door and my inbox are open, if Paul O’Kane, the Labour Party or any political party around the table wants a discussion on the reprofiling and rephasing of the national care service. I met trade unions before the festive period, and they indicated to me that they wanted to discuss that. I said that I would consider it, and I will do that. They have given me some of their concerns about the national care service, but I am generally up for a discussion. Anybody who proposes any reprofiling of the national care service has to make it clear what purpose and benefit that will have, as opposed to simply being seen to kick it into the long grass. I am trying to be constructive and helpful, and I am up for a discussion in that respect.

In that vein of being constructive and helpful, I do not think that what I have said is a surprise to the cabinet secretary, given that, in our robust discussions in the chamber and elsewhere, I have called for a pause for some time. If he is willing to have that consideration, that is welcome, and I hope that he will respond to COSLA, trade unions, front-line staff and others who are calling for that dialogue prior to the legislation going through its stages.

We will bring the discussion back to preventative spend. I have questions from Stephanie Callaghan and Emma Harper.

12:15  

You have touched on this already this morning, cabinet secretary. Existing targets so often define our priorities and our focus is on what we are measuring. Are you reviewing current targets and considering alternative targets? Can you give a couple of examples of successes?

On the latter point, we made a number of commitments—you can call them targets—in our manifesto. We committed to increasing our social care spending by 25 per cent over the course of the parliamentary session. We are well ahead of the trajectory to do that. I am confident that we will meet that target. Social care spending will increase by more than £800 million in 2023-24.

We have also promised to increase mental health spending by 25 per cent, to increase primary care funding, and that half of all front-line health spending will go into community health services—again, talking about that preventative agenda. We have looked at half of all front-line spending going to community health services. In 2020-21, the last year for which data is available, 49.6 per cent—effectively, 50 per cent—of spend was in the community, compared with 50.4 per cent that was not. We are almost there. I am confident about the increase to mental health spending as well.

I am confident that we will meet many targets that we committed to in our manifesto and programme for government. There will always be targets that we keep under review, depending on how pressured the health service is at any given time. I would be giving a false impression if I did not mention at this stage the pressures that we have faced over the past few weeks. For example, health boards have had to take really difficult decisions on reducing some elements of elective care. Clearly, that will have an impact on planned care targets, if they are unable to make up for that in future weeks and months.

There will always be targets that we keep under close review. Obviously, if there were ever any change to targets, this committee would be the first to know.

Emma Harper wants to come in.

Thanks for bringing me back in, convener. I am interested in picking up David Torrance’s initial point on preventative spend. I know that there is cross-portfolio budgeting and that a lot of the health and social care budget goes direct to local authorities. Some of it also goes to the third sector, and I will give an example of that. I have done work with the charity Beat, which received £400,000 from the Scottish Government to support its work to help people with eating disorders. Given that some of the health and social care budget goes to other bodies, including to local authorities—£35,000 goes to each local authority to look at developing an autism strategy, for example—is it difficult to track and evaluate the effectiveness of that funding?

That comes with challenges for sure, but that is the right thing to do.

Emma Harper and I are in agreement that the value of the third sector is enormous. We saw that pre-Covid and we certainly saw it during Covid. I will give you a couple of examples.

We fund a really good partnership project on oral health called eat well for oral health, which receives a relatively modest amount of funding. Two third sector organisations—Edinburgh Community Food and LINKnet Mentoring—work with the NHS to deliver the programme. I think that those organisations are known to many folk around the table. They have an oral health improvement model that uses food and nutritional skills as a medium by which to remove barriers and promote cultural understanding and dental services among families who are affected by, in particular, socioeconomic and racialised health inequalities. It is a good project that has a real-life impact on the ground. We are able to monitor the impact of that project.

Another example—we have not touched on this issue in committee, but it might well come up—is our investment in the communities mental health and wellbeing fund for adults. Over the past two financial years, £36 million has been provided, resulting in thousands of awards to community projects. Those focus very much on prevention and early intervention. There can be challenges in monitoring that, but we must have faith, as I do, in our third sector partners, and we must ensure that there is appropriate monitoring and governance of any distribution of those funds.

I have a final wee question about the cross-portfolio issue. Just before the Christmas recess, Richard Lochhead, the Minister for Just Transition, Employment and Fair Work, took a question in the chamber about the autism spectrum employment gap. He spoke about the support that is being provided to people. That reflects cross-portfolio requirements to support budgets.

However, sometimes, it is difficult to trace where a specific budget comes from. In that case, does the budget come from your portfolio or from the education and skills portfolio, for example? I am interested in peeling apart the complexities of the budget, and that is the cross-portfolio issue that I wanted to raise.

I do not have much to add. I have been in Government for more than 10 years and we have always been encouraged to work across portfolios. I can certainly say that, in this session, the Deputy First Minister has really made sure that any hint of silo working or compartmentalisation is quickly snuffed out. We are working exceptionally collaboratively.

There are lots of examples that we can give. Emma Harper has mentioned a couple, and the Glasgow pathfinder project that is set out in the tackling child poverty delivery plan is another. I agree with the premise of your comments.

Emma, I will let you continue, because you had specific questions about mental health spend.

The cabinet secretary has mentioned spending on child and adult mental health through the communities mental health and wellbeing fund. Obviously, we can continue to monitor the support through and outcomes from mental health funding. We know about the challenges for our healthcare professionals and for everyone else. I am not sure whether the cabinet secretary needs to comment further on that, but I am interested in that specific aspect of funding to support people’s mental health in Scotland.

I hope that our 2023-24 budget restates our commitment to mental health support. If you compare this year’s budget to previous years, you will see that we are up 6 per cent on 2021-22 spend and up 139 per cent on 2020-21, so there has been a significant increase in mental health spend over that three-year period.

There is little that I can add to what I have already said. The focus must be on prevention, but each of us, as a member of the Scottish Parliament, knows that a significant challenge still exists around backlogs in access to child and adolescent mental health services in particular and to other mental health services. Our focus—the budget demonstrates this—continues to be on doing our best so that people, particularly our children, adolescents and young people, can be seen in a timeous fashion.

The committee briefing paper refers to new models of primary care to address specific issues such as mental health. Will that be beneficial? We are looking to embed mental health support workers in GP practices for example. That approach should be a successful way to tackle mental health issues.

It depends on what you mean by looking at models of primary care. I am not looking at fundamental reform of the independent contractor model at the moment. We are where we are with the contract and this would not be the right time to upend the entire independent contractor model. That said, I am really up for a national conversation about our health services and their reform.

Over the years, we have seen a change in the model of general practice. Sandesh Gulhane mentioned multidisciplinary teams and allied health professionals in GP practices. They have been in place for a number of years, but there has certainly been a significant increase in the number of health practitioners in GP practices, from your physio to your advanced nurse practitioner, who all contribute to a general practice model.

This Government’s key innovations include the community link worker and the mental health wellbeing worker. I have a fantastic community link worker in my constituency. Anyone who has interacted with community link workers will know just how impactful they are as part of the general practice team. We will continue to invest in those additional members of staff in general practice. They are part of that more holistic approach to primary healthcare delivery.

Okay—thanks.

I will ask a question about alcohol and drug services. The budget shows a £13.6 million increase, which is equivalent to a 12.3 per cent real-terms increase, for tackling alcohol and drug problem use and its effects. It can be quite difficult for the Government to ascertain the effect of funding because much is delivered by alcohol and drug partnerships. Could those services be brought under the national care service? Might that be a vehicle to know how that money is spent and where it can be spent better to get the health results that we need?

I will take the second part of the question first. There is a genuine discussion to be had about alcohol and drug services being part of the national care service and the pros and cons of that. I can see the argument from those who oppose and have some concerns about that. We are taking time—we are doing research, working with general stakeholders and so forth—before we make any decisions about a number of services that might fall under the national care service.

As I said, the current plan is for the national care service not to be fully operational until the end of the parliamentary term. I have already given public commitments about entering into discussions with and hearing from political parties and, indeed, external stakeholders on whether they feel that that timetable is right.

Notwithstanding all that, and without putting words into my colleague Angela Constance’s mouth, whom I speak to on that issue very regularly, we have excellent ADPs across the country that do some phenomenally good work. Angela’s role is vital, because it gives us a national oversight of what is working on the ground and what is not. Of course, the lack of consistency was one of the reasons why the medication-assisted treatment standards were brought in.

You can bet your bottom dollar—this be of no surprise to the convener at all—that Angela is all over that with every single ADP and all the partners involved up and down the country. We have in place red, amber and green status, and we know who is doing well on what MAT standard and how far they are from whatever standard. Therefore, we—Angela will certainly do this—will keep a close eye on the governance and monitoring of that.

On the 2023-24 budget, part of the increase is an additional £12 million to deliver the cross-Government plan that will be published early in the new year. That speaks to the point that Emma Harper was making on that cross-Government, cross-portfolio working.

Thank you. We have a final question from Sandesh Gulhane.

Thank you, cabinet secretary. I have been contacted to ask you a question, which I will read out to you:

“Can you please ask the Scottish Health Secretary who is going to do the 1.5 hours which they are proposing to cut from my working week as part of their proposed pay rise. We are a small group of specialist nurses ... this cut means we will lose around 5 working days each month from our team at a time when we are on our knees, they are putting more pressure on us by expecting the same work in less time ... or just taking advantage of the good will of nursing staff”.

12:30  

Thanks for the question, and thanks to the individual who asked the question. First, the reduction in the working week is one of the issues that trade unions have brought forward. That fundamental issue was raised by those who represent the workforce at the regular meaningful engagement that we have with trade unions as part of the pay negotiations. It was not something that was necessarily brought forward proactively by the Government or, indeed, by employers. We thought that it was important to listen to the trade unions and that is why we have made a commitment to the reduction of the working week.

Clearly, the reason why we have not said that we will do that by tomorrow, next month or within a short or narrow timescale is for precisely the reasons that the individual who has contacted you highlighted: we would have to look at the implications for staffing.

We are committed to continuing to invest in our workforce. Inevitably, that will mean growing it. If we are going to reduce the working week, there is no doubt we will have to look at filling some of the significant numbers of vacancies. I would be the first to admit that there is a significant number of vacancies in nursing and midwifery.

I hope that the individual who asked that question will be reassured that we will work through the detail before we implement a shorter working week. We must understand what the demand pressure on the workforce and the impact on services would be, and then ensure that we have adequate staff to respond to that.

To what timescale will that happen?

We have not yet defined the timescale for exactly the reasons pointed out by the individual who contacted you. There are some real complexities that we have to work through. Employers are committed to sitting down with trade unions as soon as possible to work through the detail of those. Once we have the timescales, we will be open and transparent, and we will make them public.

That seems to be all our questions. I thank the cabinet secretary and Richard McCallum for their time. We will see the cabinet secretary again next week, when we will be looking at the evidence of three public petitions that have been passed to us to consider. The cabinet secretary will also provide evidence on an affirmative instrument.

That concludes the public part of our meeting. Thank you.

12:32 Meeting continued in private until 12:33.