Welcome back. We will now turn to agenda item 3, which is consideration of the 2024-25 audit of NHS Grampian, which has warranted the production of a section 22 report. I am pleased to welcome back the Auditor General, Stephen Boyle. I also welcome back Leigh Johnston, who is a senior manager at Audit Scotland. We are joined for this session by Alison Cumming, who is executive director, performance audit and best value, at Audit Scotland.
Before we ask our questions, I invite the Auditor General to make an opening statement.
As you mentioned, convener, I have prepared a report on the 2024-25 audit of NHS Grampian under section 22 of the Public Finance and Accountability (Scotland) Act 2000. For the second successive year, NHS Grampian required brokerage to help it achieve financial balance. It received £65.2 million from the Scottish Government in 2024-25 in addition to £24.8 million that it received in the previous year, for a total of £90 million. The level of brokerage that it received in 2024-25 was the highest of any health board in Scotland.
NHS Grampian successfully delivered savings above its targets during 2024-25 but that, in itself, did not enable the board to reduce the in-year overspend. This was mainly as a result of significant overspends across the local integration joint boards. NHS Grampian provided £22.4 million of additional funding to IJBs at the year end in line with what is known as its agreed risk-share arrangements.
NHS Grampian’s medium-term financial plan reveals that the board’s cost base is also unsustainable based on its current funding levels. It projected a £68 million overspend for 2025-26, which resulted in its initial budget not being approved by the Scottish Government. The Scottish Government set an overspend limit for the current financial year at a lower figure of £45 million, resulting in NHS Grampian having to identify a further £23-million worth of savings. The Scottish Government’s expectation is that NHS Grampian will develop a recovery plan to reduce expenditure and operate within that set limit.
In May 2025, NHS Grampian was escalated to stage 4 of the NHS Scotland support and intervention framework for reasons of financial sustainability, leadership and governance. Alongside the issues around financial management, the board was escalated due to rising concerns about local services and performance against national priorities and standards, including some quality concerns raised by regulators.
NHS Grampian has experienced significant operational pressures, including the fact that it had to declare a critical incident for three days in November last year, leading to the board formally registering what it referred to as “intolerable strategic risks”.
In June 2025, the Scottish Government commissioned KPMG to undertake a diagnostic review of the financial position of the board. An improvement plan is being developed, which will incorporate the board’s response to these recommendations and include measures around performance improvement, financial sustainability and transformation for a sustainable, affordable future. The appointed external auditor of NHS Grampian notes that it will not be possible for the board to return to financial balance without either significant redesign of services or a fundamental change to its funding model from the Scottish Government.
Leigh Johnston, Alison Cumming and I look forward to answering the committee’s questions.
Thank you. To get us under way, I invite Graham Simpson to lead off.
Auditor General, at the end of the earlier evidence session you rightly said that not all boards need extra money from the Government. For 2023-24, there were eight boards that needed that money: NHS Ayrshire and Arran; NHS Borders; NHS Dumfries and Galloway; NHS Fife; NHS Grampian; NHS Highland; NHS Orkney; and NHS Tayside. Do you know whether that is the position for 2024-25?
I will bring Leigh Johnston in to answer that. As I said, we will set out that detail together with some of the analysis and commentary on it in our NHS overview report, but Leigh Johnston has the numbers to hand so we can share that with the committee.
In 2024-25, seven boards required brokerage. The only one of the boards that you listed that did not require brokerage was NHS Tayside.
I know that we are not here to talk about NHS Tayside but do you know why it did not? What happened?
NHS Tayside would have met its financial targets. That health board will be considered at this committee in a couple of weeks, so the Auditor General will be able to give you some more insight into that at that time.
Just for completeness, Leigh Johnston is referring to “The 2024/25 audit of NHS Tayside”, a section 22 report that I published last week. We can set that out in more detail for the committee in the coming weeks, but the report is primarily about its provision of mental health services rather than its financial position.
Okay. The report into NHS Grampian’s overspend says that it has the largest overspend by value of any health board in Scotland and the fifth highest in percentage terms. Do you have figures for the overspends of other boards that could give us an indication of the extent to which NHS Grampian has the highest overspend?
11:00
I have figures for the levels of brokerage that different boards received. In 2024-25, NHS Grampian received £65.2 million, as we have just discussed; NHS Ayrshire and Arran received £51.4 million; NHS Highland received £49.7 million; NHS Dumfries and Galloway received £26.2 million; NHS Borders received £13.3 million; NHS Fife received £21.5 million; and NHS Orkney received £3.9 million.
Okay. Thank you for that. NHS Grampian recorded the largest overspend by value of any health board in Scotland. Do you have comparative figures for the next highest overspends? I am asking about the largest overspend by value.
By value, the next largest overspend would be NHS Ayrshire and Arran.
The report also says that
“One of the key areas of financial pressure was staff costs.”
We discussed that earlier in relation to NHS Ayrshire and Arran. Do you know the extent to which NHS Grampian relies on agency staff?
I do not have that detail with me.
We know that agency staffing has been an area of focus for NHS Grampian in its savings plans over the past few years. It has been reducing its reliance on agency staffing and that has contributed to some of the savings that have been recorded for 2024-25 and are projected for 2025-26.
I will just come in on staffing in the round. Staffing was a key feature of the KPMG review of NHS Grampian’s service model. For example, the review highlights that NHS Grampian’s workforce grew by nearly 14 per cent from 2019-20, predominantly in relation to nursing, medical and dental staff. In contrast with that, the activity metrics declined in the same period. As I mentioned in my opening remarks, it is for NHS Grampian to assess and analyse that. We are referring to productivity, which is a complex topic, and to why increased staffing is not then translating into increased activity, so there is a key need for the board to do that analysis to be satisfied as to why that is the case. The improvement plan and the consideration of the recommendations will be a fundamental next step for the board.
Do we know how it has managed to reduce the amount of money that it spends on agency staff?
We may be able to come back to you on that if we have more on the issue in our records. We can certainly share more detail across the piece. In the earlier evidence session, I think that we mentioned the concerted efforts that have been made across the country to reduce agency costs, particularly in nursing services. Leigh Johnston may want to say a bit more about that.
Again, convener, we will give more detail on the issue in the round when we come back to the committee with the overview report, but if we have more insight, we can offer that to the committee.
As I said, there has been a real drive from the Scottish Government. During the pandemic in particular, there was a massive increase in the use of agency staff. As we have come out of the pandemic, there has been a real focus, particularly in the financial delivery unit, the Scottish Government’s finance department and the health and social care finance department, and a real drive to have a grip on and control of the use of agency staff. There have been attempts to find other ways to reduce the use of agency staff, such as using more bank staff instead, which generally enables better continuity of care but is also more efficient when it comes to the cost of additional staff.
This is my final question. Looking ahead, given the situation that NHS Grampian appears to be in, how realistic is it that it will ever break even? In paragraph 21 of your report, you say that the board is predicting an increase in costs of £370 million over the next five years. That seems to be a massive challenge. The board must cut costs, but costs are going to rise by £370 million.
It is essential that a realistic plan is prepared that is not driven by a budgetary cap from one year to the next but reflects available resources and service provision models. I do not wish to avoid addressing your question, but it is a question for the board. Do the board and the Scottish Government have confidence that they can produce a realistic, affordable model for services? I support the auditor’s finding that that will be delivered through either a reform of the funding base or a reform of services—or both.
I agree. These are not really questions for you; they are questions for the Government and the board. I shall leave it there.
I have a question before we leave this area. Auditor General, you have mentioned the KPMG report a couple of times. One of the key messages that the auditor attached to the report is that staffing levels are out of kilter with the number of beds in NHS Grampian. The report goes on to cite different grades. It says, for example, that there has been a 16.4 per cent increase of nursing whole-time-equivalent staff in the past three years, a 17.8 per cent increase of medical and dental WTEs, an 18.2 per cent increase among the administrative staff, and an increase of over 33 per cent when we get to other therapeutic staff. KPMG’s argument is that there are far too many people employed by NHS Grampian and that its cost base is out of line; it says that that is a deficit driver that it would not expect and so on. However, if the narrative is that these are positions that were previously outsourced to agencies at great expense and have now been brought in-house, that might be a good thing. Do you have a view on that?
Alison Cumming may want to come in on this, but I am not sure if there is a direct correlation between services that were all staffed by agency workers and services that are now being provided in-house by the health board itself. I would not say that KPMG has made a judgment; I think that it is pointing out, as an area to be investigated further, that workforce numbers and costs have increased but that, as you mentioned, convener, the ability of the board to deliver services is somewhat constrained. That is not new from NHS Grampian, but it is relevant in relation to its bed capacity. Paragraph 26 of the section 22 report says:
“NHS Grampian has the lowest bed base in Scotland, approximately 1.4 beds per 1,000 population. The next closest mainland board has approximately 2.0 beds per 1,000 population,”
Some of that will be about physical capacity within the NHS Grampian estate, but I think that it is worth the board exploring whether it is satisfied that its staffing models—whether based on agency staffing or directly employed positions—are appropriate to deliver services for its population.
It is exactly as the Auditor General has said. KPMG has found two things that it cannot reconcile between the reduction in beds and the increase in staffing. It points to reasons why nursing staffing levels in particular would have increased over time, including the introduction of safer staffing legislation, increased acuity in terms of how patients are presenting and changes to care models. We think, and the auditor thinks, that the board would benefit from some form of independent peer review to better understand how its staffing position, compared to activity levels and bed levels, compares to what happens in other boards and see what further action it may wish to take in response.
I am not quite sure that that is what I took from the KPMG report. You have said, and it is in your section 22 report, that NHS Grampian has the lowest bed base per 1,000 population and so on, yet one of the things that is highlighted in the KPMG report is that there has been a further reduction in the number of beds available in NHS Grampian. It also goes on to talk about how artificial intelligence could be brought in to replace some of what it describes as lower grade staff. I am not quite sure whether we would sign up to that, but there are some ideas out there about how things can be streamlined, are there not?.
I guess that there are broader questions here about bed numbers, which is an issue that came up in our discussion about NHS Ayrshire and Arran. Is reducing the number of beds one of the Government’s targets as a means of driving down the cost base in territorial health boards?
I do not think that I have seen a direct target from Government to do that. It is a question that needs clarity about what the service model is and what the planning provision is. Again, building on the detail from the service renewal framework and both financial plans and service delivery plans, it is about having that precision about what the service from both acute and primary care is going to look like in the years to come.
On NHS Grampian specifically, I would not necessarily align myself with all the analysis that KPMG has done, but it is important that it is considered by the board, together with the Scottish Government.
Perhaps this is a contrast with the previous evidence session. NHS Ayrshire and Arran is at level 3, whereas NHS Grampian is at level 4. This is one of the models of difference. There is a comprehensive independent analysis of some of the drivers for NHS Grampian’s cost and service provision model. I think that it is important that the board, together with the Government, takes a considered view of whether there are any levers that it can then use that can help it to move to that sustainable model that the auditor is recommending.
Fine—thank you. I will now invite Colin Beattie to put some questions to you.
Auditor General, I would like to look at IJBs. Clearly, they are a very significant factor in the particular case of NHS Grampian, although that is probably true right across the board, given previous reports that we have had from you.
In paragraph 8 of the section 22 report, you talk about NHS Grampian successfully delivering £15.6 million of additional savings in 2024-25. However, over the same period, it provided extra funding of £22.4 million—a huge sum of money—to the IJBs in its area. Where does the responsibility lie for addressing overspends in IJBs, and what actions are being taken to manage that?
I will bring in Alison Cumming, who will be looking at some of this in detail—and not just for NHS Grampian. The committee will know that, on my behalf, Audit Scotland has been doing some joint work with the Accounts Commission to look at IJBs’ financial results. We will publish that work early in the new year.
Alison Cumming is well placed to address the specific points that you raise.
It is about the IJBs and their local authority and NHS board partners coming together to ensure that they are financially sustainable. NHS boards and local authorities also deliver services on behalf of IJBs, so they need to look at whether they are driving out all the opportunities for efficiencies and savings within the services that they are responsible for.
However, we see questions arising, and NHS Grampian is not alone in having had to provide additional in-year contributions to its IJBs, although the situation was particularly acute for NHS Grampian. The Accounts Commission has been encouraging a real focus on getting budget setting right for IJBs, so that there is certainty at the start of the year over what needs to be done to deliver balance.
11:15There have been particular pressures and issues in IJBs in terms of demand for care services being greater than estimated. They are also dealing with the same issues that face other public services of pay inflation, national insurance employer contributions and so on; they also often have to deal with the budgetary implications around primary care prescribing.
What has probably changed in the past couple of years is that although IJBs often built up reserves in their first few years of operation, those reserves are increasingly being depleted. Across Scotland, we saw IJB reserves fall by 40 per cent in 2023-24, which is the last year for which we have completed analysis. In relation to the three IJBs of which NHS Grampian is a partner, Aberdeenshire IJB’s reserves were depleted to zero in 2023-24, and Aberdeen city IJB and Moray IJB were holding reserves at the end of that financial year that were below 3 per cent of their annual net costs. For Moray IJB, the only reserves that were left were earmarked reserves, so there were no contingency reserves left to meet overspend. The Accounts Commission has been encouraging more proactive financial management and financial planning, because the reserves are no longer there for IJBs to rely on.
We know that NHS Grampian has responded by creating an increased risk provision for IJB pressures in 2025-26 of as much as £38 million. The most recent reporting to NHS Grampian’s board indicates that the board considers that that will be sufficient provision to meet additional contributions within the current financial year.
It is probably worth noting at this point that local councils also report making considerable contributions to IJBs, which frequently impact heavily on their budgets. That said, there is a reference in your report to agreed risk-share arrangements. How do those apportion the amount of money that gets paid in by the different component parties, which are, basically, the councils and the NHS?
It is a matter for each IJB to agree how overspends are dealt with. Some will have a formula, and my understanding is that there is an agreed risk-share arrangement for the NHS Grampian IJBs. It may be that the partner that delivers the services that incur the overspend then bears the consequence of that overspend, whereas the risk-share arrangements pool the risk more between the council and the health board.
Given that there are different component parties in IJBs, where is the most stress coming from in IJBs that result in these demands?
It really is around increasing demand for care services resulting from the pressures of an ageing population. The Auditor General referred to that as being a particular issue for NHS Grampian, where a particularly ageing population is forecast. It has already seen an increased proportion of over-65s, which will soon become an increased proportion of over-75s at a time when the overall population is not increasing. The relative pressures on the care system are increasing in the NHS Grampian area, and there will be particular issues there around acute bed capacity and a particular need to ensure that patients are receiving the care that they need in the most appropriate setting.
Is there not a circular issue here for the NHS? If you do not provide adequate care services, there will be bed blocking, which will have an impact further down the line. Are you not just making a new problem?
You are absolutely right. It is a reflection of an interconnected system with changing demographics and growing demand for adult social care. The impact of that does not reside solely within the IJB; it will affect the NHS in due course. Again, I note for the committee’s interest that, alongside the IJB output that we will publish in early January, we will also publish our joint report on delayed discharges and how the system is operating in Scotland. We will bring that report to the committee in due course.
Where is the responsibility for addressing the overspends? Wherever I hear about them, they are significant—we are talking about millions of pounds. Somebody must be in charge of that, in control of that and managing that. Who is it?
That must happen between the three entities—the IJB, the health board and the council. As you rightly pointed out, the IJB is an arrangement between the council and the health board, so there must be a consensus about preparing realistic budgets—Alison Cumming mentioned that and I support the Accounts Commission’s view, which is quite right. It sounds as if NHS Grampian has set a realistic figure for 2025-26, which I am sure it hopes is sufficient to meet its risk-sharing obligations.
There is a wider point about the sustainability of the model for adult social care. There has been much discussion about and parliamentary consideration of how to move from the model that we have in Scotland. That is where we are at. A huge societal issue is presenting to be tackled in how we can deliver a sustainable model of adult social care provision in Scotland.
Is any tangible action being taken at the moment?
We will set out more detail in the delayed discharge report. On adult social care, there has been parliamentary consideration of legislation around social care models. Inevitably, it will take time to assess what is making a difference, together with the preventative model ambitions of keeping people healthier and out of hospital for longer, which we have mentioned a couple of times today. Those are the fundamental next steps to move from the challenges of today into a more sustainable model in the future.
In your report, you say that the IJBs are a “significant barrier” to NHS Grampian achieving a balanced budget. Would you say that that is the primary reason?
Not to contradict you, but I am not sure that saying “barrier” is a fair representation. I think that it is a factor in the model. In reality, the NHS, and NHS Grampian specifically, cannot step out of the IJB arrangement. It must have ownership of the issues that affect health and social care in its locality, so it is about the reality of what that will cost.
Alison Cumming might want to say more about this, but I echo the Accounts Commission’s judgment about realistic budgeting and NHS Grampian working with its partners in the council to understand its population and their needs, to signpost them to the right level of support and care, to have interventions at a far earlier stage to keep people healthier for longer and out of hospital, and to provide the right level of tailored support for individuals. That is all part of a very complex system. Working with the councils and the Scottish Government, with the support that the Government provides, will be the key to getting out of what is a very challenging situation and avoiding the reactive arrangements that might be characterised by some of the financial problems.
I do not disagree with what you say, but it seems to me that if we look at this very crudely, the IJBs in this case—and, for all I know, in other cases across other NHS boards—are having a very significant impact on the budgets and possibly, although I am speculating a little bit here, they could be the core factor in driving NHS boards into deficit. If so, should there be some concerted effort to manage that? The issue is not going to go away.
On that point, NHS Grampian published a medium-term financial framework earlier this year, and it projects that, for services that the board has not delegated to IJBs, it would return to financial balance in 2028-29. It is the continued pressures through the services that are delegated to the IJBs and the financial obligations that the board has through the IJBs that will result in the board being in deficit for a longer time, so that remains, and will remain, a significant factor.
We acknowledge that the Accounts Commission recognises that more needs to be done in that partnership space at local level—although it is not all IJBs or all parts of the country—to better learn from where this is working well what needs to be done to get more robust, realistic and transparent budgets in place for the start of the year and to have agreements in place about managing the in-year risk and minimising the exposure to the other bodies.
It is an area of increased and continuing interest for the Accounts Commission in relation to the sustainability implications. From the Accounts Commission point of view, it is about the IJBs and the councils, but it is undoubtedly a system issue for health and social care in Scotland. From the way in which the accountabilities work, and with IJBs being local government bodies, we certainly know that the financial delivery unit in the Scottish Government is focused on the NHS services and does not have any locus in the social care dimensions. Therefore, for the services that are delegated to IJBs, we do not see the same concerted national effort to generate the potential savings schemes and gain learning as we do for what we might describe as core NHS delivery.
If we are talking about the need to redesign IJBs, surely there must be a joined-up effort in taking that forward. You cannot look away from that. Local councils and the NHS must get together and either come up with a new formula or accept that additional funding will be needed to meet those needs.
It is very clear that the need for sustainability does not confine itself to the boundaries of budget setting—it is not the case that this is the health budget and that is the local government component; there will have to be a system-wide consideration of sustainability.
To echo Alison Cumming’s point, it is not the same everywhere. Not all IJBs or all health boards are experiencing a level of financial challenge, but it is important to know whether the insight and analysis that exist to make that contrasting assessment could be improved.
Audit Scotland hopes to contribute to that understanding when we publish in early January the report that we have referred to on IJB finances, for which we will prepare a data tool to allow people to interrogate how services compare and contrast across different IJBs, which we hope will be a helpful contribution to offering some insight into the different performances across the country.
Thank you very much. Of course, the IJB structure was set by legislation passed by this Parliament, so it is very much of interest to us that you are doing further work in this area to see whether the intention has been carried out in the implementation.
I will invite Joe FitzPatrick to put some questions to you.
I will start off with some questions about the NHS Scotland’s support and intervention framework escalation. We know that NHS Grampian was escalated to stage 3 in January 2025 and then, just four months later, it was escalated to stage 4. Was that too late? That seems like a rapid escalation. What went wrong that required it to move so quickly from stage 3 to stage 4?
We touched on aspects of that in the report. Effectively, we say that the differential between stages 3 and 4 reflected the Scottish Government’s lack of confidence in the financial trajectories set out in financial plans that were submitted by the board to the Scottish Government.
On timing, that is probably a matter of consideration and judgment by the Scottish Government. We talked in the earlier session about how stage 3 for NHS Ayrshire and Arran lasted seven years. For NHS Grampian to escalate from stage 3 to stage 4 within a matter of months is significant and probably reflects the level of confidence that the Scottish Government either had or did not have in the financial plan.
11:30It feels like there was a marked difference in what the Scottish Government sought to do regarding assurance board arrangements, along with commissioning the external reports that we mentioned from KPMG. I do not underestimate the significant difference between stage 3 and stage 4. From our perspective, what matters is what will happen next. What consideration will be given to address the finding in the report that the auditor referenced about what combination of reform or change to the financial position is required to move to a sustainable model?
Will you say a bit more about the difference between stage 3 and stage 4 and what that meant for NHS Grampian in dealing with the challenge?
I am happy to start. As set out in paragraph 16 of the section 22 report, as a result of being at stage 4, an additional layer of governance, as well as the reporting, was brought in. First, an assurance board, chaired by the Scottish Government, is created to report to the chief operating officer of NHS Scotland and the chief executive of NHS Scotland and director general health and social care. It is not about intervention or special measures in the sense that you would get to a further layer; the responsibility for delivering healthcare and making governance decisions still rests with NHS Grampian. Clearly, the KPMG report that was commissioned by the Scottish Government, together with the assurance board arrangements that are in place, are a step change.
What matters is not just adding a layer but that it results in change and a move to a different model. I will pause in case colleagues want to come in with any more detail on the distinctions.
This is not really about the distinction, but when you compare NHS Grampian going to stage 4 and NHS Ayrshire and Arran going to stage 4, a key factor was the concerns around the quality of services that were raised by Healthcare Improvement Scotland. I guess that Healthcare Improvement Scotland then revisited that and felt that the board had not responded in the way that Healthcare Improvement Scotland had hoped to some of its concerns. That raised concerns about leadership of the board, which I think also contributed to NHS Grampian being—
So this was about more than just money.
It was about the quality of the services and service performance.
You mentioned leadership. I will ask similar questions to those that I asked about leadership at NHS Ayrshire and Arran. I think that KPMG suggested that, in some meetings, the board provided a good level of challenge to the leadership team. However, given the answer that we received in relation to NHS Ayrshire and Arran, I am guessing that board members sometimes did not have all the information that they needed in order to provide effective challenge. Is that problem common to both boards, or is the situation at NHS Grampian entirely different?
Broadly, that is a fair assessment. The complexity of dealing with an on-going financial challenge will undoubtedly consume board attention, but there are a couple of differences. Alison Cumming might want to talk about the detail of the judgments that the auditors have made about NHS Grampian’s governance arrangements.
As we discussed in relation to NHS Ayrshire and Arran, there has also been a change of executive leadership at NHS Grampian. When a new chief executive comes in, they have the opportunity, along with the board and the Scottish Government, to take stock and to come up with a path to sustainability.
The appointed auditor found that there was regular reporting to committees on the financial position and did not flag any specific concerns about the operation of governance arrangements within the board. However, although the auditor found that NHS Grampian has arrangements for securing best value, they recommended that the board should undertake its own assessment against the best value framework to assure itself that it has the necessary arrangements in place to deliver continuous improvement.
The KPMG report suggested that meetings, especially of board sub-groups, were still being undertaken online. Do you have any thoughts on whether, in that context, online meetings are as effective as in-person meetings?
I have not given a great deal of consideration to that. In my personal view, governance is best discharged in person, but it can vary. I have seen appropriate challenge and scrutiny being undertaken in both an online and a hybrid format.
To go back to KPMG’s wider points, if the board is doing an assessment of its best-value arrangements—whether in an online meeting or otherwise—governance is a factor that it should give proper consideration to.
I just feel that, if things are escalating, maybe it is time for people to get in a room together and spend a bit of time—
My natural instinct would be to say yes, in-person meetings provide a better understanding of the context, by enabling people not only to see and hear the speaker, but to take a view of body language, dynamic culture and all the factors that it is perhaps not possible to have full insight of when it is a remote meeting.
That is a moot point and a question for our times, is it not?
I now invite the deputy convener to ask some questions.
I draw your attention to paragraph 14 of the report, which I read with interest. We have spent a lot of time talking about the finances of the board, but it seems that that is not the only issue here. There are concerns about performance, services, quality and the existence of “significant operational pressures”. Could you talk us through the concerns that you identified, other than those to do with the financial problems at NHS Grampian?
I am happy to do so. I will bring in Leigh Johnston, who can set out for the committee some of the detail in relation to NHS Grampian and the views of regulatory bodies about what I referred to in my opening statement, which was the identification by the board of the “intolerable” strategic risks that it felt that it faced. The committee may recall that that took place about 12 months ago, when it was reported that the board considered that its ability to deliver services safely in the way that it wanted to was threatened. That, together with the views of regulatory bodies on NHS Grampian’s ability to respond to some of the pressures, was fed into the Government’s consideration of what that meant for its support and intervention framework.
Leigh Johnston, are you happy to start on that?
Yes, I can give a bit more detail. Healthcare Improvement Scotland inspected both Dr Gray’s hospital and Aberdeen royal infirmary. There were significant concerns about Dr Gray’s hospital, which related to cleanliness standards not being consistently met and issues with patient privacy and dignity. We have talked about the low numbers of beds, which resulted in beds being in corridors and areas other than wards. That presents challenges for patient privacy and dignity.
There was also non-compliance in relation to the safe management of drugs, with, for example, medicine cabinets being left open, and there were issues around staff hand hygiene and ensuring that clinical leaders had enough leadership time.
As I said earlier, Healthcare Improvement Scotland made a number of requirements in its first inspection. When it went back for a follow-up inspection, it found that a range of those had still not been addressed. That gave rise to further concern, which led to the chief executives of Healthcare Improvement Scotland and NHS Education for Scotland coming together—unusually—to write a joint letter to the board about their concerns. NHS Education for Scotland had a range of concerns about medical education and the leadership of medical education within NHS Grampian—for example, it felt that some of the training programmes and the support for trainees were not at the level that it would expect.
Of course, there was also the critical incident that was declared at Aberdeen royal infirmary, which was in the news. That related to unscheduled care, ambulance turnaround times and the significant pressure on the acute system, which meant that the board had to declare a critical incident. That led to ambulances queueing outside the hospital and people being turned away and having to go to other hospitals further away. That lasted for only three days, and the board did its best. It got a lot of help from surrounding boards to address the situation. Those are the other quality and performance issues that led to concerns.
Thank you for that comprehensive answer, which was very helpful but also very concerning. You mentioned beds in corridors, cleanliness issues, safety issues and staffing at dangerous levels. It is hard to believe that we are talking about the health service of a first-world country; the conditions that you have described make it sound like the health service of a third-world country.
However, I am keen not to scapegoat the staff in the hospitals, who, I am sure, are working in difficult conditions. Is there any evidence that none of this is the fault of the hard-working nursing and caring staff, the cleaners and the caterers—the people who deliver the services in such tough conditions? Is the problem higher up the chain?
I do not think that we can escape the capacity context that NHS Grampian is operating in. We touched on its bed base and how that compares with the bed capacity in other parts of mainland Scotland. More detail is provided in paragraphs 26 and 27 of the section 22 report. Paragraph 26 says:
“NHS Grampian has the lowest bed base in Scotland, approximately 1.4 beds per 1,000 population. The next closest mainland board has approximately 2.0 beds per 1,000 population, while the Scotland median is 2.4 beds per 1,000 population.”
That shows that NHS Grampian faces markedly different capacity issues relative to other parts of the country.
The board is alert to the issue. In September of last year, a review was produced that highlighted that the provision of additional bed capacity would be critical in enabling Aberdeen royal infirmary to respond to in-patient demand levels. There are indications of sustainability and service pressures with the current level of capacity, but it is quite reasonable to note—while I do not want financial issues to dominate the discussion—that, for the board to move from where it is now as regards bed capacity, significant additional investment, whether in relation to resource, how people are used or estate provision, will be required, and that is in the context of a health board that is receiving considerable brokerage and loan funds to deliver financial balance. All of that needs to be squared if the board is to be able to move to a sustainable model in which, ultimately, staff and patients receive the experience that they ought to receive in NHS Grampian.
Thank you, Auditor General. How can a hospital run out of beds? Is it that suddenly and very quickly there is an unexpected wave of people who are very unwell or is it because of poor planning and forecasting capacity?
I am not sure that I would characterise it as one or the other. I go back to the critical incident—and Leigh Johnston might want to say more on this—which was about unscheduled care, with people arriving for services from the health board that led to it not having capacity, the result of ambulances then queueing outside and not having the throughput through the hospital. What happens at the other end of the hospital system is also relevant in the context of the availability of care packages. We refer to that as delayed discharge.
It will be the result of a combination of events that take place and the known structural issues that affect how a health and social care system operates. It is both. It is not just about what happens in the hospital, but—to go back to Mr Beattie’s questions—is about how all of this system operates. It is clear that the system is facing real capacity and pressure issues.
11:45
Is any of that a surprise to anyone? We know that there is an ageing population, particularly in this health board area. Demographic analysis has been done—using data, presumably. It would not have been a new problem, but would have been known to the board and, indeed, to ministers for some time.
The idea that it is a surprise that lots of people who are elderly and unwell might present at A and E—setting aside the issue of Covid or an unexpected health issue, which clearly people were not prepared for—seems surprising; I am surprised that this is a surprise to people.
In terms of our interest, what triggered the section 22 report is the fairly quick escalation of the board to level 4 of the support and intervention framework. As Mr FitzPatrick points out, in a number of months this health system moved, initially, to level 3 and then to level 4 .
It would probably be unhelpful for me to speculate on this, and it may be more for the health board and for the Scottish Government to express a view, but things seem to be happening at pace in recognition of the scale of the issues being experienced within NHS Grampian. Contrast that with the example of NHS Ayrshire and Arran, which we spoke about earlier, which spent many years—seven years—at a certain level of support. That does not seem to be the position with NHS Grampian.
None of it means that there are not issues that really need attention. I support the view that the auditor took, that reform or recasting of the funding—or a combination of both, I suspect—will be needed to move to a sustainable model.
That leads nicely into what the solution is. Is it just throwing more cash at the problem? Is it the end-to-end fixing of all the problems that response times for A and E, bed-blocking and delayed discharge present? Do we need more staff? How do we solve these issues? You can either write cheques endlessly to health boards or have a systemic root-and-branch review of the entire journey from being ill to getting home again.
The response is more in the latter than the former. I do not think that public finances will allow for on-going financial support without a wider look at how the money is being spent. As we have touched on, the KPMG report was beginning to explore some of the detail of that, including considering increased staffing levels—whether it is the transfer in from agency workers or there is an issue of capacity not being able to be deployed in the way that the board would like because of bed levels—how the arrangements with the IJBs are working and whether the estate within the health board is suitable to deliver the service model, and then the board playing its part, as I am sure that it is, in considering moving to a more preventative-based model of healthcare.
The challenges presenting within NHS Grampian are pressing. Therefore, while I am sure that full consideration is necessary, it is clear that there is urgency in the financial position and some of the service performance indicators, which I am sure that the board, together with the Government, will need to address.
Thank you. That is a very succinct analysis of the wider problem. Is the solution to the bed issue a new hospital or a new site? You state that there are physical issues in the estate, so the answer to that clearly is a new building, more beds and more people.
That is a question for the board, together with the Scottish Government, as part of capital planning and service planning arrangements.
Going back to the director general’s letter to the committee, the Government’s consideration of how and where services are being provided—whether they are local or national centres—will undoubtedly be part of that. We know that the board is also undertaking service capacity growth and new health provision is also being built.
That is a wider question for NHS Grampian, which needs to reassure its own board, the Government and the committee, about how it is planning to address those challenges.
The assurance board has a role to play in all this and will be there for the foreseeable future until things have turned around.
Is the improvement plan forthcoming? Where are we at with that? Has it been signed off? Has it been ratified? Are people happy with it?
We have not yet seen the improvement plan. I did look at the assurance board minutes. The last assurance board was in October and it talked about different improvement actions that were taking place, particularly around planned and unscheduled care, driving efficiencies and savings, and looking at productivity. Of course, the appointed auditor will be looking for that improvement plan as they plan for the coming audit.
Okay. I will finish where we started. As I understand it, this is the first time in 20 years—two decades—that a section 22 report has been presented to Parliament on NHS Grampian. The final question from me is: what has led us to this point? In the report, you start off by talking about the financial position: the £65.2 million brokerage in the financial year that the audit is from, the loans outstanding being £90 million and so on. If it was just the financial position alone, would that warrant a section 22 report, or is it warranted by a combination of the financial position together with those performance issues, the Healthcare Improvement Scotland inspection of Dr Gray’s in Elgin and the traffic-light performance review attached to the report, which shows there are some major areas of concern in delivery of key treatments? Is it around the bed capacity issue? If it was just performance issues, would there be a section 22 report? If it was just financial issues, would there be a section 22 report? Is it because there are both sets of issues that it warrants, in your view, a section 22 report presented to Parliament to outline your concerns?
Convener, there is no precise model for a section 22 report. It is a matter of judgment for me, based on the findings presented by the external auditor across the piece for public bodies in Scotland. In isolation, the receipt of £65 million of additional year-end funding is significant. There is the opportunity cost of public spending for that amount of money. All the other factors are, of course, relevant but a financial position is indicative of something else.
All the issues that the committee has considered this morning that are set out in the section 22 report and the annual audit report are indicative of a system that is under pressure within NHS Grampian, and of issues with its capacity and ability to respond. The Scottish Government is recognising that with its escalation, and by commissioning external views to support the board.
I go back to the conclusion in our report: either the financial position needs to be addressed or there needs to be a reform of the system. I think that the latter will give a sustainable model of health and social care working across partners, and especially a sense of how the local authority and the health board, together with the Scottish Government, can move to a clear, sustainable, end-to-end health and social care model in NHS Grampian and surrounding areas.
Okay, thank you. On that key message, we will draw this morning’s evidence session to a close.
Thank you again for the very useful evidence that you have provided for the committee this morning in our consideration of the audit report into NHS Grampian. I thank Alison Cumming, Leigh Johnston and the Auditor General for providing us with lots of food for thought.
I will now, as previously agreed, move the committee into private session. Thank you.
11:54 Meeting continued in private until 12:10.