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Chamber and committees

Public Audit Committee, 25 Feb 2009

Meeting date: Wednesday, February 25, 2009


Contents


Section 23 Report


“Asset management in the NHS in Scotland”

Item 2 is consideration of a section 23 report. We will receive a briefing from the Auditor General on the report "Asset management in the NHS in Scotland".

Mr Robert Black (Auditor General for Scotland):

With your agreement, convener, I invite Barbara Hurst to introduce the report.

Barbara Hurst (Audit Scotland):

My challenge is to make asset management less than dull for Stuart McMillan's last meeting.

Our report on asset management in the national health service was published in late January. The NHS's main assets are land and buildings, information technology, medical equipment and vehicles. In 2007-08, the health service held assets worth almost £5 billion, of which the estate made up around four fifths. There is significant investment in those assets—£3 billion is planned between 2003 and 2011.

The report looks at three issues and is especially concerned with the importance of managing assets well. First, it focuses on the strategic role that the Scottish Government health directorates play. Secondly, it examines how the health service is planning and managing its assets. Thirdly, it looks in a bit more detail at the estate, because that accounts for four fifths of the value of the assets.

The health directorates are responsible for overall policies and guidance on the management of assets and for monitoring how those are implemented locally. There are a collection of policies and guidance on the estate, IT and medical equipment, but some of them need updating. There are no national policies or guidance on vehicle management. That is an issue, given the number of vehicles that are used in the health service.

National monitoring of the way in which bodies manage their assets is limited. There are some mandatory performance measures for the estate, and NHS bodies are required to produce estate strategies that are updated annually. However, there is no routine collection or monitoring of those performance measures and strategies.

The oversight of major capital projects—those above £5 million—is more rigorous, with detailed reviews of business cases for major capital investment. NHS bodies are required to undertake post-project reviews and post-occupancy evaluations to assess whether projects have achieved their objectives, but there is no checking of whether reviews have been done.

Part 2 of the report examines how the health service is working with other partners to develop the public sector estate as a whole. At the time of our review, only NHS Grampian had a joint estate strategy with its public sector partners, although 12 other bodies had strategies in development.

I move to part 3 of the report. Local asset strategies should link with clinical strategies to ensure that assets are in place and properly maintained to support the delivery of health care. However, we found that only five NHS boards have comprehensive asset strategies that are explicitly linked to their clinical strategies. Most of the other boards have strategies for their estates and IT, but fewer have them for medical equipment and vehicles. Most bodies also have basic information on their assets, but they are less likely to know the maintenance needs or conditions of the assets.

Given the value of the estate, we looked at estate management in more detail. Based on information from 11 boards, we found that the majority of the estate is of satisfactory quality, although just under a third will require major upgrading in the coming years. That is not surprising, given the age profile of the estate, which is shown in exhibit 12 on page 21 of the report. Exhibit 14 on page 23 provides a more detailed breakdown of the quality of the estate against four key criteria, including physical condition.

We found that the health estate has a maintenance backlog of in excess of £512 million. That figure is likely to be an underestimate, because it excludes NHS Greater Glasgow and Clyde and NHS Western Isles. Exhibit 17 on page 25 shows that the amount that NHS bodies spend on maintenance of the estate that they own—as opposed to private finance initiative-funded estate—varies, but we found no direct link between the amount that NHS bodies spend on maintenance and the size of their backlog. We also found little evidence that NHS bodies are budgeting to meet the long-term planned maintenance costs of the estate, otherwise known as whole-life costing.

Not all the estate meets disability discrimination legislation requirements. That is a particular challenge, given the age of some of the estate. We found that all NHS bodies consider equality and diversity issues when planning and implementing capital estates projects, but that does not always include consultation with people with disabilities.

As usual, we are happy to answer any questions that members have.

Thank you. In paragraph 11 of your key messages report, you highlight the fact that

"Five NHS bodies did not know the condition of their medical equipment."

Is that not rather worrying?

Barbara Hurst:

It is very worrying. Several years ago, we published a report on medical equipment and made a number of recommendations, a key one being that NHS bodies need to know where their equipment is, what condition it is in and what the maintenance programme is. The finding to which you refer is not good.

Despite what you said to health boards previously, five health boards still do not know the condition of their medical equipment.

Barbara Hurst:

That is correct.

We will want to reflect on that.

Murdo Fraser (Mid Scotland and Fife) (Con):

I will continue the convener's line of questioning. Exhibit 10 on page 19 shows whether information is held electronically, in paper records or not at all. The bar chart for vehicles suggests that one NHS body has no record at all of the number of vehicles that it holds. Is that correct?

Barbara Hurst:

Yes.

Kirsty Whyte (Audit Scotland):

The figures for each category do not always add up to the total number of boards, because not all boards responded to all questions.

Murdo Fraser:

But the left-hand side of the "Vehicles" table in exhibit 10 shows that 16 NHS bodies hold their records electronically, none has paper records and one has no records at all. It seems utterly extraordinary for an NHS board to have no records of the number of vehicles that it has, nor of their location—not to mention information on their condition, replacement plans or work that has been done on them. It seems extraordinary for a public body to run a vehicle fleet without having any records about it. I am not missing something, am I?

Kirsty Whyte:

The one body concerned is the national waiting times centre, which does not own an awful lot of vehicles. It might be that it did not answer the question.

Ah—okay.

Which were the five NHS bodies that did not know the condition of their medical equipment?

Kirsty Whyte:

They were NHS Fife, NHS Shetland, NHS Tayside, the state hospital and the Scottish Ambulance Service.

Andrew Welsh (Angus) (SNP):

The fact that NHS bodies did not know the condition of their medical equipment strikes at the heart of treatment. Surely tracking and monitoring are required to solve the problem, and nowadays those have to be done using IT facilities. Is there any indication that action is either likely or imminent on those issues? Do action plans exist, or are they being planned? In other words, what will be done about the situation?

Kirsty Whyte:

A national e-health strategy was published just last year, and I know that boards are working with the Government to develop the initiatives that were contained in it around information management and technology. That includes the monitoring of equipment, patient records and the use of different software.

So the issue is recognised and is being looked into.

Kirsty Whyte:

Yes.

Barbara Hurst:

We will be following up work that we have done on IM and T. We will consider the matter in the work that we do this year.

Willie Coffey (Kilmarnock and Loudoun) (SNP):

One of the very positive opening comments in the Audit Scotland summary recognises the tripling of the investment that is coming along. Given members' comments so far, I think that we have a golden opportunity to correct some practices and ensure better practice for the future.

One or two of the comments in your report stick out. First, there does not appear to be any correlation between the condition of the estate and the amount that is spent on it. A further comment was that the overall percentage of spend on maintenance is actually decreasing. Those are worrying trends, if they are allowed to continue. However, I am pretty confident from the report before us that, once it is shared with the NHS throughout Scotland, we will begin to correct some practices.

I see that one of my old favourite issues has appeared yet again; I refer to the recurring theme of post-project evaluation—or the lack of it—which can be used to learn and share good practice. That has been a recurring message at the Public Audit Committee. Why should that be? Is it something that the public sector is just not very good at? I suppose that the answer to that is yes. What can the Audit Scotland team say about ensuring that that theme is taken up far more seriously in the future?

Barbara Hurst:

We expected you to ask about post-project evaluation, partly because of our major capital projects report in which that came through as a theme. We do not know whether the health service is not routinely doing such evaluation, but we know that it is not monitored. We genuinely do not know whether the NHS is doing that or not. However, the issue is important, because it concerns health care facilities and we need to evaluate whether they are meeting needs. I think that Kirsty Whyte will support me on this: there is a lot of evidence that, if buildings are well designed, that can enhance the health care experience. We want to pick up on that with the Scottish Government health directorates to ensure that such evaluations are happening across the health service.

Willie Coffey:

That is very encouraging. I am similarly encouraged and delighted to see that you have picked up the north-west Kilmarnock area centre as a case study on page 13. Located in my own dearly beloved Kilmarnock, the centre is a fantastic resource for the community, which combines lots of health services with housing, community and police services all under the one roof. It is a fantastic example and I am certain that, should the committee wish to see examples of good practice, it would be made very welcome down in Kilmarnock. It is lovely to see that resource being recognised. Although I recognise the comments that were made about the lack of post-evaluation analysis, I am certain that the work that is being done in that centre is delivering positive results for the community.

Mr Black:

That is a good example of why we include case studies in the report. We would expect such a report to be read carefully and seriously by board members and senior officials. Other boards should be interested in a case study like the one that has just been mentioned and would want to explore whether there is anything that they can learn from it.

Stuart McMillan:

Paragraph 17 of the key messages report says that

"Almost a third of the estate will need major upgrading soon",

and recommendation 5 in that document talks about the new hub initiative. When more information comes to light and more proposals are signed off in the future, will you do any further analysis work to ensure that any developments that take place are of the highest order?

Barbara Hurst:

We will probably follow that up in about 18 months or a couple of years, to give the recommendations a chance to bed in. There are also some issues coming up through the annual audit process around capital investment, which we would be likely to highlight in our overview report on the health service.

Nick Hex (Audit Scotland):

We highlighted the fact that there is a lack of performance information. The development of the performance management system that the Government is committed to producing this year should help in that regard, as it will standardise the information that is available across all the boards and make it much easier to monitor.

Stuart McMillan:

With regard to case studies, last year the Justice Committee went to Peebles, where there is a hub centre for the Scottish Court Service, Lothian and Borders Police and the community justice partners. Other examples, in the health service and in other areas of the public sector, could provide useful examples of such arrangements.

George Foulkes (Lothians) (Lab):

When the NHS boards decide to dispose of property assets, it always seems to be a long time until that property is transferred to someone else and used for another purpose, during which time the property deteriorates and the value goes down. Did you look at the process for the disposal of assets, with regard to the time that it takes to do so and the resultant costs?

Nick Hex:

No. We examined the disposals process and discussed it with the Government, and we understand that the disposals programme forms part of the capital investment programme for each board, which is planned over a number of years. As our report says, not a lot of information is gathered annually. However, one of the elements that are gathered annually by the Government is each board's capital investment, which includes all the plans for disposals over not just the coming year but succeeding years.

George Foulkes:

I am surprised that you did not examine that issue. In my old role in South Ayrshire, I constantly heard complaints about the fact that, after the health board built a new hospital, Ayr hospital, Ballochmyle hospital and all the others that were surplus to requirements were empty for years, which led to huge extra costs. Surely Audit Scotland ought to examine that issue.

Nick Hex:

We examined things in a strategic way. We considered at a global level the functional suitability of the estate—whether the estate is suitable and how it is being used—but we did not examine individual disposals of assets.

George Foulkes:

Might you consider doing that? I am sure that a lot of money is wasted through property lying unused. I understand that there is a long, complicated procedure whereby the property must be made available to other public bodies before it can be disposed of on the private market. Is that correct?

Barbara Hurst:

Public bodies are supposed to get the best value that they can when they dispose of land or buildings. An issue that might be coming up now, given the financial climate, concerns the fact that assumptions that were made about the extent to which land disposal can contribute to capital might prove to have been overoptimistic.

George Foulkes:

That is a separate issue, really. My worry is that properties can become less valuable when they are left to deteriorate.

Page 27 of the report mentions various matters that must be considered. Rather low down the list—too low, in my view—you mention

"how energy efficient the estate is".

Having had a look at the new buildings, I do not think that anyone has paid any attention to that. There seems to be no indication of any work having been done to make them energy efficient. Have you detected anything that has been done to ensure that the buildings have as low a rate of energy consumption as possible and that they use all the new techniques for improving energy efficiency?

Barbara Hurst:

The report on energy efficiency that you will consider later on your agenda examined that, to an extent. The health service is better than some other parts of the public sector in the attention that it pays to that issue. I believe that it has a target for energy efficiency in health service buildings.

I am surprised by that. That is not my experience, but there we are.

Willie Coffey:

On acquisitions and procurement, is there any evidence that NHS boards are trying to partner up with regard to services or materials? I note that there is a national database for something or other—I am not quite sure what, though; perhaps it is just for vehicle tracking.

Barbara Hurst:

We are doing some work on procurement at the moment. I cannot remember exactly the publication date that we have planned, but I believe that we will bring a report on procurement in general across the public sector to the committee in the early summer. That will explain what is being done in the public sector to establish the sort of shared approaches that you are talking about.

Kirsty Whyte:

There are a couple of initiatives that are quite specific to what you mention. Public sector bodies should be entering their properties into the United Kingdom-wide electronic property information mapping service—e-PIMS—so that public bodies that are looking for buildings can see what is available in certain areas. That enables the most efficient use of the space. The service has not been well used in Scotland so far, but the Government is working on promoting its use.

The Government has begun piloting the new hub initiative as part of the Scottish Futures Trust. That should increase efficiencies around the procurement of buildings, as public bodies can come together to procure large-scale contracts.

Cathie Craigie (Cumbernauld and Kilsyth) (Lab):

On page 21, exhibit 13 demonstrates that acute hospitals and non-acute hospitals account for the majority of the NHS estate. On page 5, the report reminds us that there is a

"shift … from a hospital focused service to one that is community based".

Is there any indication that, in managing the estate, NHS boards are investing for the future to deliver on that community-based agenda?

Kirsty Whyte:

Yes, I think that there is a recognition of that among health boards, particularly given the scale of the capital investment that is being made. All boards have major investment programmes that are linked to shifting the balance of care from a heavy focus on acute services to community centres.

Andrew Welsh:

It seems that the focus of the Scottish Government health directorates is to look to future policy, but they do not seem to look at the existing situation. The report gives a warning signal about future problems unless the estate is dealt with. Should the focus of the SGHDs include not just existing policy but the existing estate, given that the estate is deteriorating and the health directorates do not seem to know exactly how bad the situation is? Is a switch in focus, or an additional focus, required?

Barbara Hurst:

The report certainly recommends that there needs to be better monitoring nationally so that we know what the current situation is. We do not suggest that the health directorates should manage the local assets, but they certainly need to know what the picture looks like across Scotland. Without a proper picture of the estate, they cannot know what the capital investment should be for the future. That is an important point.

They might be storing up future problems.

Barbara Hurst:

Yes.

If members have no further questions, I thank the Audit Scotland team for coming along—

What happens now?

We will decide what to do with the report under a later agenda item.

Will that item be taken in private?

Yes.