We move to agenda item 2 and continue our NHS boards budget scrutiny. Today we are taking evidence from a number of special NHS boards, and I welcome Simon Belfer, director of finance and business services at NHS National Services Scotland, Pamela McLauchlan, director of finance and logistics at the Scottish Ambulance Service, and Maggie Waterston, director of finance and corporate services at Healthcare Improvement Scotland.
I will ask about planned efficiency savings. I know that there is not a target this year, although 3 per cent is understood to be the continuing target. I notice that Healthcare Improvement Scotland says that it is planning efficiency savings of 5.6 per cent, that the Scottish Ambulance Service is planning 4 per cent savings, and that NHS National Services Scotland is planning 3 per cent savings. Can you give some examples?
Healthcare Improvement Scotland has created and resourced its local delivery plan—LDP—for this year. We had a voluntary redundancy scheme two years ago, and some of the savings from that are recurring and have come through in the past couple of years. That has helped us to re-engineer our workforce and reinvest in scrutiny—for example, we have put an extra £0.5 million into scrutiny in the past two years to enable that work to be done. That particular cash-releasing efficiency saving has allowed us to focus more on delivery.
That is a historical gain from redundancies that you have previously achieved—
That we have previously made.
And it is now coming through as a saving in your workforce and employee budget.
Yes. We also need to look at the make-up of our budget. A considerable proportion of our budget is in separate allocations from the Scottish Government. We are working with the Government to see what we can transfer into our baseline, because some of that money pays for staffing as well.
So there are savings from the non-recurring becoming recurring.
Yes.
Right. Someone else may want to ask about that.
I will pick up on efficiency savings from our perspective. Dr Simpson is correct that we have to produce 4.1 per cent efficiency savings. In 2014-15, 3 per cent of that will be cash and 1.1 per cent productivity gains. The ambulance service has historically achieved in excess of 3 per cent cash-releasing efficiency savings in the past three years, which have totalled somewhere in the region of £20.1 million.
Our position is very similar to that of the ambulance service. The majority of our efficiency savings come from service productivity gains. We are creating, launching and delivering new services and driving efficiencies from existing services. The minority of our efficiency gains come from workforce savings. All our savings are recurring.
I have a supplementary specifically for the ambulance service. Issues such as double manning, the ratio of paramedics to technicians and passenger transport have been raised in the Parliament. What is happening in those three areas? Are you improving the double-manning situation and ensuring that ambulances are always double-manned when it is relevant? Are you ensuring that the ratio of paramedics to non-paramedics is improving?
Your question is specifically about the paramedic-technician ratio and single crewing. On the emergency side of the organisation, which we classify as unscheduled care, we have progressed well and do not have planned single crewing. Unfortunately, resources sometimes have to be single crewed at very short notice, but that happens in less than 1 per cent of cases. Our paramedic response units are deliberately single crewed, as those are the services that we target at patients who can safely and effectively remain at home and who require diagnostics and treatment in their home environment.
That is helpful. I have one final question in this section. We get annual reports of the efficiency savings that have been achieved and the targets for the next year. However, Maggie Waterston says that quite a lot of the savings are made over a number of years. You plan changes in the service, redundancies or retirements allow you to implement those service redesigns and, as a consequence, you make savings subsequently. Should we not be looking at such things in the longer term? That feeds into what Simon Belfer said, as well. As the savings are achieved year on year, there will be a finite achievement in areas such as estates. It would be helpful for forward budgeting if we had the opportunity to look at such things over a three-year period rather than a one-year period. Do the witnesses have any comments to make on that?
We are all required to submit at least a three-year plan every year as part of our LDP, including our service plan, our workforce plan and our financial plan, so the information is there. A number of boards—mine included—look ahead five years anyway. We ask where we want to be in five years’ time and track back to the present the actions and activity that we need to undertake, which leads us down a slightly different route than we would take if we evolved from where we are. Government officials have detailed savings information from every board for at least three years, and that information should be available.
Likewise, the Scottish Ambulance Service has a five-year plan for our scheduled care service, which is a key workstream that will progress. We are currently in year 3 of that. As Simon Belfer says, we are also required to submit three-year financial plans, which means that some of the efficiency savings that we have identified in 2014-15 will continue in 2015-16 and 2016-17 although others will be completing.
HIS is just three years old and it has legacy organisations, so we have had a bit of sorting out to do to change our model to deliver our purpose. At this stage, we have a relatively stable strategic environment. We have the 2020 vision, which is the quality strategy that is taking us to 2020. We have just redone our own strategy that takes us to 2020 and aligns itself very closely with the 2020 vision.
That last bit is very welcome; thank you very much indeed.
I would like some detail as to what “efficiencies” actually means. I know that HIS is to achieve 70 per cent of its saving through efficiencies via the workforce. Does that mean that your existing workforce needs to go and be replaced with the workforce that you will need in the future? Is that the transition that you are talking about?
You have touched on quite a few things that are still being finalised. A lot of our savings will come through vacancy management. We have quite a big churn in our workforce during the course of the year. That is largely because of our funding model. We have a baseline budget, but we also get separate allocations from Government for things like the patient safety programme, so we have been able to recruit people only on a fixed-term basis.
It is not encouraging to hear that you have had that churn. To be fair, we know that Healthcare Improvement Scotland is a young organisation and that it is being asked to do increasing amounts of work with regard to children, prisons and so on, but it is something of a concern.
Yes. Our efficiency savings will be made on our baseline funding. The funding that we then receive for, say, the patient safety programme will not be subject to efficiencies. The money that we receive from the Government will be spent—
As has been specified.
Indeed. We have resourced ourselves up to the local delivery plan that has been agreed, but, during the year, we might get ad hoc requests from the Government or we might decide to concentrate on certain pieces of work and we would look to the service to help us resource that. It is really important that whatever we do happens in collaboration with the service. Indeed, in the past, we have been assisted by experts in the territorial health boards. The philosophical point is that if we are a central body we have to be as lean and as leanly resourced as it is responsible to be to ensure that we deliver real value and free up funding for patients.
My final question goes back to a point that was highlighted earlier. Do you need a bit more flexibility? I believe that you said that you were discussing with the Government the possibility of using some of the fixed funds to deal with core issues. After all, you might well have earmarked funds that you might not be spending at the moment but which, if you had the flexibility, you could use elsewhere in the organisation.
We would still intend to use that money for the purpose for which we received it. We are discussing with the Scottish Government the possibility of that funding being earmarked in our baseline, which could give us more flexibility.
I will come to Simon Belfer in a moment, but I want to pursue this wee question, because I think that the issue applies to you all.
We can make those plans because we understand our purpose and because we largely set our own direction. Healthcare Improvement Scotland gets some ministerial direction and has to meet certain legislative responsibilities, but we can plan them in. It comes back to my point about having a relatively stable strategic environment until the 2020s.
Getting good value is important, but given that we are dealing with health services, quality is also important.
Absolutely.
But what happens if we have people coming and going all the time?
Our 2020 vision is in line with the Scottish Government’s 2020 vision of delivering more care locally to people in their own homes, and from that, we are planning what our workforce will look like by 2020. We expect that it might look significantly different from how it looks at the moment. We simply have to go with that, make certain assumptions and carry out different types of scenario planning; indeed, that is what we are doing at the moment.
I am sure that we will come on to risk and accountability, because if people are working in an uncertain environment, who can be held to account?
Workforce planning is an interesting issue, but I would like to return to earmarked funding. The strict definition of efficiency savings applies to the baseline. However, earmarked funding may continue at a flat rate for several years, although the costs of delivering the relevant services might not remain flat, so to live within the means of the earmarked funds, one often has to make efficiencies. That is just the way of the world.
The convener has been pursuing an important line of questioning.
Yes, it was 9 per cent last year.
It would be quite helpful to know what the turnover is among your core staff. If you do not have that information to hand, perhaps you could send it to the committee. The 9 per cent figure could be a bit misleading, because you might employ 50 people on a two-year contract for a specific piece of work. Turnover of those staff is a bit different from core staff turnover. Can you give us an idea of how you account for those two different things?
I will come back to you on that, as I do not have that information to hand.
Right. I would be concerned—
Could you describe the difference between your core and your contracted staff? Are the contractors inspectors?
No. The scrutiny and inspection work is done predominantly by core staff.
It would be extremely helpful if all three witnesses could supply us with that information.
It will be a lot lower than that for us. One of the key things with regard to the demographic of our workforce is that approximately 10 per cent of our workforce is 55 or over, which means that a lot of extremely experienced people are heading for retirement. We are considering ways of keeping that experience in the organisation. Those people might be willing to reduce their hours, which would certainly save us some money and would keep that experience in the organisation. There is some engineering to be done around the demographic of the workforce.
With regard to its core staff, the Ambulance Service is not in the same position as Healthcare Improvement Scotland. Our turnover was 5.3 per cent last year. With regard to the demographics, 25 per cent of our workforce is aged over 50, which means that, over the next few years, we will experience a significant amount of turnover.
I was going to ask whether you are planning for ways to deal with that ageing workforce, but you clearly are.
Yes.
That is reassuring. Does Mr Belfer want to add anything?
I do not have any information to hand, but I will try to get something to you.
Is there an overlap in the different terminologies that we are using? Could earmarked—I almost said ring-fenced, but that is not right—funding also be non-recurring funding? Is there an overlap? Can they be the same pound?
They could be different. We sometimes get earmarked funding for specific workstreams. That might not be just for one year, non-recurrent, but it could be for two or three years.
I am just trying to find out whether there is an overlap. I assume that you can be told, “This is earmarked funding for a two-year programme. You must use the funding for that, so it is non-recurring after two years.” I take it that, in general terms, there will be overlap. I do not want to dwell on the point; I just want to be clear. Is there an overlap between those two things?
When we are dealing with the health finance department, we are clear that there are three categories of funding: baseline funding; earmarked funding; and additional allocations.
No, it is all right—I was just scratching my head.
Those points are really important. This is perhaps my lack of understanding, rather than a lack of clarity—I apologise for that. I think that I am right in understanding that Ms Waterston was talking about earmarked funding that could be recurring for a number of years—but not ad infinitum, obviously—and about how it is better, rather than having staff on fixed-term contracts, to make them permanent members of staff. The discussions that you have with Government are about when earmarked funding should come under the core and baseline funding. The question is how much you transfer over to baseline funding on an annual basis.
We are transferring the money over, but on a recurring basis. That would follow the model that Simon Belfer just described.
Let me paint a picture of the situation. There are 40 different individual pieces of funding, earmarked and recurring for a length of time—that is fine; we get all that. However, if some of them have been kicking about for quite a long time, it could make sense to track them, bundle them together and transfer them into the core baseline budget, and that is the discussion that you are having with Government. That transfer gives greater stability for staff members and gives them a career pathway, and there is an efficiency saving.
That is exactly it. In that situation, because we would have permanent staff, we would be able to engineer exactly the type of staff that we want and the flexibility that we want. We would have to seek efficiencies within all that, to do with our processes and the different areas of our organisation working much more closely together so that we are not all sitting in separate departments. There are lots of ways to do that. We would have to lean our processes going forward, and I am not saying that such an approach would be easy or that it is a simple solution to things. It is difficult—but it is difficult for a lot of people to manage budgets.
This question is almost a procedural one. When do you think that it would be relevant for the committee—whoever sits on it in future—to ask for an update on the work that you said was on-going and on how many of the various different pots of cash for earmarked funding are now in baseline funding, to ask what that means for staff terms and to ask how many individual members of staff have become part of the core staff team and had that career pathway and that stability? Should that be this time next year, in two years’ time or in three years’ time?
I am confident that negotiations with the Scottish Government are going well. It has the same will that we have to make Healthcare Improvement Scotland’s baseline more realistic. I expect that we would be budgeting on a bigger baseline for next year, because we would have resolved those separate allocations by then.
The health service works in annual cycles. Each year, you can see absolute data and see how much is in each pot. It is rather like a bath with a tap and a plug: as we sort out the stuff that we know about today, new ideas, activities and issues start coming in as new projects. The question is: when is something a project, and when is it business as usual? The important thing is the transfer process. On an annual basis, you would absolutely get the data.
I take it, Ms McLauchlan, that the Scottish Ambulance Service is in a bit of a different situation.
Yes. Our earmarked funding comes to about £9.6 million. As I have indicated, £6.6 million of that is for specialist retrieval, which is a service that we will continue to provide for the foreseeable future. As the amount is relatively small with regard to our overall funding, we are not in the same position as Healthcare Improvement Scotland.
Just to put this into context, I note that, five years ago, our earmarked funding came to more than £100 million; last year, it was £57 million and this year £33 million. We have made real inroads into that issue.
Thank you for your patience in taking me through all of that. I have found it very helpful.
I want to take you back to non-recurring funding. The Scottish Ambulance Service has provided some easy-to-follow examples of that funding, and I wonder whether the other boards can provide similar examples.
Yes. We have non-recurring funding to deal with, for example, adverse events. Last year, we undertook a big piece of work on adverse events in all the health boards, and we have created a framework that we are now implementing across the health service to ensure that people can learn from others who have dealt with such events. That work cost about £300,000.
I can highlight three quite different examples, the first of which is funding for abdominal aortic aneurysm screening. Such screening is new and, while it is in project phase, it is not included in our baseline but is counted as separate funding. I hope that, over time, it will transfer into our core business in the same way as some of Maggie Waterston’s programmes have done for her.
It seems to me that an awful lot of those things will be included in your baseline funding in the future. How does non-recurring funding impact on your ability to plan or, indeed, recruit staff? Are you confident that you are carrying out those pieces of work as efficiently as possible and getting the right people for the jobs? After all, you can offer only short-term contracts at the moment. Would it not have been better for this funding to have been included in your budget from day 1?
We as an organisation have to decide how much risk we are willing to take. If someone is simply not interested in working for our organisation on a fixed-term contract but the service still needs to be provided, we end up having to take the risk of employing someone permanently and seeing what happens at the end. Depending on other conversations that we might have with Government or other health boards and public sector bodies, that individual or team might have other things to do when the time comes; of course, that will depend on how transferable their skills are.
Speaking from a Scottish Ambulance Service perspective, I should say that if we know that the funding is non-recurring and is only for a defined period of time, we tend to target it at education, training and research. However, some members of staff might get involved in projects. For example, as part of the local unscheduled care project, we are piloting community paramedics in three areas of Scotland, and we are seconding staff from their current roles to work there.
My organisation has had to take the risk of employing people permanently to ensure the continuity of the patient safety programme.
On a slightly different subject, could I ask Pamela McLauchlan about the scheduled care efficiency savings that the Scottish Ambulance Service intends to make?
As I indicated, we have a five-year project that is looking at our scheduled care, which is planned transportation of people who require medical attention en route to hospital. Such care is predominantly provided for out-patient appointments and is sometimes provided for oncology or renal dialysis. We are also increasingly using the resource for planned discharges, to assist the territorial boards in optimising their bed capacity. That may involve a transfer from a hospital setting to perhaps step-down care, nursing home care or a patient’s own home.
That concerns me, because one of the biggest bugbears of my constituents in the Highlands and Islands is the lack of provision for patient transport services, which is what I think we are talking about. Disabled people are sometimes not told until the day before their appointment whether they will be transported to hospital—in most cases they will not be—which means that they cannot attend and, given the timescale, their appointment cannot be filled. That creates huge inefficiencies in clinics and hospitals, because they have a no-show. It can also cause a great deal of distress to patients, who are sometimes elderly and cannot make their own way to the hospital. Is any work being done to see how we can provide a reasonable service? I get complaints about missed appointments from both patients and clinicians throughout my area.
Absolutely. That is why we are looking, through our planning and our day control, to ensure that the situations that you describe do not happen. We are also looking at our phone lines, because a lot of the demand that we get on our phone lines is from people checking whether their transportation is booked. We are carrying out work in that area to ensure that the reassurance that they seek is provided.
Given that a large number of places have no public transport and people have a medical requirement to attend hospital, surely we are building a two-tier system if there is no way that they can do so other than via the patient transport service.
That is absolutely why we are working with the voluntary sector, which provides a valuable service, predominantly in those areas, to ensure that people have door-to-door transportation. We are doing what we can to signpost people in those areas. The Scottish Ambulance Service has responsibility for people who require medical assistance en route to or going from hospital.
I am aware that the voluntary sector also helps out with disabled-adapted minibuses, for example, but it is given very little notice of when it is required, as are most of the volunteer drivers. Will there be better planning? What will happen where there is no voluntary capacity? Whose responsibility is it to ensure that people can access healthcare? That is what it is about.
I am sure that you are aware that it is the health boards’ responsibility to ensure that people have access to healthcare. The Scottish Ambulance Service has a role to play for those with medical requirements—if somebody requires oxygen, for example.
I had a number of questions about efficiencies, but most of them have been asked.
Do you want to discuss the new medicines review specifically or things in general?
You could tell us what you intend to do for each of the services.
The new medicines review is about increasing the transparency of the decision process and meeting in public. It started at the beginning of May. The whole system for end-of-life and orphan drugs is changing, and those decisions will have an impact by the autumn.
So there is quite a lot of work to do and you will be promoting quite a lot of good news during the next year.
We are also looking at the quality strategy and how we can help health boards improve their quality infrastructure. That is on the stocks as well.
Services such as those for cochlear implants and cardiac conditions exist now and will develop and grow. The exciting stuff and the good news come in some of the new things. The pancreatic islet cell work that we are doing will benefit patients with certain types of diabetes. It could be absolutely life changing; Scotland is leading the world in that area, and that work will start to take off.
So all the efficiencies that you have made and which we have just discussed have helped you to look at, transform, innovate, and promote other things that the committee will be interested in and which patients are quite rightly saying they want.
Yes.
Has Pamela McLauchlan anything to say about this with regard to the Scottish Ambulance Service?
I was just going to lead on from Simon Belfer’s comments about data. Having access to a patient’s records and medical information is vital to the Scottish Ambulance Service, and the key information summary and emergency care summary that Simon Belfer mentioned are two ways in which our staff who are working in the community can access information that will enable them to look after their patient and which will, we hope, enable the patient to remain in their home or in a homely setting. That is why we are developing the community paramedics in three pilot sites in Scotland.
Where are those pilot sites?
In the Borders, Lanarkshire and Shetland.
I compliment Maggie Waterston and Simon Belfer on the work that they do, but I should tell Pamela McLauchlan that I have had personal involvement with the Scottish Ambulance Service and want to compliment her on the excellent service that it provides. Very often you get criticised, but I think that the three of you have highlighted very groundbreaking and innovative projects that will contribute to what I suggest is one of the world’s best health services.
I call Colin Keir.
In the interests of time, convener, I will pass.
As there are no more questions, I thank all the witnesses for giving up their valuable time to attend the meeting and give us their evidence.
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