Audit Committee,

Meeting date: Tuesday, May 31, 2005

Official Report 227KB pdf

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“The 2003/04 Audit of Argyll and Clyde Health Board”

Agenda item 3 is consideration of a response from the Scottish Executive to our first report of 2005, which is entitled "The 2003/04 Accounts of NHS Argyll and Clyde". Members have a copy of the response from Kevin Woods, who is the accountable officer for the Health Department, and a copy of last week's ministerial statement on certain aspects of Argyll and Clyde NHS Board. Members may make points and consider whether we need to respond to the Executive.

I would like more information on what will happen in the Health Department, as we were critical of its involvement in certain areas. Kevin Woods says that work will be undertaken by the department. Can we get a copy of that information when it becomes available? I hope that we will not have to wait too long for it.

I am reassured that, in respect of some of the principal conclusions, the Health Department accepts the criticisms that have been made and states what it will do to try to improve how it engages with boards and, specifically, how it deals with accountability reviews and financial recovery plans. The department acknowledges the validity of our criticisms and indicates that action will now be taken to improve the way in which the process works.

I hope that our future work will be helped if there is more transparency in how financial recovery plans are evaluated by the Health Department. I also hope that there will be more transparency in how boards demonstrate that they will recover from the financial positions in which they find themselves.

All in all, I thought that the Health Department agreed with a good lot of the criticism that was made and that it is now taking action. Of course, the proof of the pudding will be whether that is shown to have been followed through in the reports that we get from the Auditor General and whether we see in a year's time that action has been taken on the ground.

Like colleagues, I have studied with considerable interest both the Health Department's response to the committee and the minister's statement last week. I feel bound to make an overriding observation before I raise a couple of specific points about the department's response. It is important to state that I do not recall that we stated anywhere in the 140-page report that the root cause of the problem, or indeed, the solution for the board, was structural reform. The independent support team that the previous minister sent in to examine the situation some two and a bit years ago also did not suggest that that was the case. I have re-read the comments in the independent support team's report, which are replicated in our report.

I note that the response to our report majors on structural change to the board, yet our conclusions did not do so. Interesting questions can be raised about the impact that that might have on the key observations that we made about the need to take forward service changes and to develop a revised clinical strategy.

I will make a couple of specific points about the department's response. The key issue that was at the core of what we examined, which was the agreement of a financial plan, is referred to at the bottom of page 3 of the department's response. The Executive has failed to address the fundamental question of why it did not bring the issue to a conclusion earlier. I recall that in evidence to the committee it was accepted that that was the department's job. There are warm words in the Executive's response about improvements in relationships, but a critical question remains. The question I pose, to which I do not know the answer, is: how can such a situation go on for so long? Despite the 22 meetings that we have discussed so often, no agreement was reached. That key question about why matters were not brought to a head still has not been addressed for the future.

I am not sure where, if anywhere, we go from here. I felt that the billing of both the minister's statement in the chamber and the Executive's response as a response to the Audit Committee's report was a bit of a misnomer. They are perhaps parallel or possibly even complementary to our observations, but I am not sure that they are altogether a response to them.

Members will recall that I had the opportunity to ask the final question on the minister's statement, when I flagged up the possibility of the committee being given a briefing. The committee could consider that possibility today. I have discussed it and our work schedule with the clerks and I have considered what might be happening in the Health Department, and I think that a briefing given now or before the end of the term would probably not elicit a great deal of information because the work is in progress. If the committee is minded to take a briefing from Kevin Woods, that might be more usefully scheduled for October. We would then be able to pick up some of our questions about the Executive's response and see what progress has been made. I put that on the table as a suggestion because the minister seemed to be accommodating on that.

I am happy to link what you have just said to Susan Deacon's remarks, because I share the doubts that she expressed. It is unfinished business; the situation is on-going and the Executive's response has to be checked against the reality. However, I notice that there is agreement on eight of the points on which we reported; another two have been acknowledged; and a review is promised or will be undertaken on another five. I get the feeling that there is still unfinished business but at least we have had some indication that things are going in the right direction. That links in with what you suggested about checking against delivery. I am happy that the Executive is considering those points but we have to check action against delivery, which we can do using your suggested mechanism.

As a point of interest, if members recall our evidence sessions with the Health Department and the health board, the fundamental disagreement was over the validity of the statement that the financial recovery plan could be implemented within five years. On the one hand, the board said that it could not deliver the plan any more quickly than that because doing so would impact on service delivery. On the other hand, the Health Department alleged that the plan could be delivered much more quickly, although it was not able to provide any evidence to underpin that view. Guess whose financial recovery plan has now been agreed? It is the plan that was proposed by Neil Campbell and the board. There was certainly scepticism in the committee about the Health Department's ability to convince us that it was right and that the board was wrong, which seems to have been acknowledged in the Executive's response to our report.

At this stage, I invite the Auditor General or any member of his team to comment.

We have no comments.

Are there any further comments from members before we try to reach a conclusion?

I have a comment on the suggestion of a briefing. At some point, we should accept Kevin Woods's offer of a further briefing, but it would be inappropriate to focus such a briefing specifically on Argyll and Clyde NHS Board when we have raised much wider issues, such as the financial overview, that would better lend themselves to a briefing from the head of the Health Department. It would be helpful if we could ask for a written report on how the proposed structural solution has delivered improvements in the financial situation or in service delivery in the area. I do not know what the appropriate timescale for that would be—perhaps six months or a year from now.

On that point, I suggest that, given that we have not yet published our report on the financial overview and so have not had a response, the committee could agree to invite Kevin Woods to give us a briefing on Argyll and Clyde NHS Board in the autumn. By that time, we will probably have had a number of committee meetings at which the written response from the Executive to our financial overview report will have been discussed, so we could schedule any further briefing on that report for the same day. We could take that briefing once we know where we are on the issue. Does that meet with the committee's agreement?

Yes. We are talking about a fundamental principle. We make specific recommendations and it is crucial that those who are responsible for carrying them out answer to the committee on whether they have indeed been carried out. We are really talking about follow-through reports. It would be a mistake if officials could leave a committee meeting and not be questioned about a matter again. It is important that we see practical, real action on the recommendations or hear reasons why they cannot be implemented.

Just to clarify, I seek the committee's agreement to invite Kevin Woods to brief the committee on Argyll and Clyde NHS Board on a date to be determined after the recess. I also invite the committee to agree to consider at a future meeting whether to ask Mr Woods to brief us on our forthcoming report, "Overview of the Financial Performance of the NHS in Scotland 2003/04".

Members indicated agreement.

Before we move on, I take the opportunity to welcome Alastair MacNish and his team from the Accounts Commission, who will give evidence to us in relation to a later agenda item.