Argyll and Clyde NHS Board
Good morning. The first item of business is a statement by Andy Kerr on the follow-up to the Audit Committee's report on Argyll and Clyde NHS Board. The minister will take questions at the end of his statement and there should be no interventions.
I have asked for parliamentary time today to make a statement about the Executive's proposals for the future of Argyll and Clyde NHS Board. This follows the Scottish Executive Health Department's response to the Audit Committee's report at the beginning of the week.
Members will recall the background to the Audit Committee's report. Three or four years ago, there was considerable concern about the performance of the health board, the size of the financial deficit that was emerging and the ability of the management team to tackle the issues effectively. My predecessor, Malcolm Chisholm, took action at the time. A support team was brought into the health board and provided a report to the minister. Subsequently, the chief executives of the board and the three national health service trusts in the area left and a new board chief executive was appointed. The trusts were wound up and NHS services in Argyll and Clyde were planned and delivered on a single-system basis.
Since then, good progress has been made on a range of financial and other performance issues. We want to record our appreciation of that. There have been significant improvements in important areas such as waiting times and delayed discharges. Key services have been sustained and augmented for the benefit of local people. The fact that local staff and management have managed to achieve so much in the face of well-documented financial pressures is a tribute to their professionalism and dedication. We thank them for that.
However, the issue of financial balance has proved to be long running and deep-seated. The report by the Auditor General for Scotland, which was published in September last year, predicted that the cumulative deficit might rise to as high as £80 million to £100 million. Although I acknowledge the progress that has been made, I do not think that the Executive can justify allowing a publicly funded body to spend so much more than its income. That would be unacceptable. We have concluded that a fresh start is required and that the building of renewed confidence is necessary. I am therefore announcing that the Executive intends to consult on the dissolution of Argyll and Clyde NHS Board.
It is proposed that NHS Greater Glasgow and NHS Highland assume responsibility for the relevant areas in Argyll and Clyde. In addition, it is my intention to clear the accumulated financial deficit. I make it clear that the changes are being proposed in order to secure high-quality, safe and sustainable services for local people. That remains our absolute priority. However, I am conscious that my proposal may cause concern and anxiety in the local community. People will be worried about how it may affect services, and local staff will be worried about their jobs. Let me explain the reasoning behind the proposal and what the next steps will be.
I mentioned the Audit Committee's report on NHS Argyll and Clyde's finances, which we have studied carefully. One of its conclusions was that there had been a failure between the Health Department and NHS Argyll and Clyde to agree the board's financial recovery plan. I agree that that was unacceptable and acknowledge and accept the department's share of responsibility in the matter. The chamber can be assured that lessons have been learned and that procedures will be revised. I am happy to confirm that the existing board has approved a financial recovery plan that the Health Department has since agreed.
However, we must address the board's financial position. Over the past two years, good progress has been made on achieving planned savings against the board's plans. The board made total savings of £13.2 million in 2003-04 and £18.2 million in 2004-05. However, the issue of financial balance has proved to be long running and deep-seated. It is only proper that the Executive expects all NHS boards to sustain a sound financial footing and to meet their statutory financial duties. That is essential in preserving the delivery of high-quality, safe and sustainable local services. Plainly, it is unacceptable for a public body to allow the accumulation of debt that was taken on by NHS Argyll and Clyde. The situation cannot be allowed to continue.
It has also become increasingly clear that the geography of the NHS Argyll and Clyde area precludes effective management by a single health board. It is simply not a natural geographical area for one board. That is why we have discounted the option of retaining NHS Argyll and Clyde, while writing off the accumulated debt. Although a financial plan has been agreed, it is apparent that true recovery cannot take place unless structural issues are properly addressed. I am afraid that, despite the efforts of the current management team, NHS Argyll and Clyde has become associated with failure. I have no doubt that it has become necessary to dissolve the board and to move on, free from the millstone of the recent past. We have therefore agreed to provide £80 million in funding to clear the deficit and to enable the management teams to tackle their new responsibilities, free from the shortcomings of the past.
I assure the chamber that the provision of funding to clear Argyll and Clyde's deficit will not have an adverse effect on health funding in Scotland generally. Of the £80 million that we have decided to make available, £53 million will come from central Executive resources. The remaining £27 million will come from unallocated Health Department underspend that has been carried forward from the previous financial year. No planned health initiatives have been cut back to make the proposal happen.
Rightly, the condition that is attached to this action by my Cabinet colleagues is that financial balance in the Argyll and Clyde area needs to be restored as quickly as possible. As I have reported, NHS Argyll and Clyde has reached agreement on the details of the board's financial recovery plan. I will now look to all three boards to ensure that the plan is implemented on time. They have assured me that, when implementing the plan, they will maximise non-clinical savings.
We recognise that the coming months will be difficult for Argyll and Clyde, but momentum on implementing the recovery plan must not be lost. Spending reductions on the scale that is required in Argyll and Clyde cannot be made without service change, but that should be seen in a positive light. There will have to be change and we should not be afraid of it.
Next week, Professor David Kerr will report on his national review of service change. The review will provide boards with an opportunity to take a truly radical, modernising approach to service provision. However, our approach must be to continue to ask what we can deliver safely and sustainably in our local communities. In this case, there is an opportunity to redesign fundamentally the way in which the workforce is organised and services are delivered in Argyll and Clyde, in order to achieve tangible benefits for patients. There is an opportunity for services in communities in the Argyll and Clyde NHS Board area to become an example to the rest of Scotland of the way in which health care should be delivered in the 21st century, for the benefit of patients.
There is no doubt that tough decisions will be needed. I am sure that the reconfigured boards will need support to take and implement those decisions. Members should be assured that, when the case is made, the Executive will not shirk any action that will ensure high-quality, safe and sustainable services for local people.
I make it clear that the proposal to redraw the boundaries is intended to speed up the rate of modernisation in the areas concerned and not to reopen the debate on decisions that have already been taken. That would merely set back the implementation of important improvements in Argyll and Clyde, Glasgow and the Highlands. The proposal is also not intended to signal further structural change. In our view, that would be an unnecessary distraction at this time.
We want effective regional planning to be the norm throughout Scotland. Local people throughout Argyll and Clyde can be assured that patient services will be maintained, necessary health care provision will continue and the services on which they rely will be there for them. We acknowledge that removing the boundaries between Argyll and Clyde and Glasgow may heighten concerns over the future of the Royal Alexandra hospital in Paisley, given its proximity to the Southern general hospital. Such concerns would be misplaced. The RAH is a valuable resource that contributes significantly to the delivery of first-rate services to local communities. We expect that to continue.
After I have made this statement, I intend to spend the rest of the day in Argyll and Clyde meeting local staff. I recognise that local people and staff will be anxious about the statement. I will tell them that services will go on, people will continue to be cared for and staff will continue to be needed to provide services and care. I know that the three health boards concerned will work together closely to provide certainty to all staff about their future roles and responsibilities as quickly as possible. I expect the boards to take that work forward through the partnership arrangements that are already in place in NHS Scotland. That will ensure that trade unions and professional organisations that support staff are actively engaged.
We acknowledge that there will also be questions over where the redrawn board boundaries should lie. Local communities can be assured that our proposals will be detailed in a forthcoming consultation paper, which will be subject to three months of formal public consultation, commencing in late June. We are determined that it will be a genuine consultation that will take place with the full co-operation of the three health boards. We are keen to hear the views of all communities, staff, unions, local campaign groups and elected representatives. I assure members that we will consider carefully all representations and available information before coming to a final decision. Fundamentally, the situation is about people and services, not bureaucracy, boundaries or borders.
What we have announced today is about securing the future. It is a fresh start with a clean slate. It is about making real and effective change to support first-class health care facilities in our communities.
I am sure that members will appreciate that a considerable number of people wish to ask a question, and it should be exactly that—a question. I would be grateful if members would stick to a question without preamble.
I thank the minister for the advance copy of the statement. The decision that has been taken is probably the only one that could have been made given the sorry saga in Argyll and Clyde, which has culminated in the projected deficit of £100 million and the recent damning report by the Audit Committee.
Why, after 22 meetings between the board and the Health Department, was there a failure to agree a financial plan until only this week? What improvements will the minister make in his department's ability to monitor the finances of health boards adequately in the future? Given his comment that
"Spending reductions … cannot be made without service change",
what guarantees can he give the public in Argyll and Clyde that they will not suffer further losses of services because of the incompetence of either local managers or his department? Will he assure Parliament that the current senior managers will not be given the same grotesque pay-offs as the previous senior managers received, as that would surely add insult to injury to the people of Argyll and Clyde?
I consider the latter part of that question to be unacceptable as it discusses in the chamber the conditions of service of individual members of the public and trade unions. Shona Robison is reprehensible in her approach and shows a clear lack of understanding of some of the good progress that Argyll and Clyde NHS Board has made, which I tried to explain in my statement. Nonetheless, we reach back to the core of the decision about sustainable services, a sustainable board and a geography that does not meet the needs of the community in the delivery of the service.
I am more than happy to address some of the more rational points of Shona Robison's question. As regards the Health Department, I have said that there will be a complete review of internal procedures relating to the submission, review and agreement of financial plans. That report will be submitted to me by July.
The reason why so many meetings happened, so much consultation took place and so many phone calls were made is that the Health Department was not willing to sign off a plan that was not sustainable. It was a difficult process. Although I accept that we can improve our ways of working, we were not sitting at the end of a phone line not agreeing to anything; we were positively engaging with the board, trying to reassure ourselves that all the resources that were required to do the job were included in the recovery plan and that all the financial aspects of the plan were detailed appropriately for us so that we could sign it off. We could not sign off a recovery plan until we felt that it had some veracity and deliverability. There are still some substantial risks in that regard, but nonetheless we and the new boards can now work with the plan.
It is always our desire to maintain services as locally as possible, but with necessary specialisation, and that will continue to be the case and the driver of our health service in Scotland.
I welcome the minister's statement, as it tackled head on the issues that have plagued Argyll and Clyde for so long: geography and the board's debt. Will he reassure the chamber that the consultation will not take 12 months, as some people have reported, because such a delay would not be helpful?
When he visits Inverclyde royal hospital today, will the minister take time to thank those front-line staff who have delivered an improved service under difficult circumstances? Will he also make it clear to the staff and the wider community that Inverclyde royal hospital has a secure and sustainable future?
The purpose of my visit to Argyll and Clyde today is to do what Mr McNeil suggests. I want to build confidence in the future of services in that area. I want to say that people who were sick yesterday or who will be sick tomorrow or in the future will be cared for by professional staff in a professional way, and I want to reassure staff about their role.
When I visited Argyll and Clyde in the past, I realised that it must be difficult for staff to have every statement that they read about the health board prefaced by the terms "debt ridden" or "financial crisis", with all the negative connotations that such terms have. Wiping the slate clean and ensuring that the debt is removed will give staff an opportunity to build their services for the future. It will give them confidence in the way in which we deliver health services in Scotland and confidence that continued investment will take place. Although I accept fully that meetings with staff will be difficult, it is appropriate that I, as minister, should meet them, listen to their views and hear their concerns.
The formal consultation process will last three months, as set out in the NHS (Scotland) Act 1978, if I remember correctly. We intend to consult, analyse and respond to the consultation as quickly as possible. We propose to start the process at the end of June.
I have been to Inverclyde royal hospital and have discussed these matters. I see clearly a future for Inverclyde royal and I reassure Duncan McNeil that we will sort out all the issues to do with boundaries and boards. However, I foresee that Inverclyde royal will continue to play a significant role in the delivery of services.
I realise that today is not the minister's happiest day in the chamber and it is certainly a pretty desperate day for the patients and staff of Argyll and Clyde NHS Board. I ask the minister about the immediate issues of confidence on the part of patients and staff in that area because it seems to me, from listening to his statement, that sticking one bit of that area on to NHS Greater Glasgow and the other on to NHS Highland is a meaningless solution that is fraught with problems. Would it not be better for the Executive to assume immediate responsibility for the interim administration of the NHS Argyll and Clyde area pending the consultation and—perhaps even more pertinently—the publication of Professor David Kerr's report, which I understood was commissioned to instruct and inform a debate on the future of the whole health service in Scotland?
Professor David Kerr will inform the debate on our health care systems in Scotland, but his report is not about structures; it is about how to deliver the best level of care. That report will be discussed next week in the chamber.
We are not sticking bits anywhere. We will have rational discussions and take rational decisions. We will engage with communities and listen to professionals and everyone else in the area to ensure that we do not stick bits where they should not be. We will ensure that the boundaries fit modern health care services and that patient flows are recognised in any restructuring. In all that I have heard about Argyll and Clyde in recent times, people have mentioned to me the geography of the area, the inconsistencies and different styles of delivery, and the pressures and strains that that geography brings. Add to that significant debt, which has increased over recent years, and we have a problem.
I welcome the member's earlier comments because this is not a happy day. The decision that I have taken has been very difficult for me and my team and this is not where we wanted to be. However, I rest on the decision because it is the right one. It should reintroduce confidence and rebuild services and faith in the community. It will also ensure that neither I nor another health minister face the same difficulties in that area in five years' time. I want to ensure that the results of the decision are carried out properly to sustain services and confidence. We will do that not by sticking bits together but through genuine consultation with clinicians, patients and staff in the community.
Given the considerable pain that is involved in making decisions on Greater Glasgow NHS Board's acute services strategy and the critical stage that we are at in modernising its services, will the minister assure me that today's decision will not be detrimental to patients in greater Glasgow and that there will be no additional management burdens on that board and no additional financial burdens in the short or long term? Will he further assure me that there will be an adequate lead-in time should the consultation lead to a change in the boundary?
I think that I can give those assurances. I have had confidential discussions on this matter with senior managers and board chairs in all areas. I tried to make clear in my statement that I do not see this move as unpacking any past decisions; I believe that these changes, modernisations, reforms and reconfigurations must continue for the benefit of patients and in order to improve our service delivery to them.
As far as any burdens are concerned, I have sought to reassure members that I consider it to be unacceptable simply to reconfigure board boundaries and then have other boards inherit the debt. That is why we have agreed to write off the debt burden. Similarly, with regard to management capacity, I am sure that all boards are capable of carrying out this difficult task on our behalf.
I, too, welcome the minister's statement and seek clarification on a number of points. First, will he confirm that, if the Argyll and Bute area is taken into NHS Highland, patients will not have to travel to Inverness for treatment? There must be recognition of the traditional paths that patients follow for treatment.
Secondly, will the minister confirm that the modernisation of mental health services that NHS Argyll and Clyde agreed earlier this year will go ahead and that some of the £80 million that he has announced today will be used to fund the development of community mental health services ahead of any closure of institutions such as Argyll and Bute hospital?
Thirdly, does the minister agree that the root cause of the financial difficulties that the board faced was the consistent use of non-recurring funding over a period of years before the new management came in? That funding was used to cover up the board's deep financial problems. Will he assure us that in future the accounts of boards throughout Scotland will be more transparent in their reporting of the use of non-recurring funding?
Before you answer that, minister, I remind members that I asked them at the beginning to be brief and to ask perhaps one question. Mr Lyon, you have held up other members who have been sitting here and who are now not going to be called.
I will do my best to run through those questions and give an adequate response to them.
As far as the boundaries of Argyll and Bute are concerned, it could be said that I am in favour of having as much coterminosity as possible. However, although I genuinely have an open mind about the need for coterminosity with regard to the borders of Argyll and Bute Council, I also take account of the health service statistics on patient flows. I have not closed my mind on this matter and want to hear views from local people and, indeed, from the member before we go out to formal consultation. Mr Lyon should not assume that the Argyll and Bute Council area will be the section of the NHS Argyll and Clyde area that will go to NHS Highland.
The mental health strategy will be rolled out effectively. That said, I cannot make the commitment that Mr Lyon seeks with regard to the £80 million, because that money is required to write off the debt. It is the board's responsibility to ensure that it makes the resources available to deliver the mental health strategy before any facilities are closed.
Finally, we now pay greater attention to the issue of non-recurring funding and it has become more visible on board accounts.
The minister said that local people can be assured that patient services will be maintained. Will he assure local people that existing acute hospital services at the Vale of Leven hospital, Inverclyde royal hospital and the RAH will be maintained? Moreover, given that centralisation or reconfiguration of acute services within an expanded NHS Greater Glasgow would currently be decided at board level, will he take additional powers to ensure that his guarantee today will stand the test of time?
Going into detail on any of those questions would pre-empt the work of the current board and its successors. However, I strongly believe that the Vale of Leven hospital, Inverclyde royal hospital and the RAH have a future in the health service. Indeed, my earlier comments on Inverclyde royal hospital and the RAH make that clear, and I share that view with regard to the Vale of Leven hospital. Services will change; after all, the issue of health and the way in which we engage with the health service are changing. Nevertheless, as I have said, I believe that there is a future for all those facilities in our health service.
On the second question, I do not think that it is necessary to take any additional powers. We will work with the boards and will continue to monitor their activity and engage with them effectively to ensure that the outcome of the consultation that I have announced today—whatever that might be—is delivered effectively in all areas.
On behalf of the 24,000 people in my constituency who petitioned the Parliament, I whole-heartedly welcome the minister's statement and commend his actions. He has clearly listened to our concerns and has demonstrated that he is prepared to take strong action to protect patients' interests.
I have two very quick questions. First, will he send a strong signal that he expects patients from the Helensburgh and Lomond areas to be cared for by NHS Greater Glasgow? After all, that is what they and their local authority, Argyll and Bute Council, want and, frankly, it is only common sense.
Secondly, will the minister lend his support to the innovative model of integrated care that is being developed by general practitioners, clinicians and nurses at the Vale of Leven hospital, which creates a safe and sustainable future for the hospital by breaking down divisions between primary and acute care?
On the latter question, I am happy to encourage the continuation of such innovative approaches. We have tried to support the Vale of Leven hospital and will continue to do so while the model is being developed. We certainly look forward to its fruition.
As for patients in the Helensburgh and Lomond areas, I give the same answer to Jackie Baillie that I gave to George Lyon. I am not stuck with using council boundaries as the basis of any decision that I make. We need to consider patient flows and listen to the voice of communities and folk in the forthcoming formal consultation. At the moment, I am simply trying to signal that members should not necessarily assume that my solution will be based on coterminosity. Indeed, my decision might well reflect patient flows and what is best for patients in this situation.
With regard to Argyll and Clyde, the minister stated this morning:
"Key services have been sustained and augmented for the benefit of local people."
Of course, that is the exact opposite of what has been happening in Argyll and Clyde, as services have been downgraded or lost in Inverclyde and Dunbartonshire. That is why local people have been out on the streets protesting. Will the minister tell me which of the services that have been downgraded or lost at the Vale of Leven hospital and at Inverclyde royal hospital will, as a result of the scrapping of NHS Argyll and Clyde, be returned to those hospitals, which is what local communities demand and require?
Of course, it is the no-change party that always wants no change in health care. However, health care is changing markedly. We want to provide more services in our communities, which is why chemotherapy and other services are being taken out of the acute setting and put into local settings and why specialisation takes place where necessary in the patient's best interests. That is a challenge for all health boards. We want folk to be cared for in their community and some of the work that NHS Argyll and Clyde has been involved in has reflected that positive approach, in which people are cared for where they want to be cared for: in their own communities and, indeed, in their own homes. I am sure that the member would also want to reflect on the fact that NHS Argyll and Clyde has quite successfully met its waiting times targets and has reduced bedblocking to one of the lowest levels in Scotland.
I must say that I do not share the member's analysis. The SNP is a no-change party. It will ensure that patients do not receive the best service and that any outcomes will not be the best ones for them or for their families. Our key driver is that services in Scotland should be provided as locally as possible. Indeed, more than 90 per cent of our services are provided in the local community. As for acute services, they must be highly specialised and ensure successful outcomes for patients.
I, too, welcome the announcement that the £80 million millstone of debt is now being lifted. It has proved a major obstacle to progress and the Executive should be congratulated on making the right decision.
In his statement, the minister alluded to some of the anxieties—
Ms Alexander, do you have a question?
I have indeed. The minister said that anxieties and fears over the future of the Royal Alexandra hospital were unfounded, and that lifting the debt burden would create a platform for better services. I would be grateful if he could expand on that comment.
I think that I can do so. The RAH is and will remain a valuable resource. Because sick people will still require its services, we will still need the people who provide those services to work there. That contribution will continue.
This issue is not about patient care but about a boundary, a line on a map and a management structure. I believe that the RAH has a strong future in the health service in Scotland. The services that we deliver today will continue tomorrow, even though there might a different line on the map.
NHS Argyll and Clyde has had no credibility for a long time. However, this morning's announcement will mean little unless local people and NHS staff are guaranteed that it is not simply a balance-sheet rearrangement of cuts and closures. I ask the minister to give an unequivocal guarantee that the programme of cuts and closures will be halted while the consultation takes place. I would hate to think—[Interruption.] Well, let us hear it clearly. I would hate to think that the cuts and closures would be rushed through in three months and that the Executive would then wash its hands and blame those cuts and closures on a board that had been abolished.
Could we have a question please, Ms Curran?
That was it.
I am not sure from which planet the member has landed, but she may have missed my opening statement. I do not recognise the agenda of cuts and closures that she describes. We have made historic investments in the health service in Scotland. All that investment is taking place, from the radical changes and outcomes for patients that are making a real difference for them, to the year-on-year above-inflation increases in the health service and the investment in consultants, nurses and doctors, There is no programme of cuts and closures. There is a change for the better for patients. Our health care system has been reconfigured to ensure that services are delivered as locally as possible and are as specialised as necessary. It is not about a hidden agenda of cuts and closures but about taking away up to £80 million of debt from a health board, to ensure that it can concentrate on the future of patients and their care in the community without that millstone round its neck. That is what is important for patients. Let us think about patient care, not debt.
I welcome the prospect of a new beginning, but the minister did not make a good start today. The previous dramatic reorganisation was not three or four years ago, as he said in his statement, but 30 months ago, on 17 December. We have heard the same rhetoric today as we heard on 17 December. As for today's announcement, if, as the minister says, the consultation is not intended to reopen the debate on decisions that have already been taken, how can it be called genuine? [Interruption.]
The lights going out on the nationalists? I thought that that had happened in early May, but that is another matter entirely.
This is about ensuring that patient care is at the heart of what we do. The geography of the current structure of the board was, to put it bluntly, not working. People in the local community have pointed that out to me on many occasions, and we must ensure that we put the local community first. We must ensure that we invest and that we give confidence to the staff and management in that community that the care that they provide today will be provided tomorrow and in future. We must ensure that we take away that debt and that pressure, so that we can focus on the patient. However, we must also reflect, as many other members have done, on the fact that the board does not have a sustainable future because the geography does not work. We have made a tough and, as some members have pointed out, difficult decision. It is not a good day for the NHS. Nonetheless, the decision is right and there will be significant positive change in that local community.
I rise to speak as convener of the Audit Committee, whose report precipitated today's statement. The minister has acknowledged the Health Department's share of responsibility in the failure to agree a financial recovery plan and has said that lessons have been learned and procedures revised. Will he tell us how such failures of process, which could affect other boards with deficits, will be avoided in future? Is it possible for the accountable officer, Dr Kevin Woods, to brief the committee on the writing-off of the deficit and the newly agreed Argyll and Clyde recovery plan?
To take the member's first point about the Audit Committee report precipitating the debate, I have to say that I waited for the report before making my decision public. It was part of the decision-making process in which I have had to be involved throughout this unfortunate set of circumstances. Having made that point, I reassure the member that I am happy not just to have Kevin Woods come along to the Audit Committee to give evidence on the matter but—as the report is due to me in July 2005—to share with the committee our findings with regard to the review of the internal procedures relating to the submission, review and agreement of financial plans in the NHS in Scotland.