Report on the 2013/14 Draft Budget

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The Scottish Government's Draft Budget for 2013-14

CONTENTS

Context
Analysis of the evidence

Question 1: Are levels of health spending adequate?
Question 2: Are we spending the budget wisely?
Question 3: How are we ensuring that services are efficient?
Question 4: What are we doing to ensure that the quality of service regarding outcomes for patients is protected?
Question 5: How are we planning for change?

The Draft Budget: is it enough?

Sport
Equalities
Climate change

Annexe A: Extract from Minutes of the Health and Sport Committee

Annexe B: Oral evidence and associated written evidence

Annexe C: List of other written evidence

The Scottish Government's Draft Budget for 2013-14

The Committee reports to the Parliament as follows—

CONTEXT

1. This paper analyses the evidence collected by the Health and Sport Committee during its scrutiny of the relevant sections of Chapter 3 (Health and Wellbeing) of the Draft Budget for 2013-2014.

2. The Committee asked for evidence in writing and invited oral evidence from several interested parties; these are listed in an Appendix.

3. The Cabinet Secretary for Health and Wellbeing described the relevant section of the budget as follows—

“We have also done two specific things for the next two years. First, we have ensured that there is a real-terms increase in the budget allocated to the territorial boards as they are primarily—but not exclusively—involved in front-line services. That means that next year, with a deflator of 2.5 per cent, the boards will get an average increase of 3.3 per cent, which is a real-terms increase of 0.8 per cent. The year after that, with the deflator still at 2.5 per cent, boards will get an increase of 3.1 per cent, which is a real-terms increase of 0.6 per cent.

Secondly, we have shifted money from resource into capital. Clearly, there are major capital works that we must ensure happen so, as well as shifting more than £300 million over the next three years, we also have the £750 million non-profit-distributing programme.”1

4. The Committee noted the Level 2 spending plans (in real terms) contained in the draft budget 2013-14, that had been summarised by SPICe in the undernoted table2

Health and Wellbeing budget – Level 2 spending plans (real terms)

£m

2012-13 prices

2012-13
2013-14
2014-15
Change 2012-13 to 2013-14,
£m
Change 2012-13 to 2013-14,
%
NHS and Special Health Boards
8,862.3
8,902.2
8,924.1
39.9
0.5%
Other Health
2,720.7
2,622.6
2,469.6
-98.1
-3.6%
NHS and Special Health Boards + Other Health
11,583.0
11,524.8
11,393.7
-58.2
-0.5%

5. The Committee additionally noted—

  • the portfolio had received a relatively generous uplift compared to other portfolios;

  • the budget for territorial NHS boards with frontline responsibilities had been increased to above general inflation;

  • there was some reallocation between NHS boards on the basis of the national formula for weighted capitation funding;

  • the capital budget is subject to several partly offsetting pressures, but there is likely to be a reduction overall;

  • spending on workforce education and training falls in real terms;

  • additional funds are available for tackling pandemic flu and for early detection of cancer. However, other public health programmes have continued to be frozen in cash terms and hence fall in real terms;

  • there is earmarked funding for the programme of self-directed support, and

  • there are reductions in budgets for eHealth and research.

ANALYSIS OF THE EVIDENCE

6. The evidence was grouped around answers to the five main questions that the Committee plans to make a standing item of its budget scrutiny, as follows:

  1. Are levels of health spending adequate?
  2. Are we spending wisely?
  3. How are we ensuring that services are efficient?
  4. What are we doing to ensure that the quality of service regarding outcomes for patients is protected?
  5. How are we planning for change?

7. While there is overlap, this forms a useful framework. The draft budget does not address any of these directly, and arguably it does not even address them indirectly, although the Committee realises it is not designed to do so; we return to this issue in the final section of this report.

Question 1: Are levels of health spending adequate?

8. All the evidence presented to the Committee suggests that the draft budget indicates the Health portfolio remains a priority, with a more generous allocation than other portfolios.

9. This question raised three key themes:

  • Policies: What are the policy priorities and what budget implications do they have?

  • Pressures: What are the cost pressures on the budget?

  • Priorities: Are we choosing between different services just now, and if so, on what basis?

Policy priorities

10. In assessing whether the budget is adequate, it is not only cost pressures from pay, prescribing, etc that have a bearing. Policies set by Scottish Government Health Directorate (SGHD) are also relevant if they involve additional costs. The Committee notes that Chapter 3 lists 42 policy priorities for the portfolio (34 in health) and, several pages later in the document, the section on health lists 26 things that the budget will allow to happen.

11. The Committee does not disagree with any of the things proposed, but considers that greater clarity could have been provided in relation to how the 42 (or 34) priorities relate to the 26 actions:

  • It is not clear how the 42 (or 34) priorities (or the 26 actions) relate to the HEAT targets for 2012-13 or to SG’s top-level indicators.

  • It is not clear how the priorities and actions link to the budget – while some items have a specific financial allocation attached this may not represent the full cost and only a few items have this information at all.

12. The Committee recognises the merits of making progress across a broad range of areas, with steady progress in most and more specific progress in some (such as waiting times). However, it raises the issue about how much progress is possible when the admittedly limited extra resource is spread over 42 things (maybe more). The Cabinet Secretary warned: “One can set too many targets and end up not achieving any.”3

13. The Committee notes that the Cabinet Secretary also said—

“The key priorities for 2013-14 will be, first, to develop a shared understanding with everyone involved in delivering healthcare services; secondly, to secure greater integrated working; thirdly, to prioritise anticipatory care and preventative spend; fourthly, to prioritise support for people to stay at home as long as appropriate; and, finally, to take action to ensure that people are admitted to hospital only when it is not appropriate to treat them in the community.”4

14. While it is not always clear what is intended (for example, what is a ‘shared understanding’ and how will we know when it has been arrived at?) the Committee feels this offers a much clearer focus than is contained in the draft budget.

15. The Committee therefore recommends that future statements of policy priorities be concise and focused.

Cost pressures

16. The Draft Budget does not include a prediction of cost pressures that it anticipates to face services covered by the portfolio in 2013-14. This makes it difficult to judge whether the increases are appropriate. When SGHD discussed the topic, officials only spoke in terms of the ‘headline’ general inflation rate (i.e. the GDP deflator of 2.5%).

17. There appears to be evidence, however, that inflationary pressures within the NHS have historically been higher than those within the wider economy. The BMA, for example, cited an Institute for Fiscal Studies report that suggested the annual increase in spending on the NHS is 4.6% above inflation (1950-1951 to 2008-09)5.

18. The Committee has drawn up two lists of cost pressures in the health sector, one of recurring pressures and one of ‘special items’:

Recurring pressures

  • Ageing population with more multiple needs coupled with increasing numbers of elderly people – the British Medical Association (BMA) submission estimated a 1.2% per increase per annum above inflation was necessary from this demographic pressure alone.

  • New medicines and prescribing volume – the Royal College of Nursing (RCN) submission reminded the Committee of its findings earlier this year that boards were planning increases in GP prescribing of 5.2% and in hospital prescribing of 8.3% (compared to 2.5% for ‘headline’ general inflation).

  • Staff cost pressures – increases in grading with seniority lead to cost rises even with a pay freeze but the BMA submission highlighted that in 2013-14 it is possible a 1% pay award will be made.

‘Special items’

  • Need to resolve capital maintenance – the Committee heard from SGHD that at least £400m was required to address this. The Committee notes Audit Scotland has discussed a figure of £1bn, but understands that SGHD has tried to focus on a list of ‘essential’ items. Moreover, it is understood that many recorded maintenance items currently “on the books” would disappear as new facilities came on-stream and the maintenance requirements on the facilities that they had replaced no longer existed.

  • Changes to pensions.

  • Equal pay legislation.

19. The Committee heard that SGHD was watching the second and third items on the list but at present no estimate of cost could be made.

20. In its submission, the RCN said that while SGHD had protected budgets for the territorial NHS boards in 2013-14, the cost pressures listed above meant that this was not necessarily the same as protecting services. There would be a problem if efficiency savings fell short of the target or if cost pressures exceeded planned levels.

21. The Committee recommends that SGHD publish a discussion paper within the next six months, which analyses (i) types of cost pressures relevant to the health service, (ii) evidence on the historical levels of these variables, and (iii) recent time trends in these pressures in Scotland. An example of this would be a detailed analysis of the maintenance budget.

22. The Committee welcomes the priority that has been given in the Draft Budget to funding of the territorial boards, because it believes that this prioritisation helps to protect frontline services.

Prioritisation

23. The Committee heard evidence that prioritisation – which some witnesses called rationing – was already taking place in health and social care. In health care some new medicines were not being funded6 and in social care, threshold levels of eligibility to receive services were being raised.7

24. The Cabinet Secretary confirmed that if prioritisation were necessary, he was clear about the basis he would choose—

“If resources get even tighter and if the cuts agenda continues into the long term, we will have to prioritise on the basis of clinical need and prioritise resources for areas of greatest need. After all, we are talking about a national health service and clinical need has to be the key criterion in the allocation of resources.”8

25. As an example, the Cabinet Secretary and senior officials were asked whether they were prepared to follow through on their commitment to preventative spending and they replied that they were. However, the budget allocation has implicit judgements in it – there is the decision to protect the health budget by allocating new funds above the rate of general inflation, the decision not to reallocate some of the existing health budget to other portfolios and the decision to reinvest efficiency savings in frontline services. Both of these are welcome.

26. The Committee fully acknowledges the Scottish Government’s commitment to move towards a preventative spending agenda. However, the Committee also understands that such a move is dependent on significant cultural change taking place within the NHS and, indeed, in other organisations such as local authorities. The Committee’s impression is that the NHS’s response to the move towards preventative approaches has been a little slow and that the required cultural change has been difficult to bring about.

27. While the Committee understands the Scottish Government’s decision not to reallocate efficiency savings to other portfolios and to allow them to be used to maintain front line services, this decision may create a tendency to reinforce the status quo, with the result that the shift to preventative services may be slower than might otherwise be the case.

28. That said, the Committee is aware that the proposed bill to integrate adult health and social care, due to be introduced later this year, should lead to an accelerated drive towards prevention. Nevertheless, the Committee will monitor future spending plans for evidence of action to implement a shift to preventative spending and to increase the pace of change.

Question 2: Are we spending the budget wisely?

29. This question was intended to raise two sets of issues:

  • The balance of spending across the headings within the Health and Sport portfolio based on the best ‘bang per buck’.

  • The balance of health-related (or health-creating) spending across portfolios.

Within the Health and Sport portfolio

30. The Coalition of Care and Support Providers in Scotland (CCPS) and SCVO both said there was limited value to making changes within the portfolio if the most significant gains were to be made by doing fundamentally different things – for example tackling other issues at the root of ill health, in other portfolios, such as poverty and poor housing. The Committee acknowledges this point, but in terms of scrutiny of the draft budget the question is still legitimate, as the reallocation of £11.5bn could have a very powerful effect.

31. Using traditional line-by-line scrutiny of the budget, witnesses suggested several areas where proposed reductions in spending should be reversed. Several witnesses mentioned e-Health while the BMA called for more spending on research.

32. However, witnesses found it hard to couple disinvestments with proposed increases in spending (or reversal of cuts). In part, this is an inevitable result of the highly aggregated nature of the financial allocation proposed in the budget. The Committee appreciates that the challenges stakeholder organisations face in suggesting areas in which budgets could be reduced, given that very little detail is presented below Level 3. There is, however, a significant number of historic examples and data from Level 4 in previous years, that could be drawn upon in order to assist organisations consider options.

33. The Committee heard two proposals that tried to identify an actual switch in funding, as follows:

  • Targeting efficiency savings on reducing inequalities: The RCN made the point that reducing health inequalities was also a policy priority yet it generally seemed to receive less attention. In terms of the draft budget, it did not appear to be receiving a lot of extra funding – for example, efficiency savings are reinvested by NHS boards when they could be spent on measures to address inequalities.

  • Diverting new money from frontline services to preventative services: All witness who expressed a view supported the principle of a shift in funding to preventative spending. The Cabinet Secretary cited several programmes in this area such as family nurse partnerships.

34. However, it was unclear how much was being spent on these programmes this year and how this was planned to change in 2013-14. The Committee is also aware that there may be questions to be asked about the extent to which the current funding formula under NHS Scotland Resource Allocation Committee (NRAC) reflects geographical inequalities. The Draft Budget does not provide detail like this, which is another example of the lack of clarity of the document. Without a baseline on the amount spent on prevention, the debate is reduced to citing case studies; while this is helpful, it not satisfactory either as it gives no idea what has happened across the board, apart from that case study.

35. Some witnesses felt that the switch to prevention was not moving rapidly enough. Professor McLaren pointed out that additional cash funding over the three years of the Comprehensive Spending Review amounted to £1bn and an option was to allocate all or most of this to prevention9. At present, most of this has been allocated to NHS boards. A consequence of such a decision would be either a reduction in services or efficiency savings at roughly double their current level.

Across portfolios

36. A more radical version of the second proposal, to use health portfolio growth money to fund preventative services, would be to switch money away from the health portfolio to other SG portfolios that would commission services with a health benefit. An example would be spending on early years developments that are outside of the control or influence of the NHS.

37. Professors McLaren and Bell, in particular, raised questions about whether the health budget should be protected by SG, since there was some evidence that bigger health gains would be obtained by programmes in other areas. Professor McLaren, for example, remarked—

“The NHS’s budget is being protected considerably and, if the situation remains the same, it will be protected until 2015-16. Over that period, if health workers’ wages are kept flat, as is the case in the rest of the public sector, that will make more than £1 billion of spending money available in the NHS. If that money is not going on staff, what is it going on? There is an opportunity to put money into new things, if staff costs are kept down. It is important, even at this stage, to consider where the best areas are for that money to go to.”10

38. Whereas the previous question focuses on pressures on the health service, and thus questions whether the budget is adequate, this alternative view raises the issue of whether the health service budget is too big and should be reduced.

39. The Committee noted these views, but the evidence to explore them further is lacking. A key issue is what benefits could be expected and when they would accrue with the preventative spend and what would be lost as a result of the switch of funding away from existing services. Without this information, it is impossible to decide whether to support such a policy or not.

40. The Committee recommends that SGHD produce a paper showing how previous years’ efficiency savings have been reinvested by territorial health boards in order to inform future discussion and debate around the use of efficiency savings for preventative spending.

41. The Committee notes the BMA’s suggestion that all new public policies should include a health impact assessment.11 This could be a way to start to gather evidence on the health benefits of programmes outside the health portfolio.

42. The Committee recommends that the Scottish Government report to the Committee, in due course, on the feasibility of introducing a health impact assessment for all new SG policies.

Question 3: How are we ensuring that services are efficient?

43. Having regard to the pressures faced by the NHS, it seems inevitable that efficiency savings will be required in future years. This will be the case irrespective of how integrated or ‘preventative’ services are at the start of the year. This question deals with cost savings; the Committee is fully aware that quality is an issue and this is dealt with under the following question.

44. In its review of NHS boards’ plans for 2012-13, Audit Scotland reported that 62% of planned savings were classified by NHS boards as being at high-risk of not being achieved. Audit Scotland also identified some use of non-recurring savings to meet targets, which means that the savings would require to be found again in respect of the following year, in addition to the new savings for that year. The Cabinet Secretary commented on this point—

“I am not concerned per se, as long as we can continue to identify the sources of funding that we need to provide the quality and level of care that Scotland needs.”12

45. The RCN said many boards were further behind on achieving their efficiency savings targets than they would expect. They pointed out that some boards struggled to achieve their targets last year, with three requiring brokerage from SGHD, even with protected budgets.13

46. The SGHD confirmed that these loans were all to meet dual running of new and old premises and undertook to provide details.

47. The draft budget makes no estimate of the level of efficiency savings that will be necessary in 2013-14. This is another aspect of the lack of clarity in the document.

Sources of savings

48. As noted above, some witnesses argued that savings could be achieved by changing the whole system to a different form. In terms of specific savings within the health portfolio the Committee heard various proposals for making additional savings as follows:

  • Withdrawing A&E services UNISON stated that plans to centralise A&E services in Lanarkshire and Ayrshire by withdrawing these services from Monklands and from Ayr Hospitals “would have saved significant amounts of money” 14.

  • Resource transfer The Committee has an on-going concern about the money reallocated from the health portfolio to local government under the heading of resource transfer. This was originally intended to fund the care of people resettled into the community from long-stay hospitals. The Committee heard evidence that the way the money was used has always been opaque, and witnesses had not received a satisfactory answer to how the amount transferred changed over time.

49. In response to a question, the Finance Director at SGHD appeared to suggest the funds were now intended to address delayed discharges.15 It is not clear whether this is an official policy and whether this now accounts for all the resource transfer monies.

50. The Committee recommends that SGHD collect from health boards a detailed analysis of the amounts of money used for resource transfer, what these are being used for and – if this is different – what they are intended to be used for. The response should include plans to make the data much more accessible than they are at present.

51. Other suggestions for potential savings included:

  • A more detailed review of the growth in the budget line for “miscellaneous other services” (suggested by SCVO)16

  • Funds retained by SGHD (suggested by UNISON)17

  • Funding of homeopathy services as an example of something that lacks an evidence base (suggested by the BMA)18

52. In general, the draft budget only allows suggestions for savings on a very limited amount of the total portfolio budget, since so much of it is aggregated into allocations to boards at Level 3

53. Another concern is that among the policy priorities listed in the document, SGHD seems to be taking no role at all in the disinvestment agenda in which many NHS boards are very heavily engaged. This perception may not be correct, but if it does not make the top 42 priorities then SGHD’s efforts seem to be somewhat out-of-line with the realities facing frontline services. The Committee is aware from a parallel inquiry on access to newly licensed medicines that some hard choices are already being made about what the NHS can and cannot afford. This is the most visible part of the debate but this document gives no evidence SGHD feel it has a role to play in leading the debate. The Committee is also aware that there may be policy choices to be made in approaching the same issue in different ways. For example, while there is clearly a demand for expensive, end-of-life drugs in the case of cancer treatment, there may be questions to be asked about whether better outcomes might be achieved were some of this funding to be diverted to early detection and improvements in individual lifestyle.

54. The Committee asks SGHD to submit a report of the efficiency and productivity programme to date, including disinvestment or service redesign and evidence that this work has had an impact at NHS board level. In addition, the response should set out how this work will be developed into 2013-14.

Question 4: What are we doing to ensure that the quality of service regarding outcomes for patients is protected?

55. The Committee is mindful that the debate about the budget becomes one about financial issues, with the quality aspects neglected because they are integrated into analysis.

56. The RCN made the point that protecting budgets is not the same as protecting services,19 reflecting the possibility that cost pressures exceed inflation. The Committee appreciates that, as health services try to make savings, it is important to monitor the impact this has on the quality of service for the patient. While the definition of an efficiency saving is a reduction in cost with no impact on quality, the Committee noted that it had no hard data to demonstrate that this was what had been achieved. In general, the Committee was being asked to accept verbal assurances that quality was no worse.

57. The Committee certainly accepts that meaningful change that improves patient experience can be made and that not all cost reductions harm quality. However, at present, there is a lack of proof one way or another. The Committee supports the Cabinet Secretary’s comment that “It is the outcomes that matter”20. However, there is considerable frustration that the amount of talk about outcomes exceeds the amount of data. It is strange to note that, 64 years after its inception, the NHS in Scotland has no routine data on whether patients get better as a result of their treatment (other than whether they die, which is quite a crude outcome measure). The Committee is disappointed that of the five questions posed, this was the one where there was the least evidence, yet everyone agrees that it is the most important.

58. The budget briefing prepared by SPICe for the Committee notes that—

“The Quality Indicators are at different stages of development, but are intended to be used for national reporting on longer term progress in meeting the Quality Ambitions and Outcomes. They are intended as indicators of quality and do not have associated targets. The Scottish Government has advised that, in the context of the integration of health and social care, the indicators are currently being reviewed, both individually and as a group, for describing and reporting on progress towards the quality outcomes and ambitions.”21

59. The Committee recalled that the Healthcare Quality Strategy, published by SGHD in May 2010, proposed a suite of 12 National Quality Outcome Measures, as follows:

  • healthcare experience;

  • staff experience;

  • staff attendance;

  • Healthcare Associated Infection (HAI);

  • emergency admissions;

  • adverse events;

  • Hospital Standardised Mortality Rate (HSMR);

  • proportion of people who live beyond 75 years;

  • patient reported outcomes;

  • patient experience of access;

  • self-assessed general health, and

  • percentage of last 12 months of life spent in preferred place of care.

60. More than two years later, this suite does not appear to be available and is certainly not evidenced in the draft budget document. It would be particularly useful to know how the measures relating to patient satisfaction and patient reported outcomes are affected when efficiency savings are made.

61. The Committee accepts that the Scottish Government collects a great deal of data in relation to health and wellbeing and although many of the data collected are of very high quality, others are probably of more limited value, and certainly tend not to reflect many of the issues that members face in their mailboxes and constituency surgeries. Moreover, the Committee has found little evidence of data analysis being integrated with the budget planning process.

62. The Committee also considers that more needs to be done to align data collection activities more closely with the 12 National Quality Outcome Measures.

63. The Committee asks that, as a matter of high priority, the Cabinet Secretary send the Committee a progress report on the development of the quality measures promised over two years ago, including deadlines for when the data will be available to inform the Committee’s discussions.

Question 5: How are we planning for change?

64. The intent behind this question was to ask about the process of delivering changes required.

65. The Committee heard from a number of witnesses that change was required, phrased in a similar way—

  • “We cannot go on as we are” (BMA)22

  • “We cannot continue in the same way” (SCVO)23

  • “We have salami sliced a lot of budget heads for the past three years and that cannot go on for ever.” (UNISON)24

66. It was not clear to what extent this was a rhetorical device on the part of witnesses. However, it was clear that no one was actively advocating a policy of “zero change”. In terms of the change witnesses wanted to see, the two main themes were a switch to preventative (or anticipatory) services and a switch to integrated services covering health and social care.

67. There was considerable frustration among witnesses at the pace of change. The Committee took a large amount of interesting evidence from witnesses on why this should be, and comments included:

  • Lack of joined-up thinking in workforce planning (RCN and BMA)25,26

  • local people should make decisions, transfer of power from vested interests – self-directed support could be part of the answer (SCVO)27

  • Change can’t come from top down or be imposed, have to engage the workforce (UNISON)28

  • “The decision-makers in the NHS do not see the medical impact of prevention. They need to get with that agenda.” (SCVO) 29

68. The RCN suggested, however, that the medical model “should not take all the blame” 30.

69. Other factors mentioned included general delays in decision-making and that the third sector was not present when some decisions were made. The Committee did not want to lose these points but was mindful that its main focus in this report was on how these issues had a bearing on scrutiny of the draft budget. With this in mind, the following issues were raised:

Prevention

70. An important issue was the nature of savings from prevention. The Cabinet Secretary said—

“some of our measures should, when fully implemented, save the health service money. Indeed, minimum unit pricing is a very good example of that. Once we get it introduced, it will have quite a dramatic impact on not just the health budget but, for example, the criminal justice budget.”31

71. However, he also commented—

“where those preventative measures do release cash savings, we are reinvesting those back into other areas in the health service to improve the service elsewhere. The whole point is to keep reinvesting to ensure that we keep improving the quality and level of service provision in the national health service. It is a much bigger return on the investment but we will not necessarily reduce the budget; we will reinvest it in other priority areas where we can.”32

72. In its scrutiny of NHS boards plans for 2012-2013 conducted earlier this year, the Committee also heard that the savings of preventative spending were not easy to identify. For example, a cardiovascular initiative launched in 2012 might be predicted to make savings from 2022 onwards but, in reality, other cost pressures develop in the cardiovascular field, such as new technologies and medicines, and the savings are diverted to other new services. This is positive, but shows we must be careful about how we use the word “savings”.

73. On the timing of savings from prevention, the Committee heard differing views. The Cabinet Secretary said—

“I am happy if budgets do not go down as long as the preventative measures have an impact on children’s lives. I would rather invest the money and know that in five, 10 or 15 years’ time those children will not be truants, will not end up in the criminal justice system and are doing much better at school than they would have done if they had not had that support in their early months. This is not a quick-fix approach to reduce budgets in the short term.”33

74. In addition, evidence from the Director General for Health34 (speaking about the ban on smoking in public places) and from the SCVO35 (referring to a specific scheme for older people) stated that the benefits of prevention could be felt in the short-term too.

75. However, there is still the issue of how to free the funds to invest in prevention. The BMA36 and RCN37 made the point that short-term pressures within the health care system cannot simply be ignored, and successive governments seem to have endorsed this approach by putting ever-downward pressure on hospital waiting times. Any loss of funding is likely to cause these to rise again.

76. Although the Committee acknowledges that this is a matter for the next comprehensive spending review (CSR) rather than annual budget scrutiny, it recommends that SGHD be clearer about its expectations for spending on preventative programmes and set out a medium- and long-term plan for the shift in funding it expects to see.

Integration

77. There was recognition that while the Change Fund had the potential to start change, it was essentially limited because it was a small amount of money within the overall budget and was available for a limited period only. In addition, there was criticism of the guidance and monitoring that had been put in place38, and the Committee received evidence that some funds had been used to ‘shore up’ existing services39,40.

78. The BMA offered some important insights, describing the evaluation of integrated care pilots in England41– while there were benefits these were less likely to be seen in the short-term and initially might only be in terms of the process of delivering care, with little impact on the patient experience.

79. The issue of transparency was raised again, with RCN pointing out that there was variation across the country in how funds had been used and, while this might be quite legitimate, it was not explored or explained42. This, coupled with the evidence about the lack of transparency about how ‘resource transfer’ money had been used led to concern that the shift to integrate health and social care budgets would hamper budget scrutiny in the future.

80. On this point, the Cabinet Secretary told the Committee—

“Looking forward to the establishment of the 32 partnership boards for the integration of adult health and social care, it is very important to have an integrated budget made of money flowing from the health board and the local authority into those partnerships. Ensuring that the money is spent properly will obviously require specific audit and monitoring arrangements.”43

81. The Committee recommends that SGHD present plans to the Committee to describe how national budget scrutiny would be undertaken when health and social care budgets have been integrated.

82. The Committee also recommends that SGHD publish periodic reports analysing the variation in spend in different territorial boards in different services. These reports should include outcomes.

THE DRAFT BUDGET: IS IT ENOUGH?

83. The Committee heard evidence that the draft budget lacked transparency in several ways. This has at least three facets.

84. On one level, this is an issue about timing – for example Level 4 details are only supplied for national and SG functions and only as a personal communication to the Health and Sport Committee several weeks after the draft budget is issued.

85. On a second level, this is about the style adopted by SGHD. The Cabinet Secretary made a clear defence of the rationale for brokerage of funds to particular NHS boards, but the transparency implication was that nobody seems to have known about this, including Committee members (including those representing the Forth Valley area) or Audit Scotland, despite SGHD’s claims that it had not been hidden.

86. The third level is, however, probably the most important for budget scrutiny. The draft budget is ideally suited to its purpose as a statement of:

(i) the financial allocation to the portfolio for 2013-14 and how this will be allocated to Level 3, and

(ii) a statement of policy objectives and a list of actions expected in 2013-14.

87. A more accurate name would, therefore, be “A financial allocation plan for Levels 2 and 3”. It would then be clearer what the draft budget does and does not do.

88. Crucially, there are questions about the financial plan for the NHS that the draft budget does not answer. It is not just the Committee that has these concerns: similar comments were made by several of the witnesses, representing organisations that are important partners for SGHD in delivering change. The Cabinet Secretary said his first priority for 2013-14 was “to develop a shared understanding with everyone involved in delivering healthcare services”44, but the Committee questions how is this possible when the budget information is confined to Level 3. here are vital questions about the amount of financial pressure boards will be under, whether funds will be available for change and what priority this has. The draft budget does not address these questions.

89. For adequate scrutiny by the Parliament, as well as for effective partnership working, SGHD must place much more of its data and planning in the public domain. The issue is whether it is reasonable to adapt next year’s chapter of the draft budget to achieve this, or whether a second document is required.

90. The Committee notes that the level and type of information it seeks would make the Health and Wellbeing chapter of the document look quite different to the rest of the document. While there may be a case for providing the same information for all the portfolios/chapters, the most likely way forward for the scrutiny expected in September 2013 is for SGHD to undertake to publish a separate document that addresses the additional information needs.

91. The Committee would welcome additional information and appropriate analysis, both in respect of the previous 12 months and the financial year ahead, which includes the following—

  • retrospective and anticipated cost pressures such as pay, prescribing, equal pay claims etc.

  • performance against existing efficiency savings and planned future efficiency savings

  • anticipated high, medium and low financial risks identified by the Scottish Government and how they are provided for in the budget document

  • trends in available outcome focused and quality-related data).

  • compiled information on actions agreed following NHS boards annual review meetings .

  • information on how policy priorities, including preventative spend initiatives (eg through the change fund) and HEAT targets have been and will be supported within the budget

  • an assessment of the change in the suite of 12 quality measures proposed in the Quality Strategy over the coming 12 months.

92. The Committee welcomes the Cabinet Secretary’s indication that he would be prepared to discuss any suggestions that the Committee might have as regards the presentation of the draft budget and associated information.

93. The Committee recommends that the Cabinet Secretary present such information as is available for 2013-14 as soon as possible. The Committee also recommends that the Cabinet Secretary undertake to publish a supplementary document to the draft budget for 2014-15, containing all of the information requested, on the SGHD website, on the same day as the draft budget.

SPORT, EQUALITIES AND CLIMATE CHANGE

94. The Committee agreed, in its budget approach paper, to include consideration of the impact of budget decisions on equality groups (at the request of the Equal Opportunities Committee) and to adopt a similar mainstreaming approach with climate change (as requested by the Rural Affairs, Climate Change and Environment Committee).

95. The Committee’s evidence session with the Cabinet Secretary was a little constrained because of other business, so there was insufficient time during the session to put questions on equalities, climate change and sport. It was agreed, however, that the Committee could follow up the session with supplementary questions to the Cabinet Secretary. The Committee asked a question on each of these issues in its supplementary question paper.

Sport

96. The Committee asked the Cabinet Secretary:

  • What are the Scottish Government’s key priorities in the budget in relation to sport?

  • What challenges does the Scottish Government face in achieving these?

97. The reply from the Cabinet Secretary told the Committee that the Scottish Government’s key priorities in relation to sport would be to build on the progress that had already been made on establishing a “lasting legacy” from the Commonwealth Games in 2014. Noting that the Committee had recently taken evidence from the Minister for Commonwealth Games and Sport as a part of its inquiry into community sport the Cabinet Secretary’s letter also said that the rollout of community sports hubs programme would lead to improved access to facilities and increased levels of participation in sport and physical activity. This would, in turn, generate significant health benefits for individuals.

98. The letter also noted that the Scottish Government would “continue to invest heavily in our schools sports programme”, and that the Minister had recently announced the a planned Youth Sports Strategy, encompassing early years physical literacy, schools activities and college and university sport, would be introduced next spring.

99. Mr Neil’s letter also indicated that, through sportscotland, the Scottish Government would ensure that resources were “directed towards achieving even greater medal success on the international stage and in particular in Glasgow in 2014”.

100. Finally, the letter noted that, alongside sportscotland and the governing bodies the Scottish Government had begun looking at the volunteer sector, identifying where gaps exist, for example in the number of qualified coaches, and collectively addressing how these might be met.

101. The Committee notes the Scottish Government’s response in relation to sport. The Scottish Government will be aware that the Committee will shortly publish its report on its inquiry into support for community sport, when it will comment in more detail on matters related to sport.

Equalities

102. The question put to the Cabinet Secretary by the Committee was:

  • How will the measures in the draft budget promote equalities?

103. In a comprehensive reply, the Cabinet Secretary noted that in setting the draft budget the Scottish Government had been aware of the potential impact on Scotland’s communities of significant economic and public spending pressures and measures such as the UK Government’s welfare reforms. The spending plans, therefore, were “designed to support economic recovery and growth through the low-carbon economy but also to continue the decisive shift to more preventative approaches, to deliver wider public service reform and to maintain the commitment to a Social Wage … at a time of acute pressure on household incomes”

104. The letter went on to list a number of programmes that would be supported by the budget that were part of the overall commitment to equalities.

105. The Committee notes the Cabinet Secretary’s comments on the way in which the budget will promote equalities. The Committee also welcomes the publication alongside the draft budget, of an Equality Budget Statement, which should help ensure that equality considerations are taken seriously during the annual budgetary process and help subject committees to assess the equality impact of the Scottish Government’s spending plans.

Climate change

106. The following questions were put to the Cabinet Secretary by the Committee:

  • What measures within the draft budget are intended to contribute towards the Scottish Government climate change targets?

  • What resources are to be devoted to these measures specifically?

107. The Cabinet Secretary’s reply suggested that it was “vital that Health Boards continue to reduce their CO2 and other greenhouse gas emissions” and noted that Health Facilities Scotland (HFS) provided a range of energy and climate change services to NHS boards to support them in doing so. The reply also noted that HFS had published, earlier this year, A Sustainable Development Strategy for NHS Scotland which detailed what NHS Scotland was doing to implement the Scottish Government’s climate change duties of public bodies.

108. No specific answers were provided to the questions about what measures in the draft budget were intended to contribute to the climate change targets and what resources were to be devoted to these measures.

109. The Committee notes the Cabinet Secretary’s response to its questions on climate change. Comparing the response on climate change to that on equalities, the Committee concludes that mainstreaming of the former appears to be at a much earlier stage of its development than the latter. While the publication of the sustainable development strategy for NHS Scotland is to be welcomed, the Committee considers that more could be done within the budgetary process to demonstrate how measures in future draft budgets can contribute to what are widely acknowledged as ambitious climate change targets.

ANNEXE A: EXTRACT FROM MINUTES OF THE HEALTH AND SPORT COMMITTEE

24th Meeting, 2012 (Session 4)

Tuesday 18 September 2012

Draft Budget Scrutiny 2013-14 (in private): The Committee agreed to defer consideration of this item.

25th Meeting, 2012 (Session 4)

Tuesday 25 September 2012

Draft Budget Scrutiny 2013-2014 (in private): The Committee considered and agreed its approach to the scrutiny of the Scottish Government's Draft Budget 2013-2014.

26th Meeting, 2012 (Session 4)

Tuesday 2 October 2012

Draft Budget Scrutiny 2013-2014: The Committee took evidence on the Scottish Government's Draft Budget 2013-2014 from—

Professor David Bell, Adviser, Finance Committee;

Professor John McLaren, Centre for Public Policy for Regions, University of Glasgow.

28th Meeting, 2012 (Session 4)

Tuesday 23 October 2012

Draft Budget Scrutiny 2013-2014: The Committee took evidence on the

Scottish Government's Draft Budget 2013-2014, from—

Dr Kirsty Long, Equality and Diversity Adviser, NHS Education for Scotland;

Martin Woodrow, Scottish Secretary, British Medical Association;

Annie Gunner Logan, Director, Coalition of Care and Support Providers in Scotland;

Rachel Cackett, Policy Advisor, Royal College of Nursing Scotland;

John Downie, Director of Public Affairs, Scottish Council for Voluntary Organisations;

John Gallacher, Scottish Organiser, UNISON;

Alex MacKinnon, Director, Royal Pharmaceutical Society;

Paul Zealey, Head of Engagement and Legacy, GLASGOW 2014;

Stewart Harris, Chief Executive, sportscotland;

Ian Hooper, Vice Chair, VOCAL, Director of Sport and Special Projects, Glasgow Life;

Kim Atkinson, Policy Director, Scottish Sports Association.

29th Meeting, 2012 (Session 4)

Tuesday 30 October 2012

Draft Budget Scrutiny 2013-2014: The Committee took evidence on the Scottish Government's Draft Budget 2013-2014: from—

Alex Neil, Cabinet Secretary for Health and Well-being, John Matheson, Director of Health Finance and Information, and Derek Feeley, Director General Health and Social Care and Chief Executive of NHS Scotland, Scottish Government.

30th Meeting, 2012 (Session 4)

Tuesday 6 November 2012

Decision on taking business in private: The Committee agreed to take item 5 in private. The Committee also agreed to take consideration of a draft report on the Draft Budget 2013-14 in private at future meetings.

31st Meeting, 2012 (Session 4)

Tuesday 13 November 2012

Draft Budget Scrutiny 2013-2014 (in private): The Committee considered a draft report on the Draft Budget 2013-2014. Various changes were agreed to and the Committee agreed to consider a further revised draft at a future meeting.

32nd Meeting, 2012 (Session 4)

Tuesday 20 November 2012

Draft Budget Scrutiny 2013-2014 (in private): The Committee considered and agreed a draft report to the Finance Committee on the Scottish Government's Draft Budget 2013-14.

ANNEXE B: ORAL EVIDENCE AND ASSOCIATED WRITTEN EVIDENCE

26th Meeting, 2012 (Session 4) Tuesday 2 October 2012

Oral Evidence

Budget Adviser, Finance Committee
University of Glasgow

28th Meeting, 2012 (Session 4) Tuesday 23 October 2012

Written Evidence

British Medical Association
Coalition of Care and Support Providers in Scotland
Royal College of Nursing
Scottish Council for Voluntary Organisations
UNISON
Royal Pharmaceutical Society

Oral Evidence

NHS Education for Scotland
British Medical Association
Coalition of Care and Support Providers in Scotland
Royal College of Nursing
Scottish Council for Voluntary Organisations
UNISON
Royal Pharmaceutical Society
GLASGOW 2014
sportscotland
VOCAL
Scottish Sports Association

29th Meeting, 2012 (Session 4) Tuesday 30 October 2012

Oral Evidence

Scottish Government

Supplementary Written Evidence
Scottish Government Figures on Efficiency Savings
HEAT Targets and 2013-14 Draft Scottish Budget

ANNEXE C: LIST OF OTHER WRITTEN EVIDENCE

Age Scotland
Health and Social Care Alliance Scotland


Footnotes:

1 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2890-1

2 Scottish Parliament Information Centre. (2012) Draft Budget 2013-14.Table 5. Available at :http://www.scottish.parliament.uk/Research%20briefings%20and%20fact%20sheets/SB_12-62.pdf [Accessed 15 November 2012].

3 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2892.

4 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2880.

5 Institute for Fiscal Studies. 2009 A Survey of Public Spending in the UK. Available at http://www.ifs.org.uk/bns/bn43.pdf

6 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2849.

7 Health and Social Care Alliance Scotland. Written submission.

8 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2905.

9 Scottish Parliament Health and Sport Committee. Official Report, 2 October 2012. Col 2740.

10 Scottish Parliament Health and Sport Committee. Official Report, 2 October 2012. Col 2740.

11 Scottish Parliament Health and Sport Committee. Official Report, 2 October 2012. Col 2828.

12 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2809.

13 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2830.

14 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2849.

15 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2900.

16 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2847.

17 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2848.

18 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2848-9.

19 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2830.

20 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2892.

21 Scottish Parliament Information Centre. (2012) Draft Budget 2013-14. Available at: http://www.scottish.parliament.uk/Research%20briefings%20and%20fact%20sheets/SB_12-62.pdf [Accessed 15 November 2012].

22 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2828.

23 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2826.

24 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2849.

25 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2835.

26 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2836.

27 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2836.

28 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2844.

29 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2831.

30 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2844.

31 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2898.

32 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2904.

33 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2904.

34 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2905.

35 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2842.

36 British Medical Association. Written submission.

37 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2843.

38 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2842.

39 Age Concern. Written submission.

40 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2842.

41 BMA. Written submission.

42 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2842.

43 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012.Col 2900.

44 Scottish Parliament Health and Sport Committee. Official Report, 30 October 2012. Col 2880.

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