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Health Authorities (Financial Deficits)

NHS 24 – in the Scottish Parliament at 2:00 pm on 18th November 2004.

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Photo of Brian Adam Brian Adam Scottish National Party 2:00 pm, 18th November 2004

To ask the Scottish Executive whether any health authorities are projecting financial deficits for the current year and, if so, which authorities and what the projected deficits are. (S2O-4074)

Photo of Andy Kerr Andy Kerr Labour

Excluding the special boards, which do not project any deficits, four of the 15 health boards are forecasting to over-commit. The figures are: £60.8 million for Argyll and Clyde NHS Board, which is 11 per cent of its budget; £13.6 million for Grampian NHS Board, which is 2 per cent of its budget; £4.6 million for Greater Glasgow NHS Board, which is 0.3 per cent of its budget; and £20.4 million for Lanarkshire NHS Board, which is 3 per cent of its budget.

My position is clear: I put the interests of patients first. Public organisations must manage their finances and NHS health boards are no different from any other public organisations in that respect—it is unacceptable for health boards to overspend against their budgets. From that fundamental position, Executive officials are working closely with the health boards concerned to ensure that they return to financial balance.

Photo of Brian Adam Brian Adam Scottish National Party

I share the minister's concern to put patients first. Does he consider that, by freezing two additional posts for infection-control nurses, Grampian NHS Board is delivering for patients, particularly given the clinical impact of that action, or does he think that that is acceptable in order to balance the books?

Photo of Andy Kerr Andy Kerr Labour

The member raises an interesting point about balancing the books. Budgets in the NHS in Scotland for the year 2002-03 went up by 7.2 per cent; the following year they went up by 7.8 per cent; and this year they have gone up by 7.25 per cent. The budget will rise from £8.8 billion in 2005-06 to £10.3 billion.

I will not second-guess the decisions of individual boards. Currently, however, 1 per cent of the overall NHS budget is an overspend. I expect as many of our health boards as possible to come into line. Grampian NHS Board is performing to the recovery plan that it published with us and it expects to be in balance by 2006-07.

Given the opportunities that are provided by the new work force contracts, the redesign and reconfiguration of services and increased regional planning, I expect our health boards to manage their resources effectively. The Executive has provided the resources for our health services to run effectively and we have covered many of the pressures for our health boards. I expect the boards to make their own decisions, but I also expect them to manage their resources effectively in the interests of patients.

Photo of Mary Mulligan Mary Mulligan Labour

I am in favour of the agenda for change proposals, so the minister will understand that I was concerned at the weekend to hear it said that he and the Executive are "clueless" as to how much the proposals will cost. What is he doing to ensure that health boards have the resources to fund fully the agenda for change?

Photo of Andy Kerr Andy Kerr Labour

Agenda for change is one of those pressures in the health service for which the Executive seeks to reassure health boards that the money and resources are available to cover the demand. The report to which the member referred was misleading and inaccurate. The new agenda for change system is probably one of the most radical overhauls of the payment systems in the NHS since 1948; it represents a huge undertaking, which has been negotiated over a number of years with several partners, including the four United Kingdom health departments.

It would be better if people reported matters more accurately, based on the information that is given to them. Far from being clueless, we have carried out detailed cost modelling based on a pilot site in West Lothian, in which the member will be interested. That was mapped across more than 25,000 workers in NHS Scotland and was then developed to give an all-Scotland model of the resources required for agenda for change. We gave details of that in response to the reporter's inquiry, but of course he chose not to mention it.

I reassure members that the Executive is absolutely clear about the impacts of agenda for change in Scotland. We continue to map those impacts and we are working with our health boards at a local level. Agenda for change will bring significant benefits to patients and those who work in the organisation. We are not clueless. In fact, I would argue that, if any public or private sector organisation had the degree of management information that we have in this area, they would be very jealous indeed.

Photo of David Davidson David Davidson Conservative

I am quite taken aback by the staggering defence of the indefensible. When the Minister for Health and Community Care came to the Health Committee recently and talked about his budget—in which he had some interest in his former role as Minister for Finance and Public Services—he said clearly that he would support and help to bail out Argyll and Clyde NHS Board as part of the package, whereas it seems that the other health boards that are in difficulty will just have to manage their books. Will the minister care to cast his eye once again over the Arbuthnott formula, which disadvantages Grampian immensely, to the point that services are at risk of being cut? Only today I heard about a delay in getting access to breast screening, which was unacceptable to the individual concerned. Those are the strains that Grampian feels. What will the minister do about it?

Photo of Andy Kerr Andy Kerr Labour

As usual, the member grossly misrepresents the position. I made it clear that no patient would be put in jeopardy in the Argyll and Clyde NHS Board area and that payments would be made in relation to the revenue costs of that health board, but I have not underwritten the on-going deficit that that board has developed over a number of years. I want to ensure that the board can account for that deficit and that it takes proactive, preventive measures to ensure that it does not happen again.

Far from saying that I will underwrite or bail out anybody, I am saying that patients need not worry in that health board area because the bills will be paid and the staff will be there to provide the service. It is appropriate that the Executive should ensure that that happens. The challenge for the health board is to deal with the financial and organisational mismanagement of past years that has caused the current problem. Not until I am satisfied that that matter is resolved will I sign off any financial relationship with Argyll and Clyde NHS Board.

Let us not misrepresent the situation. I have assured patients that the services are available to them and that the nurses and doctors will be there for them when they are needed. However, the health board's challenge is to provide me with a plan that gives me the confidence on behalf of the taxpayer and the patient that the board can deliver in the long term.

Photo of Jackie Baillie Jackie Baillie Labour

I welcome the minister's commitment to protect patients' interests in NHS Argyll and Clyde. However, does he agree that, despite efforts to reduce financial deficits, the projected deficit for NHS Argyll and Clyde for 2007 is £100 million? Does he agree that that perhaps points to an underlying structural problem, which could be resolved in part by the break-up of NHS Argyll and Clyde?

Photo of Andy Kerr Andy Kerr Labour

I am considering those matters just now and I have met the chair and chief executive of that organisation. As members know, in replacing the health board management team in late 2002, the Executive set the health board a difficult task and we should not expect the board to deal with all the problems overnight. However, as I have said on the record previously, if there is a structural problem that suggests to me that the health board cannot meet its service delivery and resource requirements in the future, I need to look at all the options. I do not want to make that decision until all the factual information is available to me and I have had further discussions with those concerned at a local level. The options remain open to me, but it is too early to say which one I will take.