Debt-ridden health board gets £3m loan

Published on Friday 1 May 2009 19:11

A TROUBLED health board has been given a £3 million long-term loan from the Scottish Government to help pay off its debts.

Health secretary Nicola Sturgeon, who announced the plans for a "brokerage" deal for the Western Isles board last year, yesterday confirmed a financial plan has now been agreed.

Last year, an investigation by the Scottish Parliament's audit committee highlighted weak financial management at NHS Western Isles and singled out a former chief executive and chairman for criticism.

It also highlighted the "unacceptable" situation then of the board having three chief executives – one suspended, one on secondment and one acting – who were costing taxpayers about 300,000 a year.

At the time, Ms Sturgeon rejected calls for a wider inquiry into the board's troubles.

The new deal means the government will cover the board's deficit of 3.097 million to allow it to clear its debt and make repayment in the future. The board will have to repay the cash over six years beginning in 2012 but the agreement effectively gives it a clean slate and allows it to build on an improved performance over the past two years.

Ms Sturgeon said: "NHS Western Isles has already come a long way to turn around its financial situation and we want to give the board a fresh start so that it can lay strong foundations for the future.

"Today's agreement is recognition of the progress that has been made so far and means progress can be made in a manageable way that is fair to the board and ensures patient services will not be affected."

The Scottish Government has previously arranged for NHS Highland officials to help their Western Isles colleagues in areas including human resources, governance and planning.

In a joint statement, John Angus MacKay, the board's chairman, and Gordon Jamieson, its chief executive, said the brokerage deal was a "welcome and significant decision".

They added: "It is important to us financially, as it will help us in the ongoing challenge to balance our books over the coming years in an increasingly tight public sector financial environment. This is also a morale booster for us all."

Alasdair Allan, the Western Isles MSP, said: "Although there have been significant past failings within NHS Western Isles, there has also been a vast improvement in the situation within the organisation, with the books being properly balanced in the past two financial years. It is now clear that the NHS in the Western Isles is working very successfully to turn around its financial position."

Last year's audit committee report singled out for criticism Dick Manson, a former chief executive, and David Currie, a former chairman, who both left the board in 2006.