Crisis hit NHS Tayside shows '˜deteriorating' target performance

Lesley McLay.
Lesley McLay.

Urgent action is needed to address NHS Tayside’s worsening performance and financial position amid ongoing changes to its leadership team, says Scotland’s public spending watchdog.

Auditor general for Scotland Caroline Gardner spoke out after a new report noted the struggling health board achieved just seven out of 20 national standards in March 2018 – down from from nine the previous year.

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It is also facing a potential budget deficit of £18.7 million for 2018-19 despite receiving £50.2m of Scottish Government brokerage loans in the last six years.

Audit Scotland also revealed problems with a settlement payment to former chief executive Lesley McLay.

The overall sum she received included more than £64,000 – which equated to six months’ notice – but the report went on to note Ms McLay’s contract had a notice period of three months. The payout also included more than £19,000 in pension contributions that “should not have been made”, it added.

Audit Scotland concluded: “The decision to reach a negotiated settlement with the former chief executive was reasonable, but there were several weaknesses in the settlement process and a lack of good governance.”

Ms Gardner said: “NHS Tayside’s financial position has been unsustainable since 2013 and urgent action is needed to turn around the organisation.”

Of the £50.2m the health board has received in brokerage funds, £45.9m has not yet been repaid to the Scottish Government.

“The board’s worsening financial position has been compounded by the mismanagement of eHealth funding and endowment fund monies in earlier years,” Audit Scotland found.

The Scottish Government was forced to intervene in the running of the board after it emerged cash from public donations had been used to fund new technology. A separate review found NHS Tayside “misrepresented” its financial performance by “holding” £5.3m of government funding for eHealth initiatives.

Health secretary Jeane Freeman’s announcement that outstanding loans to NHS boards will be written off at the end of the year “reduces the pressure” on the board but “does not address the underlying financial problems”, Ms Gardner said.

Overall, Audit Scotland found the board “continued to experience significant cost pressures in 2017-18”, spending rising to over £900m, with staffing, prescribing and eHealth overspends.

Ms Freeman said: “This report refers to the financial year of 2017-18. Since then, a new senior leadership team has been put in place, making significant changes to the running of the board, including strengthened financial management and governance arrangements. Last week, I appointed Grant Archibald as the new permanent chief executive of the board.

“The Scottish Government is continuing to provide specific support to NHS Tayside to help it recover its financial position.”