1. Executive Summary: Key Findings and Recommendations
This Staging Report describes the remit, process, findings and recommendations of the NHS Tayside Assurance and Advisory Group ( AAG) which was established on 29 March 2017. The remit and process of the AAG is described in Section 2 and its membership is listed in Appendix 1.
1.2 NHS Tayside - Financial Position
NHS Tayside has required on-going financial support from the Scottish Government since 2012/13, in order to achieve financial balance. NHS Tayside is presently projecting a requirement for a further £4m of Scottish Government support to achieve financial breakeven in 2017/18. The financial difficulties encountered by NHS Tayside over this period are not new, but the level of challenge has markedly increased. In Section 3 of this Report we describe the historical background and reference to past relevant findings of the Ministerial Task Force (2000) and the Audit Scotland Review of National Health Service Bodies in Tayside (2001).
Key areas of overspend in 2015/16 (including staff costs and primary care prescribing) have persisted into 2016/17. Comparisons have been made with all territorial NHS Boards in Scotland. Alignment of these cost areas with the Scottish average could bring NHS Tayside over time within financial balance and could substantially address the underlying recurring financial deficit.
The financial support - 'brokerage' - required from the Scottish Government in 2015/16 and 2016/17 would have been significantly higher without levels of non-recurring savings and use of deferred expenditure by NHS Tayside. The reliance on non-recurrent savings and deferred expenditure has been noted in a number of recent internal and external audit reports in 2016 and 2017.
On the basis of the evidence and analysis we have at this time, we believe that the £4m of financial break-even support NHS Tayside has projected it will require in 2017/18, is likely to be an underestimate. This projection is reliant on full delivery of projected savings plans. These contain significant elements of risk, which have been recognised by NHS Tayside. Based on the Scottish Government commissioned independent assessment of the status of the current savings plan, undertaken by Ernst and Young (April-June 2017), it appears possible that further financial support may be required in addition to that forecast by NHS Tayside, after adjusting for risks to planned savings and asset disposals in 2017/18.
We examined the comparative position of NHS Tayside with all other Scottish territorial Health Boards. In terms of workforce  , NHS Tayside's total staff complement is high - representing 9.3% of the NHS Scotland total - compared with its NRAC ( NHS Scotland Resource Allocation Committee)  target share of 7.85%. This finding is consistent across most staff groups, clinical and non-clinical, hospital and community based.
A benchmarking review was undertaken recently by NHS Tayside based on information for 2015/16 provided by the NHS Scotland Information Services Division ( ISD). The report compared the cost of service provision within NHS Tayside with the other teaching boards ( NHS Greater Glasgow and Clyde, NHS Grampian and NHS Lothian) and highlighted a number of areas where the operating costs of NHS Tayside were higher than the peer group.
For example, in 2015-16, in terms of financial performance:
- NHS Tayside's costs per in-patient week of £4,677 were 19% higher than the lowest of the teaching boards and 14% above the second highest board
- At 9.7% of NHS Scotland's total spend on energy, NHS Tayside energy cost was 27% higher  than its share of funding, highlighting the challenges regarding operating from many dispersed sites
- Of the four teaching boards, NHS Tayside was the only Board to incur expenditure on primary care prescribing in excess of available resources. Savings of £4m could have been achieved if expenditure had been contained within its NRAC population share of funding.
For comparison, in the same year, in terms of service delivery
- 4 Hour Accident and Emergency (A&E) service performance in NHS Tayside was 98.9%, the best figure of any mainland Board. Overall NHS Scotland performance was 94.1%
- Child and Adolescent Mental Health Services ( CAMHS) - 97.4% of patients in NHS Tayside were seen within 18 weeks in the quarter ending 31 March 2016, against a 90% standard.
- The National Quality Indicator ( NQI) for reduction of total antibiotic prescribing in general practice is a key indicator of best practice. NHS Tayside showed a 71% compliance rate compared to an expected rate of 50%.
Summary: The higher operating cost base in NHS Tayside compared to other territorial Boards in Scotland and configuration of health care services has been highlighted in previous reports  . Unless these challenges are robustly and rapidly addressed they are likely to result in NHS Tayside continuing to commit expenditure higher than its funding allocation.
The higher operating cost base in NHS Tayside compared to other territorial Boards in Scotland and configuration of health care services has been highlighted in previous reports  . Unless these challenges are robustly and rapidly addressed they are likely to result in NHS Tayside continuing to commit expenditure higher than its funding allocation.
1.4 Transformation: Progress and Support
Significant work has already been undertaken by NHS Tayside in partnership, to progress transformational change, recognising the extent of the challenges involved. In particular transformational changes are underway or planned imminently in the following services or activities:
- Mental Health Services
- Shaping Surgical Services
- Older People's Services
- Maternity Services
- Realistic Medicine Framework
- Integrated Clinical Strategy (which is considered in greater detail below)
- Restructuring of Board Committees and Executive Groups
- Prescribing - formulary compliance (new formulary launched April 2017), improved repeat prescribing, quality prescribing visits programme, locality pharmacy teams
In addition: since 2013 to date, NHS Tayside has requested and received assistance from external agencies or individual professionals in the following areas:
- Property disposal
- Capital investment to deliver energy savings
- Financial benchmarking
- Review and development of partnership working
- Workforce and human resources ( HR) practice
- Tailored support: Leadership and subject expertise to support transformation planning, strategic integrated resource allocation and budget planning
- Support of Integrated Joint Board Governance (Perth and Kinross)
- Board effectiveness and organisational culture
- Feedback and complaints review
- Assessment and assurance of prescribing plans
- Key priorities for organisational culture development
Further details of progress and support are provided in Appendix 2, which illustrates the nature and extent of current health service developments in Tayside and the willingness to seek external support and advice.
1.5 Transformation: Strategic and Service Planning
While there has been progress on a number of fronts, on the basis of our present findings, we do not believe that the current Transformation Programme and its underlying plans are sufficiently well developed to tackle the issues outlined above, in order to achieve timely financial balance.
Reflecting a shared vision, it is imperative that a comprehensive strategic planning framework continues to be developed jointly between NHS Tayside and its three Health and Social Care Partnerships ( HSCPs) (Angus, Dundee, Perth and Kinross). We believe that NHS Tayside is fully committed to and working towards realising this ambition. In all of this, a partnership of equals, at all levels, is of paramount importance in relation to truly integrated strategic plans for health and social care in Tayside.
Existing Operational Plans supporting the Transformation Programme are in progress. They require further detailed on-going work to ensure effective delivery against financial efficiencies targets as set out in its six work streams
In terms of future planning, NHS Tayside should continue to collaborate with neighbouring NHS Boards, to ensure that emerging regional working arrangements provide opportunities to transform services across a wider population.
1.6 Governance and Organisational Capacity
We are of the view that an appropriate and adequately resourced governance structure is in place to support the operational work associated with the implementation of the Transformation Programme, including a dedicated Programme Management Office ( PMO) with staff resource allocated against the six key workstreams.  Future allocation of resources towards potential efficiency savings workstreams must clearly map to the scale of the potential savings required and the risks to delivery.
During attendance by the Assurance and Advisory Group ( AAG) at committee meetings, in one-to-one interviews and during site visits, clinicians and support staff expressed clear willingness to contribute more to the work required to assist transformational change.
Consistent concerns were expressed about the need for better internal stakeholder engagement and partnership working. This should take place systematically and at an early enough stage to enable meaningful and timely influence on the future direction of care services. Successful transformational change will pivot on necessary and sufficient staff buy-in throughout NHS Tayside. In order to achieve this, communication and stakeholder engagement plans have been put in place across the workstreams. Going forward, these emerging plans will require further development and refinement.
At strategic level, it is imperative that the requisite skills, expertise and capacity must be identified and actioned by NHS Tayside to support the considerable and complex planning and service redesign associated with the Transformation Programme.
Further work is required on developing robust escalation processes, with clear accountability for under-performance at all levels and with evidence of robust corrective action or challenge where delivery is at risk.
At present there are potential risks relating to the delivery of projected savings. In view of our reservations regarding accountability, escalation and corrective action, we consider it is unlikely that present arrangements will secure effective delivery of savings of the scale and at the pace required. To date, the role of the Programme Management Office has been largely limited to reporting and monitoring progress, with a focus on transactional rather than transformational change. This emphasis must now change. The need for such change has been acknowledged and agreed by the Transformation Programme Board and must now be followed through with resolve and dispatch.
- NHS Tayside has been unable to operate within its financial resources for the last five years (2012/13 to 2016/17). NHS Tayside clearly recognises the extent of the challenge involved and is committed to address this. Much encouraging work is underway in a number of critical areas, but we have not been able to identify compelling evidence of improvement taking place at sufficient scale and pace to provide assurance that NHS Tayside will deliver its projected financial out-turn for the current year 2017/18.
- We have witnessed and commend a clear commitment to improvement in processes and control mechanisms. At this time, we did not find sufficient evidence of progress with the key elements of the Transformation Programme to be confident that NHS Tayside can return to financial balance within the identified five year timescale.
- While there is considerable scope for improvement in both service efficiency and financial position, NHS Tayside clearly acknowledges that it cannot adequately tackle alone the persistent underlying factors contributing to the current pattern of overspend without significant transformational service change. This must continue to occur in equal partnership with the three HSCPs, joint working with the three Local Authorities and effective regional collaboration with other NHS Territorial Boards. Such transformation currently being progressed by the Transformation Programme Board, will require a step change in scale and pace.
- On present evidence, it is likely that it will take a number of years to achieve the level of recurring savings required for sustainable in-year financial balance, without impacting adversely on the quality or safety of patient services.
- As NHS Tayside continues to improve and transform its services, on-going buy-in and empowerment of all staff is essential. Clinical leadership, ownership and support will be key for success - as will meaningful engagement of the people and communities it serves.
1.8 Key Recommendations
Actions for the NHS Tayside Senior Executive Team
1. We recommend that NHS Tayside should take urgent and robust action in order to maximise the likelihood of achieving the planned in-year savings and delivery of NHS Tayside's projected financial outturn for 2017/18.
Detailed action plans must have support from key stakeholders and include anticipated financial impact, identified timetables and milestones. There should be clear trigger points for escalation to ensure swift action when delivery is found to be at risk.
2. Over the next three months, NHS Tayside should subject its financial planning framework to rigorous and comprehensive review. This should help to ensure that projections and targets for future years are based on a thorough service by service understanding of cost drivers, risks and opportunities.
3. Over the next six months , NHS Tayside should continue to work with its partners to agree the content and a realistic timeline for completion of the Integrated Clinical Strategy, already in progress. We would expect that the completed Integrated Clinical Strategy would set out a comprehensive and evidence based case for transformational change. This would build upon the HSCPs' strategic plans for social care, primary healthcare and unscheduled hospital care, taking account of public health imperatives. It should provide a clear strategic direction for acute and community healthcare in Tayside, including the development of Regional Plans.
The Integrated Clinical Strategy should take full account of present and future challenges, including those set out in the National Clinical Strategy, Realistic Medicine and the Health and Social Care Delivery Plan. It should provide concrete and detailed options for long term strategic positioning of NHS Tayside's role within a local and regional setting. We would encourage NHS Tayside to accelerate its work together with HSCPs, Local Authorities, the Third Sector, Universities and other partners.
4. NHS Tayside should undertake an early and comprehensive review of staffing levels across all services and sites, including those delegated to or utilised by HSCPs.  This review should aim to clarify key drivers of NHS Tayside's workforce levels compared to peer Boards and to identify safe options for bringing redesigned services and sites within available resources.
5. In relation to service development, the clear focus on optimal drug prescribing and wastage minimisation should continue unabated.
6. Further and appropriate delegation of decision-making to managers and staff at operational level is required in order to ensure that executive director level capacity is released for strategic development and transformation of services.
Actions for the NHS Tayside Board
7. In order to continue to ensure safe and effective services for the people of Tayside in a challenging and changing environment, the Board must ensure early, meaningful and sustained engagement in partnership with its staff, its stakeholders and moreover the public and political representatives.
8. The Board should build on current restructuring of the senior executive team and recruitment of non-executive members, addressing skill-mix gaps, particularly for effective strategic planning and oversight. It should maximise opportunities for induction and development of non-executive members to ensure robust and effective governance and scrutiny of the executive function of the Board.
9. The Board should ensure that the actions (Actions 1-6) recommended for the senior executive team are rigorously scrutinised and governed to ensure effective and timely delivery. Restructuring of its financial framework control systems must ensure that budgetary control is assured for all its functions (see Action 2 above). In particular, leadership and continuous scrutiny of a very high order will be required for all aspects of strategic planning to deliver sustainable transformation over the next five years.
10. The Board must continue to foster and enable leadership development at all levels. As NHS Tayside moves forward, strong clinical leadership will be essential to realise the ambitions of the Chief Medical Officer's Report on Realistic Medicine and the National Clinical Strategy.
Actions for Scottish Government
11. The Scottish Government should ensure that necessary skills, expertise and support are swiftly made available for NHS Tayside in order to address its significant and longstanding challenges. While assisting the delivery of planned short term in-year savings and projected financial outturn for 2017/18, this support should primarily focus on delivering effective transformational change, including an in-depth comprehensive review of existing plans to return NHS Tayside to sustainable financial balance.
12. Implementation of the recommendations in this report should be closely monitored, in order to realise timely and sustainable transformational change in Tayside.
13. In light of our findings, the Scottish Government should consider the potential impact on NHS Tayside of being required to repay the £33.2m of accumulated financial support which is still outstanding and note the potential need to provide further financial support in future years.
14. Learning opportunities arising from the experience of NHS Tayside should be assimilated for the wider benefit of NHS Scotland. This includes the role and contribution of national services support, on the basis of a 'Once for Scotland' approach - as outlined in the recent Health and Social Care Delivery Plan  (see also Appendix 2).