 Ysbyt yw'r gwaith i ddweud wrth y gynnig o'r ffordd. Dyfwyrdd y ffordd yn y cyfyniadau Pushllideg Llywodraeth remeinidol i dyn nhw yn 2017. Mae'n ddigon i'n ddim oedd chi i'n gweithio i'r bywbeth, oherwydd gofyd i'r mod i'r mod yn先iflaen ydw i'w gweithio i gweithio gael yéu mwynt gwaterfodol. Felly, wrth eich eich hoffi i gŷn di, mae neid yn gweithio i'r mwynt a cherdd o'r newid gyda lwyllydd yndellol. diddiged for this morning's meeting from Alex Neil, we expect that Kenny Gibson might join us who is the committee substitute for the SNP. Item 1 is today to decide whether to take item 4 in private. Does the member agree? Felly, dormant o'r ashsc Dimers also agree to take the work programme that we will consider at our meeting on the 23rd of February in private also. Thank you. Item two. We will now take oral evidence on the Auditor General for Scotland report entitled the 2015-16 audit of NHS Tayside. I welcome to the meeting Paul Grey, director general, health and social care, and chief executive of the NHS in Scotland. I welcome Christine McLaughlin, director of health finance and Fiona McQueen, chief nursing officer of the Scottish Government. Mr Gray does not wish to make an opening statement this morning. Before we move to questions, I will rate—is that correct, Mr Gray? Thank you for your answers, although I would welcome the opportunity near the beginning of the evidence to make a couple of comments on the letter that I submitted. I think that it would be helpful for the committee to have a brief update on the position that is set out there. If you can do that now, then that would be useful. Thank you. When I wrote to the committee on 27 January, I gave a brief outline of the position on NHS Tayside, and I have, as you would expect, continued discussions with the chair and the chief executive. The particular issue that I want to draw to the committee's attention is that Tayside remains committed to delivering its plan this year within the 11.7 million of brokerage that had been afforded to them. However, it is experiencing a bit of a time lag on the necessary culture change to bring about the prescribing savings, and I have agreed to provide support from the Deputy Chief Medical Officer, Dr Gregor Smith. The prescribing savings are generally to be found in general practice, and I want them to have all the support that they can in order to ensure that that is achieved practically and in a way that does not affect patient care. That means that in order to meet the 11.7 million brokerage limit, they will have to adopt some contingencies. That is a sensible thing to do. However, I have asked to meet the chair and the chief executive at the beginning of March, once my colleagues have gone through those contingencies with them, to ensure that none of what they are proposing to do will affect patient care. If I conclude that it would be sensible to advance a small amount of further brokerage, I will do so. I simply thought that it was fair to let the committee know that. I have not decided yet, but I wanted you to be aware that that was my current thinking. That is very useful, Mr Gray. Thank you very much indeed for informing the committee of that meeting and your considered intentions. It leads me on to what I was going to ask to open up questioning initially, and it is about the current financial figures and clarity around that. Can I reiterate the Auditor General's statement that NHS Tayside's finances were the most challenging position that she had seen? The Auditor General also made clear that the efficiency-saving target for NHS Tayside in cash terms was unprecedented across Scotland. Today, we are going to question how we have reached this position and the possible implications for the people who use services in Tayside and your role as a Scottish Government in making sure that that is properly addressed. I would like to start questioning this morning by asking for clarity beyond what you have said on the current financial position at NHS Tayside. I am sure that you have looked at the official report of the meeting that we had with the chief executive, the chair and the finance director in Dundee in December. There were a number of figures there and not too much clarity around them. Can you confirm this morning that the savings that NHS Tayside must make in this in subsequent financial years broken down into efficiency savings and repaying the Scottish Government's financial support, which is also known as brokerage? I will ask Christine McLaughlin to give you the detail of that. The finance director, the figure of £214 million has been quoted. If we start from there, perhaps Christine could explain how that figure has arrived at and any commentary that she would wish to offer on the components. I can start, but please feel free to ask if anything I am saying does not make sense if it is not clear enough. Tayside's plans are right for this current financial year. The position that we have agreed with them is that overall they had a gap between their expenditure programme and their income of just over £58 million. They set themselves a savings target of what they thought was achievable to deliver against that, of £46.75 million. That is just over 6.5 per cent. Slightly above where the average for territorial boards is. Can I clarify that initially? Was their initial savings target £58 million and then reduced to £46 million, is that correct? What they said initially was that in order to balance, they needed to make their system more efficient by £58.4 million. They did not have a plan to deliver all that through savings. In a straightforward example in any other board, they would expect the board to come up with savings of that level. There have been on-going discussions with the board about the extent to which Scottish Government would provide brokerage to them. I am sure that you want to ask questions about brokerage, but brokerage is not of itself an unusual thing for us to do. It is very much about smoothing funding over a number of years with boards if there are particular reasons to do so. We entered into the financial year on a planning assumption, if you can put it that way, of £11.65 million of support that we would provide to Tayside in year, recognising that we did not believe that savings of a magnitude of £58 million were realistic for NHS Tayside. That is where the difference is that that figure is not as such that it slipped. It is that they never had a plan to deliver it. We did as much due diligence on their position as we could to understand what was reasonable. We accepted a position of brokerage in year. The question in year is about the extent to which Tayside can deliver that £46.75 million of savings and the way in which they deliver it and what that means for their position over the next few years. That is the first thing I would say about this current year. The NHS Tayside's own board papers in early December I think quoted that the deficit would run to £18 million rather than £11.65 or £7 million. As all boards I would say this year, boards start with a plan on how they intend to achieve savings. Some of those savings are very clearly identified and will be plans that they have in place over a number of years. Others are very much initial plans of targets that they expect to achieve. We have seen that Tayside, for instance, had a plan to reduce nurse agency costs in year, and they have reduced significantly the agency costs in year. From April to December, compared to the previous period, there is about a £750,000 reduction, but it has not gone as far as the target for the year. If you look at prescribing, as Paul Gray said, the savings that they hoped to make in prescribing, they have not yet been able to make. They are doing the work to put the plans in place, but it is not a simple switch from one product to another. It is truly about getting buy-in support from GP practices to change prescribing patterns. That is the work that we will do some follow-up with them on to see whether there is a way to go further and faster on prescribing savings. The point that we are making is that some areas have progressed, others have not gone as the board had planned, but, like all boards, they have then looked at alternative savings options. The work that Tayside is doing just now in their board papers is about looking at where they could identify substitute savings in year to compensate for that reduction. The point that Paul Gray is making is that we need to see the extent to which those substitute savings and the options within it are the ones that will cover the savings that have not made the targets and whether they are acceptable in terms of the actions that they would take. What you have just said to us is that, before you started talking about prescribing, you talked about the brokerage figures for this year. I am keen to set out at the start of the meeting the savings that NHS Tayside must make in this year but also subsequent financial years broken down into efficiency savings and repaying the loans to the Scottish Government. Do you have that breakdown for us? I can give you it verbally and I am happy to back up everything that I say in writing as well because we have quite simple documentation that can give you that. If I start with the savings, the financial year is a savings that we had agreed £46.75 million, which is about 6.6 per cent of their total funding. As Tayside looked forward for the future years, there are current plans for savings. The next financial year is looking at £45.8 million of savings. I appreciate that those figures might change slightly around the margins if you are looking at, for instance, December board papers because they are really working through the detail of that just now, but the recent figures that Tayside have shared with me is £45.8 million of savings. That is about 6.3 per cent, so quite a similar set of circumstances next financial year to this financial year. The current planning estimates further brokerage from us of £4 million for next year, so Tayside does not see that the total amount that they would need to get back into balance is achievable to turn that around in one year. However, the current plans assume that going into 2018-19 that the board is back in financial balance in year, if you follow me, and then we would put in place a repayment profile for the brokerage that they would have incurred up until that point in time. I will continue to take you through the brokerage assumptions. The number one priority for us is Tayside getting back into sustainable financial balance in a way that keeps that balance with performance and delivery targets. We have not yet pushed them on a precise number in each year for the brokerage repayment. They are illustrating what they think is possible, but we have not yet come to a final decision on the repayment until we are absolutely satisfied in the measures to get them back into balance. However, that being said, the board is planning on four years of repayment of their brokerage, which would be around £35 million. If I can tell you that there are different ways in which they would achieve that position, so the first thing to say is that their planning assumptions on the savings in year for those next four years is just over 5.5 per cent. It is about 5.7 per cent. The first thing that we want to know is the extent to which that is realistic and what we would need to do to deliver that. However, the actual repayment of brokerage itself, there are a few levers that Tayside has, so they have a number of asset sales. One thing that Tayside has is a lot of the state. Much of it is already vacant and on the market. We have worked with Scottish Futures Trust to get a fair assessment of the valuation of those assets, and we would allow Tayside to use those asset sales to partly pay off their brokerage to us. Normally, those sales would come back to Scottish Government and would help towards the overall capital position, but we would allow Tayside to use them to offset some of their brokerage. The second thing that I would say is that it would be familiar with the way in which we fund boards and that there is a funding formula, and as a result of the policy to have boards within 1 per cent of their funding formula, Tayside will receive an additional £8 million next financial year. That £8 million was not something that the board was planning on. It was announced as part of the budget position in December, so that is £8 million each year that the board will receive for which they were not planning. Those two factors together will help to make the notion of repaying over a four-year period more realistic than if they had not been there, but it will be a combination of the board delivering more efficiency savings and using those mechanisms to repay. If I can rewind to the first part of that answer, and I know that you are going to provide us with those that you just committed to on paper, which would be really helpful, but just picking up on what you are saying, I think that we got as far as year 2, which was the £45.8 million, 6.3 per cent for year 2. Is that correct? That would be around 6.3 per cent. After that, are you saying to the committee that you are not keen to press NHS Tayside on how much brokerage it will repay because it has to really work out how much it can save? Yes. Ideally, at this point in time, we would have all of that in place, but because of the scale of the challenge, it is right that we focus first and foremost on getting it back into financial balance. I think that the indicative plan that we have for the next five years feels reasonable, but it is still pretty challenging to deliver that level of savings over that period of time. The board is assuming that in years 2 to 4, they would make savings of £40 million each year to put that in context. Mr Glockham, we discussed that in detail at the committee meeting in December in Dundee. I think that we established then that what was required by NHS Tayside was a detailed plan over the next five years that would identify where the savings were going to come from. I understand that the Scottish Government is leaving the brokerage open because obviously that is about services, but it was our understanding as a committee and we anticipate getting from NHS Tayside towards the end of March. It is a detailed five-year plan, year by year, on where their savings will come from. Is what you are saying today that we have really only so far got as far as year 2 on that plan? No, there is a plan. Within the board's transformational change programme, a finance plan supports that and it delivers against those numbers that I have said. It goes out to 2021-22 and it details the main work streams, so where they expect to get in relation to nurse agency, medical locums, prescribing, where they expect to get to in relation to their asset base. There is a level of detail there that gives me comfort over the five years. All I am saying is that landing on those precise figures over a five-year period of time is a level of accuracy. At this point in time, I feel that we need to do more diligence on it, but there is most certainly a five-year plan in place for Tayside that sees them at the end of that being in balance and having repaid the brokerage to the Scottish Government. We all understand on this committee the areas of problems and where they are aiming to make cost efficiencies from agency costs, from prescribing costs, but what we were looking for was more detail. Are you saying that that detailed plan, year by year over the next five years from NHS Tayside, is that kind of detail not possible? No, I think that it is just that it is more detailed in the earlier years, and that is not unlike the situation in other boards. There is a very detailed plan that gives me assurance about next financial year. The savings in the future years are predicated on continuing with those types of directories. There is a plan there. I think that the latter three years are less detailed, but they are very much about continuing with delivery of the transformational change programme. The other thing that I would say is that by the end of March we will have the local delivery plan for NHS Tayside, as we would do for all of the boards, and that is where I expect to see the real detail on that coming through. That is a document that we have asked for in the early site of the draft financial plan by the end of February and the full local delivery plan by the end of March. That is where I would really like to see all of the further detail in their plan. You did say there that the Scottish Government has agreed with NHS Tayside that the money that they will release from capital receipts, from sale of their assets, will go towards paying back brokerage now. That is a non-recurring saving, which NHS Tayside has been very reliant on. Does that mean, in the discussions that you have had and the agreement that you have reached with them, that the general savings that they have to make will all come from recurring savings? The first answer is that, in relation to those asset sales, Tayside, over a number of years, has relied on that non-recurring mean through asset sales. That will obviously only take you so far. Somewhere between £10 million and £15 million of future asset sales that are planned over that five-year period have been revised to be prudent estimates for Tayside. You are right in that we would then be looking for savings to be genuine efficiencies in the system. NHS Tayside right now is running at a ratio of about 60 to 40, so 60 per cent has been non-recurrent. Over the five years, NHS Tayside plans to get them back into a situation of 60 per cent recurring by 2021. NHS Tayside is looking to get that balance shifting, but it is not a situation of overall recurrence of all of its savings. We would not expect any board to have all of its savings recurring. It is not being the way that boards have operated, but it is one-off measures that it can take in any system. However, getting back into that balance of 60 per cent recurring would feel a much healthier place for NHS Tayside to be. I do have that level of detail and that level of assurance from the planning that has been done so far in NHS Tayside. I was interested and reassured to a point that the Scottish Government is happy with the way that planning is going. You certainly sound a lot more reassured than the Auditor General did in her report. Can I just ask about the £8 million that you spoke about just now when Paul Gray said in his submission to the committee that it is part of the Enrack funding to take the board within the 1 per cent parity? Would they not have been getting that anyway to take them within the 1 per cent? I will go briefly and then Christina will come in. They were not anticipating it, so the point is that they had done their planning up to that point, not anticipating receiving the £8 million. That is £8 million of additional flexibility that they now have. Therefore, we would expect that they would give priority to using that £8 million in ways that either defray any brokerage that they have or meet other pressures in the system, so it is £8 million more than they were expecting. The £8 million took them to the target of 1 per cent from parity. If they did not get the £8 million, they would not have been within the 1 per cent. Is that correct? Absolutely right. I just want to make a point about Paul Gray in his opening statement. You said about the not meeting the prescribing savings. I think that it is really important that NHS Tayside is fronting up and saying that we are trying and we are not quite getting there. Not to say that that has been missing in the past, but it is really important to get to the stage where we want them to get to is to be honest about how they are going to get there. When we were in Dundee in December, as the convener has already mentioned, we talked about the transformation five-year plan. We have already touched on that just now. The delivery plan, the financial plan—there are quite a few plans. Christine McLaughlin said that the draft financial plan is coming to you at the end of February and the operational plan is at the end of March. How can you be absolutely sure at this point without having seen that detail that things are going the way that you want them to go? That is partly judgment as well. As you would expect myself and other members of the Scottish Government have been working closely with Tayside over this year and going into a lot more detail than we would with other boards. I am looking for assurance that the components are in place that you would expect to see. For things such as run rates on monthly expenditure, are they going in the right direction? It is those types of things that give a level of assurance. However, as with any other part of the NHS, there are other pressures that come into a system that can compensate for something that is going in the right direction. It is trying to understand the overall position within Tayside and the extent to which it is able to keep going with the total programme of which there are lots of different components in that plan. While I am saying that we will get the detailed financial plans in February, we already have in front of me their transformational change plan and operational plan that supports it, which has detail on the five years. The question is the extent to which the plans are realistic and achievable given that it is a very large comprehensive plan over a number of different areas. However, if you step back and look at the overall operating model in the cost space, and I know that others have mentioned this in previous discussions with you about Tayside, there are in some particular areas of cost that expenditure is higher than in other parts of the system. In relation to their size, it would suggest that it is reasonable to assume that they could come back into line with the average across other territorial boards without having a detrimental impact on their service. However, those things need time to work through how you implement them in a logical manner that maintains performance. That is what our focus has been on as we go through it. However, there are a number of different metrics that Tayside has looked at in their benchmarking to give clear indication of a cost space that is higher than other boards. Just to touch on that subject, the cost space is higher and we have looked at the prescribing in the staff numbers and the agency nurses. Why did we get to that position if they knew that the costs were higher than other boards? How are we here now? The point about benchmarking is to bring out the comparators. There are some cost variations that are reasonable. A rural board will have a different set of cost pressures in some areas from an urban or city-based board. Tayside has designed their services in particular ways, so the way that they have designed their service around A&E, for example, is producing very high performance indeed, but that comes with a cost. The point for us is not simply to jump to the conclusion that every time someone's costs are higher than someone else's that the one whose eye is wrong. However, in the case of Tayside, there are some elements—we have spoken about the use of agency staff—where we believe that that level of being out of alignment is sufficiently significant to be worth paying attention to, similarly on prescribing. NHS Tayside's current leadership having taken a really good hard look at the way that their budgets were being set up and delivered has brought to the surface some issues that the committee is already aware of around asset sales and so forth, which really caused them to think very hard about the way in which they were delivering services. What we are doing through our overall approach to efficiency is ensuring that all boards not only have access to and sight of that information about benchmarking, but that, where boards are outliers, they are looking carefully at those areas to determine whether they ought to be bringing them more within the norms. That is what Tayside is doing. I think that that is the right approach. I completely take your point about rural vs city health boards, and nobody is saying that they have to run in exactly the same way that it would be impossible. However, to say that, just because one has higher costs that that might be the wrong way to run things, surely the alarm bells start ringing when you need to get bailed out by the Scottish Government in consecutive years time after time. Just because their costs are higher, you are right. It does not mean that the service that they are providing is the wrong one. Considering that the Scottish Government has provided so much financial support to NHS Highland, does that mean that other places in the Scottish Government's budget have missed out? Where would that money have been spent otherwise? I said that the use of brokerages, the way of smoothing out funding, is something that we have used over a number of years. We do factor in to our budget planning, an element of support, and that is often two ways. It is board repaying support as well as receiving support. The parameters in which we are working are ones that are within our planning assumptions. In short, brokerage is something that is fully managed within the health budget. As you said, it is completely the right approach. The Scottish Government takes the opinion that the brokerage can only be paid once NHS Tayside is, and I use the term financially sustainable. What does financially sustainable look like? Is it breaking even? It means that it can break even and deliver the efficiency savings year on year without recourse to further brokerage and maintain the appropriate levels of service and delivery. Would you take the approach that it would repay or achieve the efficiency savings and then start to repay the brokerage, or would you do both at the same time? Obviously, we want it to be affordable and we want to make sure that there is no diminution of services to the people who are using it. I would expect—this is what I would expect—that I am not giving you an absolute commitment and that this is what will happen, that the trajectory of repayment of brokerage would grow over time. In other words, I would not expect to say that, if you are going to break even in two years' time, there will be a flat rate return or you will have to repay it all in one year. I would expect us to agree a trajectory. Some of that would be informed by the likely timing of asset sales, as Christine McLaughlin has said. What we are seeking to do here is to be as flexible as we can to make sure that we do not implement or impose a transformation plan or a recovery plan that simply imposes further burdens on Tayside and makes it harder. We received oral evidence from NHS Tayside saying that we will be back in financial balance within five years of our five-year plan, but it seems to be what you are saying to us today is that you expect us to be back in financial balance at the end of year 1. We have been having discussions about what is reasonable with Tayside. At the starting point, within five years, we wanted to understand the extent to which that was about being back in financial balance in a year and about the extent to which brokerage was repaid. Taking into account all those factors on asset sales, the additional enwack funding and the indicative programme that we are working on is a gradual repayment. In 2018-19, it would be less than £2 million, but it would just start that repayment. You will go back to your early point that it is a mix of delivering efficiency savings and starting to repay. My caution is that we need to understand where Tayside and the assumptions that they are making are reasonable, but their indicative position just now goes from £1.6 million up to nearly £12 million in 2020. There is a range in there that is largely back-ended to get back to repayment. I have been challenging to the board to come up with something that is as early as possible, but I am trying to give that balance so that what is not helpful for any of us is to agree something that is beyond what the board can deliver and then need to provide more brokerage, so we would rather try to get it right just now. However, there is an indicative plan of a repayment that would see it phase and be back-ended towards the end of the five years. Do you understand that you are really pushing, as a Scottish Government, to have them back in financial health, even by the end of year 2? That is the position that I am in with Tayside just now—we are working on the extent to which it is potential for them to be back in balance in 2018-19 and to start to repay brokerage. NHS Tayside said to us that the Scottish Government had agreed that its five-year plan is a credible plan and that it is happy to support it. Is that correct? It is continuing to develop the financial side of that repayment. If you take into account the fact that, in each of the next four years, it will have £8 million more enrack funding in itself as £32 million over the four years that was not in the previous plan, it will not be sorted out by the end of year 2, though, and it is saying that we need five years to sort that out. They are saying that they need five years to fully implement their transformational change programme. It is absolutely not in doubt that it is a five-year programme. My challenge with them is the extent to which they can be able to live within their means and at what point they can do that. Clearly, my preference would be for that to be as early as it possibly can be. Much of what you have said to us this morning, Mr McLaughlin, has been—correct me if I am wrong— predicated on the information that you are getting from NHS Tayside and what they are saying to you about what is possible and what is not, what their plans are and what they are doing. Have you and the Scottish Government carried out your own evaluation to ensure that the NHS Tayside plan will not detrimentally affect services to patients? The short answer, convener, is yes. One evidence of that is the fact that I have concluded that I want to meet the chair and the chief executive at the beginning of March to get that further level of assurance. We are not simply taking paper copies of plans, reading them and saying that that will do. Our Christine is in regular contact and is in Tayside from time to time. John Conachan, our chief operating officer, is also not just in contact, but there. John Conachan is there to help them? No, sorry, convener. What I mean is that John Conachan goes to Tayside to see what is happening on the ground as opposed to simply receiving assurances. That is normal when we are providing tailored support to boards as we are to Tayside. We are treading that line between having confidence in the senior leadership of Tayside, which is right and appropriate for us to do, and also assuring ourselves. As accountable officer for the whole of the budget, I need that assurance that what they are doing is credible and soundly based. I think that we are seeking to adopt that balance. Tayside is right to say that we have confidence in what they have produced so far. That is absolutely right. If we did not have confidence, I would be sitting here with a different narrative for you, but we still want to build that confidence further, because what they are seeking to do is not straightforward. Transformation will change if it was easy, we would all have done it by now. What they are being asked to do and what they are trying to do rightly is not straightforward. Mr Gray, is NHS Tayside the only NHS board in Scotland in debt to the Scottish Government? No, it is not, and Christine Cane can give you the details on that. This financial year, we have three boards receiving brokerage. We have Tayside, as we have discussed, Ayrshire and Arran. The current plan is around £11 million brokerage for Ayrshire and Arran, and the current plan is £4.8 million brokerage. We are going through similar processes with those boards. The difference is clearly that the Tayside position has been one that has been on-going for a number of years. For those two other boards, this is the first year of receiving financial brokerage. We are working through that next five years with those boards. NHS Tayside is the only board that has had to come back year on year for brokerage, and it has the highest debt to the Scottish Government. Is that right? That is correct. In the past, we have had other boards that have had multiple years of brokerage that has been repaid. It is a model that has worked in the past, but if I can confirm, the cumulative outstanding brokerage is now £67.9 million at the end of this year. You are aware of the situation with NHS 24, where there is outstanding brokerage. That is cumulative across the boards. That is correct. With NHS Tayside's total being £36 million, is that right? That is based on the £11.7 million this year, which would be £31.5 million in total. I can provide all that for you so that you can see the detail. There is a discrepancy between the £31.5 million and the £36 million that John Connell said that he thought would be owed. The difference is the extent to which additional brokerage is next for another two years. The board is planning on £4 million of additional brokerage next for another two years, so that is the difference. Based on that total plan by next year, there would be another £4 million. What would be the implications of waiving the brokerage? Brokerage is a mechanism that we have put in place for the NHS to smooth and to recognise the fact that it can be quite challenging for any large organisation to land on a balanced position in every financial year. Our approach has been that it is about smoothing and, therefore, it is recovered at a later date. There have been a couple of instances in the past for, particularly, some of the island boards where we have not sought to recover funds. What I would say is that they have been much smaller in value and related to genuine one-off issues, such as very high-cost patients being dealt with off-island. The set of circumstances in Tayside are very much about issues that feel like their responsibility and accountability of NHS Tayside. That is why we started with the approach of looking to have that smooth over a period of time of the board and the board repay. Is it something that the Scottish Government would consider, given that it is quite a serious situation? I suppose that what I would remind the committee of is the concession that we have already made to Tayside, in which the asset sales will not be returned to central funds. We could take their asset sales back and then not ask them to defray the brokerage, but it seems more straightforward and, frankly, more transparent to make that concession to make it visible and to be a way of supporting them. However, from my perspective, I would want boards to understand generally that, where we provide brokerage, we expect it to be returned. It is part of prudent financial management. We are not going to let a board go to the wall simply to prove a point about their financial management, but nor are we going to allow them to get into a position where they can simply assume that there will be a central recovery fund of some kind simply because there is not and because we plan on the basis of spending that money. So it has been done before. It is not something that you would want or seek, but you are saying that it is not off the table. I think that I have made clear that we have already made a concession to Tayside, which I think is an appropriate concession. From my perspective, as accountable officer, I would not at this time wish to go further if circumstances arose that caused me to reconsider. I do not think that one ever says never, but I think that I am drawing a very clear line that it is not my expectation. On asset sales that we have brought us up to date this morning and explained that a concession has been made not to return those sales to central funds, in December we explored the issue with the witnesses. The savings that we are going to be around is about £7.6 million, which I think is lower than the figure that Christine McLaughlin referred to today. Our concern has been that they are not having a lot of success with the properties that they are trying to dispose of. Does Christine McLaughlin have an update on any sales that have been made since December? I can give you an update and I can send you Tayside's own detail of the status of all their sales, because that is what I look for, not just a number, but what is that made up of and where are the risks? There are a number of properties. In any sale, there is an extent to which there is the value that sits on your books and there is the potential for profit. The uncertainty that I do not think that any board can give with absolute guarantee is the extent to which there is any profit on sale. The schedule that we have of a number of properties adds up to 30 sites in total, so there is a lot in there in their plans. I am basing what I have said based on the current book values and estimates on profits over that period of time, but I fully accept that there is a range in that. There is a range in terms of the absolute value and the timing of sales. It is not uncommon sometimes for properties to be in the market for a number of years before they are sold and often different agreements about even in a sale when they realise the return on that. However, there is a level of confidence that I take also from having an organisation like Scottish Futures Trust reviewing the reasonableness of the plans within Tayside and that they have given us that assurance. Lindsay Bedford, the director of finance, told us in his evidence that they were looking to dispose of up to 14 properties by the end of March. Given that we are now into February, do you have any idea given that you have up-to-date lists if they have managed to sell any of those properties since we were told this in December? It seems to me that it is to get an up-to-date position from Tayside and come back to you, but the information that is in front of me would say that there are a number of properties currently under offer and a number sold, so I can get an up-to-date position from Tayside and give you exactly where they are and what the values are. There is nothing that I am aware of that is a further risk to their year-end position based on asset sales at this point in time. You are aware that 13 of the properties had been on the market for more than a year at that time and three had been on the market for more than four years. So, although it sounds like a generous concession to make in terms of asset sales return, not return to central funds, we are not really hearing that any properties are being disposed of. In fact, the one offer that had been received was considerably below market value, so what confidence are we to take from this minimal update today? I think that I would say two things to you. One is that this is partly about market forces and the sales value that they will get, so what I am looking for is a reasonable estimate that the board is making. It has significantly revised down the estimates on asset sales since 2014-15, and the values that it had previously were much higher than they are currently estimating because they have tried to be prudent, but clearly that is the issue about the timing of repayment of brokerage that we want to link it to the actual sales being realised. I think that you are correct to flag that there are some difficult sites in the board's geographical area that have been on the market for some time, but they are still actively pursuing sales on those sites. There are a number that are under offer, but I am happy to give you further detail on that. Are those all vacant buildings or are any of those properties currently in use? The ones that we are talking about just now are all vacant buildings or land sales. I do not think that we have been given a detailed schedule. Perhaps you could provide that to the committee? I will work with the board because it will be there in detail about where they are with it, but I will give you some information from the reviews that we have done on their asset position. Are you able to date to give us an up-to-date figure on what the current estimate on expected receipts is? Has that changed since we met the board? I am not aware of anything that has significantly changed the position on receipts, but I can confirm that. There is nothing that has been flagged to me by the board that is a further risk to their year-end position, as I would say right now in terms of their planning for 2016-17. The point that we are trying to make is more about the potential for the future sales over the next 45 years. As I said, I spoke to the chair and the chief executive yesterday and asset sales were not among the issues that they raised with me, so I know that that is a bit of a negative resolution. They did raise other issues that were causing them concern, principally pharmacy. I would have expected had asset sales been a concern, they would have raised them and they did not. I support what Christine McLaughlin is saying. At present, we have no evidence to suggest that there will be a problem with asset sales this year, to the extent that they are already planning to make them. I realise your concern about the concession, but it is not a one-off. The concession that we have given to Tayside applies for the period of the repayment of brokerage, so, if they sell properties in five years' time, they will still get the benefit from them. What will be the other issues that will be raised apart from pharmacy, Mr Gray? The issue of what contingency they might then deploy—and, of course, one of the contingencies aboard can deploy—would be to slow down the rate of treating people in some areas, for example. That is what I want to discuss with them, whether and how they will deploy some of those contingencies. There might be some that are appropriate and some that are not, and I just want to be sure about that. Does that mean that they are no longer waiting lists? Well, yes. It would mean that somebody who might have been treated at the end of March might not be treated until April. That potentially would mean that there would be more breaches of the legal treatment guarantee time? Well, not necessarily. If someone was due to be treated within six weeks and it was moved out to A, that still would not breach the guarantee. That is the sort of thing that I want to discuss with them in more detail when they have worked that through. I do not want to speculate here because I have given them the opportunity to go away and consider it and I want to give them that space to do so and to come back to me at the beginning of March, as we have agreed. Colin Beattie Mr Gray, during our evidence-taking in December, we received some fairly damning written submissions. I will quote from them. This is the Royal College of Nursing. A lack of long-term planning and oversight leading to financial crises, the culture within NHS Tayside has tended to be top down and divisive. The management has been bullying towards members of staff, a breakdown between management and staff working in partnership, a vicious circle of disengagement, distrust and disempowerment. It does not sound very good. Is there not clearly evidence of mismanagement and fiscal irresponsibility within NHS Tayside? Is the current team there capable of affecting the cultural change that you are expecting? It seems that there is not a lot of work here to be done. I do not see historically, after five years of support from the Scottish Government by way of brokerage, where still seeking solutions. Is there not a message there? As I have said, we are providing tailored support to NHS Tayside. I have said it this morning, and I repeat where my position to be is that I did not have confidence in the leadership of NHS Tayside. I would be having a different conversation with the committee this morning. I was disappointed to see those submissions. I entirely respect the right of those organisations to put them forward. I was at the NHS Tayside annual review in 2015, when industrial relations were at a low point. That was widely understood and acknowledged. We provided considerable support to Tayside. Norman Provern of the Royal College of Nursing was instrumental in supporting the development of a better culture between the staff side and the management side of the area partnership forum. When I was at the annual review in 2016 with Maureen Watt, the area partnership forum meeting, which is routinely part of the annual review, was a completely different place and a much better atmosphere. The employee director said that there had been considerable improvement, and it was frankly detectable in the room. I spoke to a number of the staff side representatives informally afterwards and was encouraged by what I heard. I think that the RCN material that they put forward was based on a survey taken early on in that process of improving relationships in Tayside. I understand that there has been further work since that submission and that that trajectory of improvement continues. I am not claiming that the relationship between the staff side and the management side in Tayside is absolutely perfect. It is not. They all acknowledge that. I think that there has been improvement and I think that that improvement is being sustained. I think that that has required considerable effort from both the management side and the staff side, and I am assured that that is continuing. Do you consider, given the evidence in front of this committee of the way that the finances have been handled and the way that the situations have been managed, are they up to the job? Have they not already proven that they cannot do it? No, they have not. What they have done is to make what John Connell and Leslie McLean and others have done transparent some issues that were in the accounts. The accounts were given an unqualified rating each year, so they have not had qualified accounts. I believe that the actions that they have taken, particularly around some assumptions that were made around two asset sales that were purported or two assets that were purported, were £22 million and had to be written down, which was quite a big hit on the books. I think that the way that they have tackled those and been transparent about them has actually been the right approach. My concern, Mr Beattie, is very fair of you to raise those points. I do not object to them at all, but my concern is that I would not like a message to go around health boards that being transparent is somehow going to get them into more bother than being not transparent. I am very much promoting transparency here, and I believe that what Tay said has sought to do is to be transparent. That probably means that more of their problems become visible, but that is what transparency is about. In any functioning health service in the developed world, the more transparent you are, the more readily you fix problems and the more readily you improve. Transparency is to be welcomed in them, but this is not about a box ticking exercise and making sure that your accounts are right. There is more to it than this. There is quality of management and the fact that over a period of a number of years they have failed to make the books balance. There are so many issues within this. We are talking about higher costs in almost every area at one point compared to other health boards. How have they allowed it to get into that sort of situation? Surely they knew about this. They have had their cap out asking the Government to put money in now for some time. Not long after the chief executive was appointed, Leslie McClee, she and I had a discussion about her concerns about the state of the finances, and she then undertook a number of steps, including external support and review. Those things take time. They are also working on pharmacy, on culture change. That takes time. What I am trying to do and seeking to convey to the committee today is to be flexible about the brokerage and flexible about the repayment of it so that we do not simply load further pressure on to them to make it harder to institute the recovery that they need to make. I believe that they are taking this very seriously. Indeed, we are putting in considerable support. I believe that Tayside has, as we have said, a plan that is so far credible. In the absence of all those things, of course, I would not have confidence in management, but in the presence of them, I think that I am entitled to do so. Given the fact that the management are going to have to deliver some fairly eye-watering savings over the next few years, and given the past history where the savings that they have achieved have been such a high-proportion non-recurring, it really is a big worry. Their past history has not indicated that they can deliver why suddenly are they going to transform themselves and be able to deliver over the next few years? Because, unlike in the past, I am seeing now trajectories where there is improvement. I think that that is the difference. I think that that is the key difference. If we were simply living on a further set of promises, I would be deeply concerned. On the staffing, we are seeing improvement. We are seeing them not just hoping that they might be able to do something about pharmacy costs, but when their encountering difficulties are coming and asking for help with that, that, to me, is the right approach. That is what I am encouraging boards to do, not to become isolated. It is an act of leadership to accept that you need help with something, rather than just to battle on, hopefully, in anticipation of achieving a result. It seems to have taken them an awful long time to get around to that. On to something that Michael Lennon was talking about. There are a number of properties out there that are empty. When we took evidence previously, as it was March 2016, there was 24, I think. I raised the question at the evidence session about how much it was costing actually to secure those properties. I wonder if I might get an update on that, because there is a real cost to them. The properties must be getting guarded and secured. There must be a cost in maintaining them to some minimal extent. Do we have a figure for that? We will certainly provide that in the written update, Mr Beattie. Do you have anything that you want to add to that? I do not have it to hand, but I can give you the information not on the status of the building, the ones that are vacant, the ones that are purely land sales and the costs of maintenance, but I do not have that to hand. I will send that to you. In response to Colin Beattie's question about your confidence in the management team and the board, you said to us already this morning that you are having to go back in a couple of weeks time because you are saying that the trajectories are good, but they are not going to meet their targets this year. How can you have that sustained confidence if already they are coming back to you and saying that we are having problems meeting targets for this year? I want to put this carefully, because I completely understand the importance that the committee attaches to scrutinising this appropriately. However, I suspect that if you scrutinised any board's five-year plan once every couple of months, you would find that it had bumps in it. It would not all just go in a positive direction. Most of it would and some of it would not, and then there would be contingency and recovery. That is the way any health system is managed. What gives me confidence is the existence of a plan, the positive trajectories that we are already seeing and the fact that the chair and the chief executive are openly willing to discuss the areas where they need further help? You are starting to see positive trajectories, despite the fact that you are going back up there in a couple of weeks time that they are not meeting current targets. What about the last three or four years where this situation has been allowed to escalate? What has been your role in that over the past three or four years? My role has been to support the chief executive with others in ensuring that she had the necessary resources to review the accounts. We provided external support through Alan Goll, who is now working full-time for the board. My approach has been to ensure that they have had access to our finance director to John Conachyn as the chief operating officer and to ensure that they produced a plan that we could then review. They have a transformational plan, an operational delivery plan and all the things that they did not have before. They have them now. It has been in the past six months to a year. It was important for the chief executive to understand the scale and nature of the problem that she was dealing with before she tried to produce a plan to deal with it. She did not understand before that point. That is why she had the external support. I am not suggesting that she cannot understand things. What I am suggesting—I think that your question is a fair one—is that, as I would have done when faced with an issue, I wanted to make sure that I had got to the bottom of it before trying to develop a plan to resolve it, otherwise you end up trying to resolve something that you incompletely understand. What I am trying to get at is that your involvement—correct me if I am wrong—seems to have been ramped up over the past six months to a year to help NHS Tayside to get out of this situation. However, this is the fourth year that they have had to come to the Scottish Government for brokerage. The Scottish Government was aware of the escalating situation at NHS Tayside, so should there not have been much closer involvement at an earlier stage so that we do not get to the situation, Mr Gray, my benchmark for this is that there is no effect to patient services and to jobs in Tayside. What we have already heard today is that there is going to be an effect to patient services because you admitted that waiting lists are going to lengthen. What was the Scottish Government's role in the past three or four years in preventing this? First of all, I have said that one of the contingencies that they could adopt might be to do that. I did not say that they would, and that is why I have said that I want to discuss with them what the options are and to decide what support we should provide. Christine Can give you more detail on some of the support that has been provided, but we have a ladder of escalation. As I have explained, the ramping up is moving up the ladder of escalation. That is why we have it, and that is what we use it for. We have not simply sat by and waited, but when we had clear indications that more support was needed, we have provided that. For example, we provided support some time ago from the chief medical officer when there was a concern over A&E and other aspects within nine wells. The chief nursing officer has been providing support. I do not want to go into some kind of self-justifying speech. I understand the question that you are asking. My response is that we have used our ladder of escalation, and when you move up a step, that is what we have done. I think that there are sufficient financial expertise in the leadership team. I am aware that John Connell said that the finance director had been appointed recently, but the finance director has been in the organisation for 33 years. Do you think that some fresh financial eyes are needed there? I think that we have provided external support on finance, and if Tayside requires more external support, we will provide it. However, they appointed their finance director through fair and open competition. He must therefore be judged to be the right person for the job. I discussed with the Auditor General, as you probably would expect me to do, whether she had any concerns about the capability of the leadership in NHS Tayside based on her findings, and she was able to give me the assurance that she did not. I do not just walk past those things and hope for the best, I take it seriously and I have done so. You have confidence in the whole team that they will reach that financial sustainability by the end of year 2, as Mrs McLaughlin outlined? I have confidence that they are taking the steps to do so. I think that, as Mrs McLaughlin has outlined, we are not going to press them to do something unsustainable simply for the sake of meeting a particular point in time. I believe that, at the moment, they are on a trajectory to meet financial sustainability within year 2 and to repay brokerage by the end of year 5 while remaining financially sustainable. However, if, in the course of our further conversations with them, or indeed in the course of time that passes later, something unexpected happens, we will adjust accordingly. I am not going to say that what we agree on the 31st of March is absolutely going to be what happens in every detail five years down the line. I do not know any health system that could say that. However, they are the right team for the job. I would like to explore a couple of issues arising from the last few questions. The external auditor of NHS Tayside said that, as far as I am aware, no one at the board has been held to account for anything that has happened in the past. When we heard from NHS Tayside, they were clear that they felt that the current situation arose because of a substantial number of years of operational models that did not recognise the true financial situation that NHS Tayside was in. They balanced the books in a way that meant that they were in financial balance when, in fact, it was living out with its means. Do you consider that any senior staff have been sufficiently held to account for those failings? Well, I am holding the chair and the chief executive to account, as you would expect at the present, but it is a bit more difficult to comment on how one might hold to account people who are not there. Where have they gone? Well, the current chief executive took up post two and a half years ago. But he has been working in a very senior role prior to that with NHS Tayside now. As chief operating officer, I would not hold my chief operating officer to account for the financial performance of the NHS. And the finance director, who had been there for 33 years? Well, he was not the finance director until about six months ago. So he was not accountable until six months ago? Well, no, simply. I am the accountable officer for the NHS and I have been since December 2013. So are you accountable for the situation that NHS Tayside is in, Mr Gray? I am accountable for the whole of the NHS budget and I have said that to this committee before and I continue to be so. So are you comfortable that whoever is accountable for the situation that NHS Tayside finds itself in has been sufficiently held to account? Or are you unable to answer the question? I am unable to answer the question, Mr Kerr, because I can hold to account those who are currently there. But you have been looking after this since 2013. So what has happened to the people who were on the ground since 2013? Where are they? Do you mean the chief executive? I mean the people who are accountable in your view for the situation that NHS Tayside finds itself in. So the chief executive is the current accountable officer, as I am the current accountable officer for the NHS health budget as a whole. The current chief executive took up post after I took up post, so that means that it must have been in 2014, and has since then worked to resolve the issues that are described in the accounts because of certain accounting treatment that did not fully recognise. For example, as I have said, there was £22 million of assets that were never going to realise £22 million, but on the other hand the accounts, as I have also said, were unqualified every year. But somebody dropped the ball at some point before the current management were in place. Do you accept that? I am thinking about your question, Mr Kerr, and I think that it is a fair question. Why am I looking a bit reluctant here? I think that people, if they are to be held to account, want to be allowed to answer for themselves. If the committee feels that there is someone who should be held to account, then they would need to ask to see them, I suppose. That is a fair answer, Mr Kerr. I do accept what you are saying to me. However, I would like to look at the current management, because we heard at the session in Dundee that there was an element of performance-related pay that was made to a number of senior individuals. I recall questioning that fairly closely. Given some of the issues that have been raised and some of the challenges going forward, do you have a view on performance-related pay having been paid to the current senior staff? As you would expect before the committee hearing, I discussed that with my workforce director, who happens to be behind us at the moment. I would like to write to the committee about the way in which the pay system in the NHS operates, but I will seek to answer your direct question. Every person in the NHS in Scotland could have access to two things—an increment, so an annual increment, and a performance bonus. Performance bonuses are not currently paid and have not been paid for some time, so they are not in payment. In order to receive an increment, you need to have your performance at a level that is at least satisfactory. That is what happened to the two individuals. I think that you questioned that. That is to say the chief executive and the finance director. Their performance was judged by the board to be satisfactory, and they received a pay increment. I forgive my clarification, but do you sit on that board? Who makes that judgment? The judgment is made by the board. Can you help me with that constitution? Who constitutes that board? There is a remuneration committee at the health board. The finance director will be appraised by the chief executive, and the chief executive will be appraised by the chair. The finance director is appraised by the chief executive of NHS Tayside. That is correct. The chief executive of NHS Tayside is appraised by the chair of NHS Tayside. That is correct. On whether their performance has been satisfactory. That is correct. Do you consider that, given that you have been providing the words of the user, tailored support to the board for some time, and we will continue to do so? We heard from Mr Beattie that, in our last session, there were a number of issues raised in terms of culture and relations. Do you consider that satisfactory? You have been very fair, Mr Kerr, in your acceptance of my previous response about holding to account. I hope that you will be fair again. I am sure that you will be. I do not conduct performance appraisals in public. I do not think that people would expect me to do so. Tell me something. Just for my interest, did any of the nursing staff get any form of performance-related pay? Or is it just the senior staff who are eligible for satisfactory uplift? Well, the senior staff are part of the senior managers pay cohort. The nursing staff are part of a different pay cohort, but the chief nursing officer could assist you with that. The director of nursing would be in the senior management cohort, so the director of nursing would be subject to the same performance assessment as the other executives. Therefore, nurses automatically have their increment when they are on a pay scale within the NHS, rather than having it through performance. All of the nurses who were not at the top of their pay scale would automatically receive an increment and progress up the pay scale. The nurses who are on executive pay scale, and certainly the director of nursing would be on that, would be subject to the same performance appraisal system as the other executives. Professor Connell, the chair of NHS Tayside, told us in December that the senior staff, their performance payments, are subject to approval of a national performance management committee. Who sits on that committee? I am not going to do that from memory, but I will give you the information. If you are asking me if I do, then the answer is no, I don't. Okay. He also said that there will be a ward as an uplift in their pay, which is reviewed and approved centrally by the ministerial committee. Are you aware if a minister sits on that committee? No, I am not, to be honest. I will need to write to you about that. I am not aware of pay of this nature going to ministers. Ministers set the pay policy, but they do not make judgments on individual salaries. I am just curious. We have a huge financial deficit at NHS Tayside. We have a financial crisis. I cannot think of another word for it. We have senior managers who have been responsible for that, who have been awarded pay, and Colin Beattie said, for an acceptable performance, not for an outstanding performance, because the finances are in crisis, but they have awarded each other performance bonuses. That has been signed off by a committee, presumably in Edinburgh, but we do not really know who that has been signed off for. John Connell said to himself that it is approved centrally by the ministerial committee, which suggests to me that a minister of government sits on the committee. However, if you can clarify that for us, it is not a ministerial committee, it is the national performance management committee, and I do want to clarify that they were not awarded performance bonuses. There are no performance bonuses in payment in the NHS in Scotland. Whatever the payments were called, they totaled £87,000 to NHS Tayside from their budget. That was the evidence that John Connell gave us. I just want to move on to quite a specific issue, if I may. I have been asking questions of the Government and not been getting answers, so this would be my opportunity. You will be aware of the recent decision to close the Mulberry unit at Strachathrow hospital. Are you aware of any other units in the portfolio that are similarly likely to close, whether temporarily or permanently, in the near future? Not at this time, but again, that will be part of what I will be discussing with the chair and the chief executive. I am not aware at this time of proposals to close other units. However, I am aware that the asset footprint of NHS Tayside is very substantial. As we have already said, some are being sold. I would expect that, over time, they might want to consolidate some of the units as part of a better service to the public, frankly, particularly when you are looking at some quite old units. That is obviously a concern. Is there any move in Strachathrow hospital to take that as a particular example? It does not have a great deal left in it and it is an ageing asset. Are there any plans—or the direction of travel would appear to be that Strachathrow hospital might not have a future? Could you tell us clearly whether that is what the people up there can expect? I am not aware of any plans to close Strachathrow hospital. Final question on that—indeed, my final question—when the Mulberry unit was closed, it was made very clear that this was a temporary closure. Are you able to tell me—temporary implies a short period—and it will then reopen? Are you able to tell me if that is the case and when it will reopen? I am not able to tell you when it will reopen, but I am happy to get you that information. I would be very grateful, thank you. Ross Thomson Thank you very much, convener. At the beginning of the session, it was said that NHS Tayside is experiencing a time lag on the cultural change for prescribing savings. During the evidence session that we had in Dundee, Leslie McLey said in relation to questions about that that there had been national evidence that people had been stocking up on excess drugs. Prescribers should know that patients should have enough ample medicines to see them through 80 winter and not to stockpile it up. Can you explain to me why people are being allowed to stock up? There are a number of reasons for that, and I might bring the CNO at some in just briefly after I have said a couple of things. To be simple about it, Mr Thomson, it is not exactly a question of allowing people to stockpile. If people come back for medication not having used what they have already been prescribed and their prescription is on a repeat—to be very simple about it—I have a repeat prescription for medication. I pick it up from the local pharmacy once every two months. If I do not take anything in that two-month period, that is in a sense a choice that I have made. The issue is the points at which the pharmacist or the GP or someone else might routinely review that to ensure that I am taking the medication. I would be anxious to avoid the proposition that we were somehow allowing people to stockpile, but it is a question of what people do as individuals to comply with the medication regime they are on and the steps that we take to ensure that they are. The chief nursing officer may have something to add. I think that Mr Gray has covered that clearly. We would encourage people to manage their own health and therefore contact their surgery for a repeat prescription. In particular, over holiday periods, we encourage people to make sure that they have enough medicine to cover them over that holiday period. As part of the Government's plan in terms of the primary care development plan, there is a commitment to increase the number of specialist pharmacists available within surgeries. They, in conjunction with the GP and the practice nurse, will review what medication patients have in partnership with their patients so that the best possible care can be delivered to their patients. There is an element of encouraging patients to make sure that they have sufficient medicine, but that they will equally monitor practices when people are having repeat prescriptions. At times, they may not issue the prescription if they feel that it is not appropriate, or they would have a note for the patient to come into the surgery. Part of that change programme is trying to deliver a cultural change. We have seen that, in NHS Tayside, agency staff reliance has increased by about 39 per cent. In the round table evidence session that we had prior to the hearing, we heard from a number of the stakeholders about a revolving door of people who were leaving the NHS but then returning back as agency. What sort of work are you doing around identifying why it is that people are leaving the NHS? Why are they coming back as agency? Why are some people applying for posts but then not taking them up? I will ask the chief nurse to say something about that. I think that there was some evidence about people sometimes finding agency work more flexible and better paid. At set against that, there is the value that some people attach to having permanent employment with personal development and training as part of that and having a regular source of income. Those are choices that people make, but we want employers of NHS staff in Scotland to be as attractive as possible so that people take up permanent employment with them. I think that there are a number of pieces of work that we are doing nationally and regionally, but also Tayside are doing locally. We have had the national return to practice programme that will be consolidated within Tayside so that the local university will have that to support nurses who are currently living in Tayside and who want to come back to work to be able to do that and to be able to do that locally. The board nurse director along with the senior team within Tayside is proactively looking at where there are people who are actively leaving and trying to keep them coming back. I think that they are recognising that because of the videography, there are some solutions that work indeed, but they do not work in pairs, so they are looking at bespoke responses to support patient care by having the right number of nurses. I think that we have very flexible policies, so we have PIN policies within NHS Scotland that support very flexible working, annualised hours, term time working. Again, the board is being very proactive in making sure that staff are fully supported to come in and supported with shift patterns that suit the patients but also suit the nurses. We are looking at the non-contract agency and, again, in working in the big urban conurbations in the central belt. We are running out of time. Can I ask you to keep your answer as concise as possible? Absolutely. I am looking at the contract to reduce the reliance on non-contract agency. Indeed, we have seen significant improvement over the past month or two when the board has reduced non-contract agency and absolutely bringing people back into NHS employment. I have two more questions, convener. In answer to the question that Colin Beattie wrote about staff and staff morale, Mr Gray spoke about something that he thought had been improving in having meetings with staff and with the minister. I know myself being involved in a council's own at the top of an organisation or with politicians or ministers. It is very easy sometimes to get involved in a bubble. In the evidence session that we had in Dundee, stakeholders, such as Bob McLashan, were telling us that staff morale is getting less and less. Staff do not feel valued. There is a big stress for the nursing family. Raymond Marshall said that admin staff had been an easy target, with them feeling frustrated and constrained, that the relationship between managers and staff was not good and had gotten worse, and that there was no trust. If we are going to deliver that cultural change, there has to be confidence and trust between staff and management. What role will you be playing in ensuring that there is engagement with staff and that you can command the confidence of staff in taking forward what is going to be a really challenging agenda around cultural change and savings to be made? I will be brief. As I have said, we have provided support. We have had considerable help from Norman Provin of the Royal College of Nursing. I spoke to individual staff-side representatives when I was at the most recent annual review, because I accept your point that you can sometimes get a helicopter view and not see underneath it. I have taken those steps myself. Shirley Rogers, our director of workforce, has been in regular contact with George Docherty, the director of HR, as well as with Norman Provin and others, to ensure that we are continuing to develop. My short answer is that this is something that we continue to take seriously, because the quality of industrial relations in Tayside is critical to the delivery of some of their plans. I have decided not to take item 3 this morning. I understand that there are people in the gallery waiting for item 3. It is just to let you know that we will come back to it at later session, but I think that since this evidence and it is important has run on, we are aware that you need to leave by half past 10, Mr Gray, so I will not take item 3 this morning. I appreciate that. We have talked about the past four years in NHS Tayside, but, as came out in the evidence session, about 15 years ago, a task force was produced with a series of recommendations about avoiding the very financial situation that NHS Tayside is found itself in. I appreciate your response to Colin Beattie when you spoke about that you want organisations in boards to be transparent. In my view, in listening to that, transparency is not an option, it is duty. I know why I feel that I should be grateful to NHS Tayside for being transparent because they should be, but what I am struggling to see is the accountability side. I have been listening to the responses to Colin Beattie and to Liam Kerr. The way that I can articulate that is that this has happened over a number of years. It is like driving towards a cliff edge, like a Thelman Louise-style financial cliff edge, where there are those in the driver's seat who know the direction of travel and have pushed the accelerator knowing that that will be the end result. I am trying to understand where in the organisation that those who have been driving the car over that period of time, knowing where it was going to take the organisation, are going to be held to account and if there is going to be any investigation from your own side into those who have been responsible. I have heard very clearly what Mr Kerr has said and what you have said. I will reflect on that, but, as I have also said, I think that it is difficult to hold to account to people who are not there and also to look back at decisions that were taken, for example, about assets, which in the light of today's economic circumstances now turn out to be wrong. We would have to reflect on whether they were wrong at the time that they were taken. I think that what I would reiterate is that those who are in the leadership positions now are taking the roles very seriously indeed and seeking to make progress, and I believe that they are doing that, but I accept the concern that the committee has raised. I have heard it. We have three additional points from members. I ask members to keep answers very pointed and short and the witnesses to do so as well. It is just a really small point on the prescribing issue. I have been a dispenser and worked in a number of pharmacies. I know that a lot of times you get the prescription and it is for the brand drug rather than the generic and the brand drug can cost quite a lot more. Is that part of the reason for the cost of the prescribing or is it an escalating cost of medicines or is it both, or can you come back to me on the detail with that? I am happy to come back to you on the detail once the deputy chief medical officer has had the opportunity to review that. I think that that is probably the most helpful to the committee if they were content with that. A short time after we went to Dundee into Kevin's in December, we read newspaper reports that the committee had sought external advice to prepare itself for a question and answer session with ourselves. In fact, the report said that Professor Connell had invited a former member of the committee to Ninewell hospital. Given that we are just asking people questions about their job and their duties and that they know that better than anyone else, why would they need to get external help to come here? I think that I will give you three very short answers to that question. The first thing is that you would have to ask them. The second is that I prepare for these committees. I think that there is probably not much in my job that I take more seriously than coming to a committee of the Parliament. Actually, I would always encourage anyone within a health board to prepare properly. How they decide to do that is, of course, a matter for them. My third answer is that some people find that stressful. Therefore, they probably use whatever help they feel they can get. If I am interviewed for a job, I always rehearse in front of other people. That is what I do. On that vein then, in terms of other preparations that were made in advance of our meeting, were Scottish Government officials involved in the preparations for the witnesses? Yes, of course, and I would expect them to be. So what was the nature of that? Discussing the current state of the accounts, the current state of the delivery plan, ensuring that those who were appearing in front of the committee were thinking about what sorts of issues the committee might want to cover. I think that it is a matter of respect for the committee to come along with at least some idea in your mind about what sorts of issues the committee might want to raise. I would think that it was falling short of someone's duty if they did not prepare to come to a committee. So were witnesses rehearsing and preparing for questions and answers with Scottish Government officials ahead of our meeting? Not as far as I know in terms of specific questions and answers, but in the same way as I did, I spent time in advance of this committee going through the various parts of briefing about NHS Tayside, about the current situation, reading the transcripts of the previous committee appearances. I think that that would be normal practice. Just to clarify this, so ahead of the 15th December meeting, apart from Mr Dawn, which I am taking from newspaper reports, who else assisted the witnesses in their preparations for the committee? I am looking for names. Sure. They spoke to John Conach and the chief operating officer, who is part of their tailored support, and they spoke to Christine McLaughlin. I joined him myself before we talked through. As Paul said, it is really to try to make sure that they are very focused and making sure that they are giving you clear, straightforward, simple answers to questions. It is not something that felt an unusual thing to do. As Paul said, it is about trying to make sure that you are giving the evidence that committees are looking for. Thank you. Just as an aside, I wish that at the December meeting, the auditors have been a bit better prepared when they arrived on the scene. In your submission to us, you talked about reducing spending in areas such as agency costs for nursing, and you make a specific mention of that. In the written submission from the Royal College of Nursing, which we looked at in December, they made the point that decisions were taken not to employ agency staff, which results in regular staff not being able to take annual leave. Is that being exacerbated by apparently a drive down again on agency staff, or has that been compensated by hiring staff into vacant positions? The NHST said that we are successful in recruiting an additional 211 new graduates over the autumn. Although our new graduates are fantastic, they obviously need to work for a number of years to get the experience, so it is important that there is a balance of experience and new registered nurses delivered in care. The board nurse director has also been putting work in to make sure that allocation of annual leave is even so that there are not the peaks and troughs of needing additional staff. I would expect that a proportionate approach has taken. It is important that staff have their annual leave and have that within the year, so I would expect all staff to be able to take their annual leave in conjunction and in agreement with their line manager at a time that is appropriate for their personal life, but also for their work. I would expect people within the year to be able to take their annual leave. I would expect a reduction of agency staff, because that is not best value and it is not best for patients. The board is being proactive, as I said, that they have brought in an additional 211 new graduates over the autumn. The RCN makes the point that planned annual leave could not be taken. Clearly, you have an expectation that that is not the case, but do you actually know the facts on the ground? I do not know whether that actually happened or not. I am assuming that the RCN said that the evidence to do that, but again, we would be happy to provide a written update on the position that we are just now with the taking of annual leave for staff. The two key things here are that the reduction in the hiring of agency staff does not impact on the patient experience and, of course, importantly, that the nursing staff are not being disadvantaged because of it. Absolutely. I would expect an overall enhancement, but I am happy to provide further evidence written to make sure that staff are having their annual leave. I should also say, in response to Ms Lennon's question, I speak to every chair and chief executive before they come to a committee. I do that routinely. At our December meeting, Mr Neil was asking about agency costs, so we all were. However, Mr Neil said when he was health secretary that he was seeking to put an agency function inside the NHS so that any profit could be recycled inside the NHS. What happened to that initiative? I will come to the chief nursing officer. We have, of course, bank staff, which is effectively our own bank of agency staff. I cannot say what specifically happened to the work that Mr Neil did, but what we are currently doing just now— Why cannot you say what happened to that work? Because I do not know. I am happy to provide a written response to that. Do any of you know what happened to that initiative? No, I do not. I was not aware of it, to be honest, until Mr Neil mentioned it. However, as I say, my response would be that we have bank staff, which is in effect the agency within the NHS. However, what we are currently doing is working with NHS and boards to put in a national bank. One of the problems is that although we have local NHS board banks, it sometimes makes it difficult for someone to work in Lothian and Fife without being part of two separate banks. We are putting national and regional banks in that we would essentially do what the work of a national agency would do, and we are currently working on that just now. Okay, but that will not replace the agency. You will still allow agency nurses to be used in NHS Scotland. We would expect that to replace the agency staff. What is the timescale for that? I am not familiar with the timescale. That is the work that is on-going, but we can certainly give you that. If you expect that initiative to replace reliance on agency, will there come a point where the chief executive, Mr Gray, NHS Scotland, will say that this is working and we no longer can spend three times as much on agency nurses? Yes. I have made clear to NHS board chief executives and chairs through what we call our once-for-scotland initiative, and this is as good an example as any. Once we agree on a way that things are to be done, we will reach a point of mandating it. Yes is the answer. Do you have a timescale for that? For this specific issue? Yes. No, I do not. Okay. Mr Gray, you said right at the start in your opening statement that you were meeting with the chair and chief executive on 31 March to discuss— No, at the beginning of March. Oh, you are. At the beginning of March. Sorry. At the start of March. Okay, that is fine. I am just conscious that we are taking evidence from them on 30 March, so it would be useful if you could meet them in advance of that. That sounds as if it is going to happen in advance of committee. Certainly, and I think that I also undertook to write to the committee with any update that would bear on what I gave in my initial written submission to you following that meeting. Thank you. I will follow that through you. Thank you. Can I ask a final question about NRAC funding? I think that NHS Tayside's NRAC funding has been at a higher level. Did you say that it would get an extra £8 million this year? Is that higher in percentage terms than other boards? The formula is updated when there is new data. The work of the team involved in that had made a change to the acute morbidity in life circumstances. It is probably not sufficient time to explain all that, but some of the conditions in the formula changed from next financial year. That has led to a few boards changing their position in funding. Tayside was not the only board that benefited NHS Fife, for instance, moved further to receive that. The reason that I am saying that to you is that that was a one-off change. Unless there was to be a significant population change, I would not expect a further movement for Tayside. We have set to plan on the basis of the £8 million recurring from next year. However, I am not expecting there to be a further movement, but that would be determined purely or really by population for the next few years. I am not clear on that. I want to know if Tayside's NRAC uplift is higher in percentage terms than other boards. NRAC funding is only given to boards that are more than 1 per cent behind what the formula says that they should get, so not all boards get NRAC funding. There was £50 million that we put into NRAC funding for next year. Tayside received £8 million. Of the boards that are receiving NRAC funding, is Tayside the highest? No. No, it is not. It is one of the lower ones, so NHS Lothian is at the higher end in funding for that. I can give you the breakdown of the boards and what they have received, but Tayside is £8 million of 50. Effectively, the Scottish Government is giving NHS Tayside NRAC funding to repay money that is owed to the Scottish Government. It is a bit of a cycle. It is, and again, coming back to transparency points, the getting it for a purpose and a purpose is because the funding formula suggests that they are eligible for that funding, so we are still giving them the funding because it is something that in the longer term should be part of their baseline position. It keeps them at 1 per cent below their funding levels, so consistent with all other boards, but there is nothing that I have received unless there is a significant population change that would move them beyond the position that they are currently in. Can I thank all three of you very much indeed for your evidence this morning? I am sure that we will come back to that at a later date. I now move the committee into private session.