 The next item of business is a statement by Jeane Freeman on health and care update. The cabinet secretary will take questions at the end of her statement so there should be no interventions or interruptions. I call on Jeane Freeman, 10 minutes please, cabinet secretary. Thank you, Presiding Officer. This year we are rightly celebrating 70 years of our national health service. Across this chamber we have expressed our pride in our health and social care services and the remarkable commitment of our staff across the country. Although there is indeed much to celebrate, it is also our responsibility to look ahead to see what must be done to make sure that the whole system is equipped for the future. Over the coming weeks I will set out what I believe to be important milestones in the journey that we need to take. Today I am publishing our understanding of the overall financial climate in which we will be working, our expectation of future demand and the demand that places on future resourcing. Over the coming weeks I will also provide an update on our NHS estate, setting the scene for a more detailed capital investment strategy I intend to bring to Parliament before the end of this financial year. As I have set out to the health committee, I will in the coming weeks bring our plan to substantially and sustainably improve waiting times to this chamber. These important strategic developments underline our commitment to transparency and accountability and are supported by the regular reporting of the financial position for our NHS boards and integration authorities. All of those elements combined will provide the clarity necessary for the important discussion that we need to have about the future shape of our NHS and social care services. The Scottish Government's health and social care delivery plan highlights the necessity of achieving long-term financial stability of our health and care system. The financial framework directly supports the delivery plan and sets out in more detail the potential approach and the types of initiatives required to deliver a financially balanced and sustainable health and social care system. It is important to view the health and social care system within the context of the overall Scottish Government budget, the greater fiscal responsibility for the Government and this Parliament and the continued pressure of UK Government austerity. The financial framework is therefore firmly set within the context of the Scottish Government's first medium-term financial strategy that was published in May this year. Today's publication of the medium-term financial framework has required close and effective working with our partners across the whole sector. I am grateful in particular for the support from colleagues in NHS boards, integration authorities and COSLA who have supported this publication. I am grateful, too, for the support of the Chartered Institute of Public Finance and Accountancy, who have welcomed the financial framework and encouraged other areas of the UK to consider the principles underpinning the work. The financial framework sets out the financial environment for the period to 2023-24. It follows the principles that are set out in the Scottish Government's medium-term financial strategy and reflects our current understanding of the UK Government's funding and announcement in June for the NHS in England. Let me say at this point that the implications of the UK Government's announcement are still far from clear. The Cabinet Secretary for Finance, Economy and Fair Work sought immediate clarification on the true level of Barnett consequentials that would come to Scotland as a result of the plans in England. Derek Mackay sought confirmation that the claimed levels of consequentials would be a true net benefit to our budget. He also sought clarification on the implied income tax changes that had been suggested as a result of the UK Government's announcement. It is deeply disappointing that we still do not have the clarity sought from the UK Government on those issues, but the limited information that is available indicates that we will receive consequentials that amount to £3.3 billion between now and 2023-24. In finalising the financial framework, I have made the perhaps bold assumption that the UK Government will honour its commitment, deliver the consequentials as a true net benefit and not reduce the Scottish Government's funding by cuts applied elsewhere or by other measures. I very much hope that this is an area on which we can all be agreed. I can confirm that the Scottish Government remains committed to passing on health consequentials in full. This is reflected in this financial framework. Our commitments on health and care funding have already delivered over £13 billion in health funding this year, including over £550 million in investment in social care and integration. Other key investments that we are committed to delivering include £500 million for primary care by the end of this Parliament and £250 million additional investment in mental health services over the coming years. However, increased funding alone will not be sufficient to meet the challenges that lie ahead. Our health and social care services are faced with clear challenges, not least demographic change, price pressures on areas such as medicines, rising demand and expectations, and we require to address all of that against a backdrop of uncertainty caused by Brexit, the impact of Brexit on our existing and potential workforce and the estimated overall economic damage to Scotland's GDP of £12.7 billion by 2030. If we followed the status quo, running costs would increase by £5.9 billion in 2023-24 compared to 2016-17. To meet this challenge, a responsible Government such as us, it is critical that our significant planned investment must be twinned with reform to drive further improvements in our services to achieve better outcomes for patients. Those reforms include the development of regional working and better collaboration between the national health boards to improve services, including improved regional approaches to the planning and delivery of services. That will help to drive change in how clinical networks are formed and help to reduce duplication in services and functions. I recognise that NHS boards being able to deliver the necessary reforms to achieve what has been outlined in the financial framework will take considerable effort. That is why today I am offering NHS boards a new deal. In return for their efforts to deliver the reforms for the future, I am facilitating a new three-year financial planning and performance framework for our NHS territorial boards. That change will require boards to deliver a break-even position over a three-year period, rather than annually, as is the case currently. In each year, boards will have a 1 per cent flexibility on their annual resource budget to allow them scope to marginally under or overspend in that year. For this new deal to be successful, I believe that it needs a new start. To give all our territorial boards clear ground to move forward on that three-year planning cycle, I will not seek to recover NHS territorial boards outstanding brokerage, the expenditure that is incurred by territorial boards over the past five years, which has been above their budget. I want all boards to be able to focus their attention on delivering the measures that are set out in the health and social care delivery plan and this financial framework and to do that in a safe and appropriate way, making sure that they maintain a strong focus on patient care and the delivery of services that are safe, effective, person-centred and timely. In publishing the financial framework, I want to inform the mature, responsible discussion about the future of our health and social care services that I have referred to before in this chamber. I have been clear on my expectations of the UK Government's funding announcement and how we intend to design, deliver and manage the right health and social care within our available resources. It is essential that we see the UK Government's commitment delivered in full. Failure to do so will have a direct detrimental consequence on the financial position outlined in the financial framework. I believe that we can work together to take the steps that are required to equip our health and social care services with the resources and support that are required for the years and the generations ahead. The cabinet secretary will now take questions on the issues raised in her statement. I would ask all those who wish to raise questions to press the request-to-speak buttons. I will allow you around 20 minutes, which should be adequate if everybody bears the limitations in mind. I call Miles Briggs. I thank the cabinet secretary for advance sight of her statement. The first statement of this Parliament is health secretary on 12 September, said that she had approached her job with mature reflection and, 22 days later, I am sorry to say that this statement does not feel like that. HM treasury figures show health spending in England has increased by 20 per cent since 2011-16, but only by 14 per cent in Scotland over the same time period. If that had increased at the same rate, NHS Scotland would have £676 million more to spend today. Can the cabinet secretary outline why SNP ministers have shortchanged our Scottish NHS at a time of record UK Government health funding? The cabinet secretary in her statement also mentions that she intends to provide an update on the NHS estate. Communities across Scotland that have seen services cut and centralised will be concerned that this statement is the start of yet more SNP cuts and centralisation of our health services. I also ask the cabinet secretary what are the parameters for this NHS estate review, and will Parliament have a chance to see it before it is announced? Thank you very much. I am grateful to Mr Briggs for his questions. I have to start, though, by disagreeing with him. Health spending in Scotland is 7.1 per cent higher than in the UK as a whole. Let's be clear about the facts here. Let's be clear that this Government is not shortchanging anyone. In terms of the estate, Mr Briggs, the only reason people will be concerned is if, once more, the Conservatives in this chamber put out false accusations and claims that are then rebutted by us, but serve to do nothing more than add to concern and upset among the constituents that you claim to represent. I am looking for a mature, reflective discussion, and I really do hope that the Conservative benches show themselves able to rise to that challenge and get involved with us in planning our health service for the future. I thank the cabinet secretary for her earlier statement and for the way that she has so far engaged this chamber as she settles into her new role. We welcome the financial framework and the extra time that helps to give boards to plan their future services. From previous FOI responses, health boards have told us that they are expecting to make over £1 billion of savings over the course of this Parliament. Can the cabinet secretary set out how this medium-term financial framework impacts on those figures and what levels of cuts will health boards be expecting to make over the next three years? The cabinet secretary will also recognise that local government budgets impact on social care services, so can she also set out again what that means for IGB budgets and any savings that they have to make? The statement also confirms that all brokerage over the past five years is to be written off. We have to recognise that the financial mismanagement that has happened in these boards has happened under this Government. Can the cabinet secretary say how much this is going to cost and whether she has confidence in the financial management of health boards going forward? Finally, we welcome at last some honesty from the Government on its plans for service reform, so can the cabinet secretary commit to setting out her plans to this chamber at a future date and also ensuring full public consultation? Jeane Freeman, thank you very much. I am grateful to Mr Sarwar for his questions. Can I be clear on the savings that boards are required to make? This is the case and indeed always has been the case, that the money that boards save is retained by boards for allocation to other areas of spend, so those are not cuts. Those are savings that we ask boards to make in order that they can use that resource in other areas of their spend. The money does not come back to me or to the Scottish Government. It comes and stays with those boards for them to use to improve on the services that they have. In terms of IGB budgets, the financial framework clearly is for the service as a whole. We have, in terms of the money from local government, but most importantly, in terms of the money from this Government and from health spend, contributed significantly to the IGBs and to the work that they are doing. They already have a degree of flexibility because they are part of the local government accounting system. What I am looking to do is to provide the same degree of three-year planning cycle. I am grateful to Mr Sarwar for welcoming that, as we already have with those IGBs. Mr Sarwar raises an important point about financial management. All of our boards are required to ensure and to report and to demonstrate not just in the reporting that they do that is publicly available, but in the regular contact between my officials and their finance officers, that they are prudently managing the budgets that they have and that they are seeking value for money. There are pressures that come on boards, as indeed on the health budget overall, that we have little control over—inflation in terms of drug prices and so on. We have made positive decisions in terms of pay awards, which will be another pressure. Nonetheless, boards have to financially manage their resources with some care. Where boards have in the past not shown themselves able to do that or shown themselves needing some additional skills or improvement, I want to assure Mr Sarwar that my finance officials are actively engaged with them now, will continue to be engaged with them and report and monitor the work that is going on in those boards on a regular basis in order to ensure that all of our boards meet the standards of our best boards and the standards that we expect our boards to deliver in terms of using public funds to deliver quality health and social care. The financial framework is clearly predicated on the UK Government actually delivering the Barnett consequentials that it boasted about earlier this year. Can I ask the cabinet secretary what the consequences for the framework will be if the UK Government does not deliver on its promises in the budget later this month? I am grateful to Ms Maguire for that question. In terms of answering her question, the financial framework, as I said, assumes the full net benefit of those consequentials. In other words, there is no detrimental effect on the Scottish budget in other areas, including on any tax changes that the UK Government might want to introduce. I advise members to look to what is almost the last page of the financial framework to see what our anticipation is of demand and expenditure in terms of health and social care, what we will do in terms of what we expect to achieve by way of reforms and then imagine that if you take out £3.3 billion, that is the impact of any detriment in terms of those full consequentials not coming to us in either full or in part. It will destabilise that financial framework and we would have to look again at that. However, it would be more than that, it would be in effect a broken promise. That is significant in terms of how we work together with the UK Government as it tells us repeatedly that it wants us to do. I take the opportunity to apologise. I did not pick up Mr Salwa's question in terms of service reform. There are two things that I want to say on that. One is that our health and social care delivery plan outlines what we need to do in service reform. I am happy to speak to individual members or to party spokespeople about individual reforms board by board as they might come forward, but also on the wider reforms that we have already set out in terms of our primary care, GP working, our increase in the workforce and any other matters that may be of interest to members. Brian Whittle, followed by David Stewart. Thank you, Deputy Presiding Officer. I have to say that I was hoping for a change of Cabinet Secretary. We might get a change of approach, but it reminds me of the words of Don Roger Daltreys, meet the new boss, same as the old boss. I try to ask the Cabinet Secretary to give the report the struggles of your constituency health board, Ayrshire Narm, to meet its financial obligations, both existing and future. How does she anticipate those new proposals will impact on the delivery of a number of procedures, including cancer treatment and cataract surgery, which are already areas of concern in our area? We might not all be agreed, but many of us agreed that that was not Roger Daltreys. That aside, this is the Cabinet Secretary for Health and Sport, and I am sure that Mr Whittle will work very well in the weeks ahead. In terms of your question on waiting times, what we need to understand is the setting out of the medium-term financial framework. Our understanding of the financial pressures that are set against the demands that are set against what we know we need to do, assuming full net consequentials from the UK Government, and therefore what the position looks like as we go forward. Members who have had the opportunity will see that, even with those reforms, there is still a financial challenge there, and we need to work together to address that future financial challenge. We need to do some of that now, and that is the mature conversation that I live in hope for. In terms of waiting times, as Mr Whittle heard me say, I will come to this Parliament with a plan for improved and sustainable improvement in our waiting times, including those times that he mentioned. The resourcing that I will then outline, I commit to that, is indeed taking account of in this framework. David Stewart, followed by Alison Johnstone. Thank you, Presiding Officer. I welcome many of the initiatives in the statements, such as waving brokerage. Can I ask the cabinet secretary about the key underlying trends that have caused financial instability in many boards such as NHS Highland? The cabinet secretary will know that the auditor general made clear that brokerage for Highland was likely to be needed over the next three years. The areas of financial concern are well known to the cabinet secretary, their adult social care, their drug overspend and the cost of hiring medical locums. What comfort can the cabinet secretary give to patients and staff in Highland that the next three years will not just be more of the same, or is she saying, as Bob Dylan said, that the times they are changing? I am not going to get into a competition quoting songs, although I am pleased that both members have gone for songs in my era. That is a comfort to me. Mr Stewart makes an important point, and it partly links to what Mr Sarwar was asking me, which is fine. I appreciate the fact that they welcome that we are in effect clearing the slate, introducing that three-year planning cycle, giving that degree of flexibility year on year within those three years. However, the end position for each of our territorial boards at the end of three years is that they have to break even. Therefore, we cannot continue with a situation in which boards have significant overspends on their budgets, albeit that those spends have been on patient care. In looking at how we deploy our resources to boards and how we expect them to deploy their resources, part of the reforms are looking at how we can ensure that the resources that we have within all the caveats that I outlined are adequately targeted towards patient care meeting those waiting times and so on, with some of the additional resources that we will come forward with. We also value our workforce, we increase our recruitment and we meet those pay pressures that I talked about. I am convinced that where we have boards that are managing to do that now, not every board is looking for brokerage. Indeed, in some where they set out at the beginning of this year, looking for that, that figure is coming down. If we look at previous years, we see that that is what happens. We have a small number of boards where brokerages is definitely expected as they were described at the end of this year. That is what I am saying. I will not seek repayment of that, if you like. However, in those other boards where financial management and quality of patient care is being finely balanced but is being managed, I want those other boards and the lessons that they give to their colleagues to be transferred and my officials to help them to do that. That is what is actively happening right now. In some boards, such as Highland, I completely accept that there are additional pressures in terms of the geography and the demands that are there. However, some of the initiatives that we have introduced in terms of rural working and GP recruitment in rural areas and so on will, I am sure, help to address some of those new or different challenges between our territorial boards. Alison Johnstone, followed by Alex Cole-Hamilton. I welcome the move to a three-year financial planning cycle and the fact that the Government is not seeking to recover outstanding brokerage. The ability of NHS boards to forecast demand and to plan effectively to meet it and to deploy the resources most effectively hinges on them having access to the best data, to the highest quality information. I would like to understand what the cabinet secretary tells us and what the Scottish Government is doing to offer board support in that regard. Thank you very much and I am grateful to Ms Johnson for what is, I believe, an important question. She is absolutely right that part of the key to this is being able to forecast demand. One of the areas where we have some of the highest quality information that is drilled down to quite a significant level is from our integration authorities and our integration joint boards. What we have not been doing to the degree that I require us to do that is triangulating all the information in the data that we have so that we can adequately forecast demand from one area to another. We are now beginning work on that to ensure that the data that comes into us, the data that those integration authorities currently hold, is not only shared as widely as appropriate and should be, but is also triangulated so that we get more than a one-dimensional picture if you like about what demand looks like coming towards us for our health and social care services in the decades ahead. I thank the cabinet secretary for advance sight of her statement. Three years ago, the Scottish Government said that it would eradicate delayed discharge. It is one of the biggest financial drains on the resources of our health service and this week delayed discharge got worse. Will the proposals outlined in the statement end delayed discharge? Jane Freeman. That is the financial framework. That is our current estimate of the financial position that our health service faces in the years ahead and of the demand that is placed on that health service. It is not a framework that has specific initiatives within it, nor should it have. The waiting times plan that I will bring forward, which is looking at improved unsustainability in our waiting times work, which links to delayed discharge, as Mr Cole-Hamilton well knows, will come forward to this Parliament in the coming weeks. It is there that we will look to see how much further we can make an improvement in delayed discharge. I draw his attention to the successful work of the Aberdeen integration authority, which successfully, by some significant percentage points, not only brought down delayed discharge, but also brought down unscheduled bed days, if you like, in hospital. It is learning from those areas that I intend that we will scale up and transfer across all our integration authorities when I talk about increasing the pace and the effectiveness of their work. Can I say at this point that I do not think that I am going to be able to get everyone in? The health secretary made the welcome announcement of a new deal for health boards, to give them greater flexibility between annual budgets. Can the cabinet secretary outline what flexibility integration authorities have to plan beyond annual budgets? Jeane Freeman. I am grateful to Mr Allen for that question. Integration authorities are, in accounting terms, part of local government, and so they have that degree of flexibility and they also have the capacity to hold reserves. So what I am trying to do is ensure that that degree of flexibility and capacity to plan within a reasonable time-flame is also something that our NHS boards can benefit from. Annie Wells, followed by John Mason. Thank you, Presiding Officer. The cabinet secretary has stated that the brokerage to those health boards that have it will be written off. Can I ask the cabinet secretary when that will be, and will we see in this year's Scottish Government budget, and also an estimate of how much debt will be written off? Jeane Freeman. I will start with the last part of that question first. Our current estimate of what brokerage would be for the last five years—so it is not about this current year alone—is around £150 million. All territorial boards will start with a clean slate from 2019-20. That is when we will begin that three-year planning cycle with all that work that I described earlier. In the meantime, boards will continue to work to reduce what they anticipate will be their level of brokerage, and in many of our boards we are seeing that coming down significantly as they finalise and refine their plans in terms of reform and service delivery. However, everyone will start, as I said, with that new deal from the financial year of 2019-20. John Mason, followed by Jenny Marra, who will be the last question. The cabinet secretary mentioned Brexit in her statement. Presumably, that could have an impact both on the economy and less taxes, which would put pressure on the NHS, as well as a potential shortage of staff, both skilled and unskilled. Does she think that the UK Government understands those extra pressures on our NHS? I am grateful to Mr Mason for his question. I do not have insight into the minds of UK Government ministers, but by their actions it appears to me that they do not understand, or if they do, they are not taking sufficiently seriously the impact of Brexit on our health service, not just in Scotland, but the health service in England, Wales and, indeed, in Northern Ireland. All of us benefit significantly from EU nationals being valued, skilled and experienced members of our workforce. We also all benefit from our own workforce being able to work in EU countries. We benefit from the mutual recognition of qualifications. We benefit from being part of, and in Scotland's case, leading members of international research collaboratives, which produce significant input to our economy. There is a great deal here that is at risk and that is troublesome and worrying, and I hope that the more we repeat it and I look to colleagues across the chamber to assist us in that, not least those colleagues on my left-hand side, we begin to get the clarity that we need from the UK Government, and they begin to demonstrate that, if they do understand this, they are going to act to do something about it. Jenny Marra Can I welcome and congratulate the cabinet secretary on the financial framework today? It's been recommended for some time now, it's been long awaited, and I do feel that the Conservative front bench has really misjudged the advance that has been made today, because it allows us to make the shift to the care that we need. A point of clarification, if I may, Presiding Officer. The cabinet secretary said that she will write off all outstanding brokerage. She knows that NHS Tayside has a projected deficit of £18.7 million for this financial year. Will she write that off as well, so that we can really start with a clean sheet to make that shift of care that we need? I'm grateful to Ms Marra for that question, and for her recognition, as I believe colleagues on the Labour benches have done, of the importance of this financial framework and what it actually is, as opposed to what it's not. That's an important question that she asked, and by my answer earlier, that all health boards will start with a clean slate from the financial year 2019 to 2020, then I believe that I'm answering and saying that yes, that will be the case. There will be no brokerage to be recovered where that additional spend has been on patient care from the end of this year. We move forward from 2020 to that three-year cycle and that clean slate. That concludes questioning on the cabinet secretary's statement. My apologies to Rona Mackay, who wished to ask a question. I say to members that we have eaten into time for the next debate, but we still didn't manage to get through all the questions. We have a couple of moments for folk to get organised.