Delivery of eHealth Strategy 2011-17 Progress Report 2011-13

3 - Finance and the eHealth Information Management & Technology (IM&T) Expenditure Survey

eHealth had a revenue budget of £90,300,000 in 2011-12 and £88,703,000 in 2012-13, with the bulk of this budget allocated to NHS Boards, at the beginning of the financial year. In 2012-13 this amounted to around £78,901,000: around 89% of the budget. in 2011-12 the total was £83,498,218: almost 93% of budget. The money that is retained centrally is primarily used to commission or support work that will have potential national application. This arrangement was agreed as part of the eHealth Finance strategy, which extended the planning horizon for Boards and incentivised collaborative working for the benefit of NHS Scotland as a whole.

The Scottish Government provides revenue funds, with the NHS Boards using their own further revenue and capital funds to support eHealth. The bulk of the revenue budget distributed to Boards was for business as usual activity including maintaining the infrastructure on which modern healthcare delivery depends, and this remains a large part of the focus for eHealth departments in Boards. The breakdown of these figures is outlined, below.

The applications fund pays for the on-going upkeep of the core national IT systems in the NHS whereas the infrastructure fund pays for things like N3 broadband and email services. The 'other' fund covers large one off payments for things such as enabling national initiatives, capital charges, and) and depreciation charges. NHS Boards working collaboratively are making efficiencies that will free up funding to develop the strategic aims and support innovation.

It is recognised that the 6 strategic aims outlined in section 2 require additional funding to make sure that the outcomes can be delivered. The strategic fund of £17,050,000 is to help Boards do this.

The eHealth Finance strategy identified the potential for exploring opportunities for shared services within NHS in Scotland. It also committed to carrying out an expenditure survey, in tandem with the process of devolving increased management responsibility to NHS Boards, for the management of eHealth budgets. The survey's overall aim was to assess whether value for money is being derived from investment in ICT, thereby addressing one of the key points raised within the McClelland report on investment in ICT within the Public Sector.

The survey focussed on the 2011/12 financial year, and used the Gartner methodology and toolkit. This benchmarking model has been widely used by both public and private sector organisations.

The survey confirmed that the overall level of expenditure by NHS Scotland on ICT in 2011/12 was £236.5m. Of this total, £213m was incurred on expenditure items of a revenue nature with £23.5m incurred on capital expenditure. Within total revenue expenditure of £213m, territorial NHS Boards incurred approximately 70% with 25% incurred by Special Health Boards, and the remaining 5% incurred centrally by the Scottish Government eHealth Division.

Overall, it was concluded that the NHS in Scotland spends £39.1m less on delivering IT services than the Peer Group selected by the Gartner methodology would spend to "run the NHS environment". A set of recommendations for key strands of work were provided, as part of the final survey report. These will be considered and factored-in to the update of the overall eHealth Strategy.