NHS Scotland Chief Executive's Annual Report 2017/18

Chapter 4 - Securing Value and Financial Sustainability

‘investment is enabling local partnerships to work together to make best use of their total resources and ensure people have access to the right care at the right time and in the right place.’

Visit www.nhsscotannualreport.scot for the online version of the Annual Report, including peoples’ stories and key facts and figures.

In 2017/18 total health funding amounted to £13.1 billion, with funding over the past decade having increased by 7.7 per cent in real terms. In 2017/18, additional investment in NHS Boards totalled £327 million, providing increased funding for territorial NHS Boards of 2.1 per cent and providing £128 million to support delivery of service reform. This funding also ensured that all territorial NHS Boards were brought within one per cent of their target funding allocations for the first time.

In 2017/18, three NHS Boards required a two to three year timeframe to return to financial balance, and consequently required additional support in the form of brokerage. The total level of brokerage amounted to £50.7 million (0.4 per cent of the total health spend) and was managed within the overall Health portfolio budget. The Scottish Government provided this funding to ensure that there was no impact on patient services, and in line with the overriding priority that patients continue to receive first-class care.

Investment and Reform

In 2018/19, health funding has increased by 3.4 per cent (over £400 million) with total additional funding of 3.7 per cent for frontline NHS Boards. This additional funding was provided as part of the Scottish Government’s twin approach of investment and reform, recognising the increasing demand and expectations placed on frontline services, and being clear that the status quo is not an option.

Work has also progressed on the new network of elective and diagnostic centres, supported by Health Facilities Scotland and NHS National Services Scotland. Capital investment over the next few years will expand the Golden Jubilee National Hospital and will create five new centres in Aberdeen, Dundee, Edinburgh, Inverness and Livingston – increasing capacity for delivery of routine procedures. The Golden Jubilee expansion is expected to be operational by summer 2020, with the remaining projects completing by 2022.

Chart 3 – How the Budget was Spent

Source: NHS Boards’ published accounts for the year ended 31 March 2018

Shifting the Balance of Care

Funding has continued in order to shift the balance of care to mental health and to primary, community and social care. This will mean that for the first time ever, by 2021/22 more than half of frontline spending will be on community health services.

The Mental Health Strategy 2017-2027^[179], launched in 2017, was supported by additional investment of £150 million over five years. Overall expenditure on mental health in 2017/18 exceeded £1 billion for the first time and this has been further increased in 2018/19 with additional investment of £17 million in mental health workforce and Child and Adolescent Mental Health Services (CAMHS).

Spending on primary care has continued to increase as a proportion of the frontline NHS budget, with funding through the primary care fund increasing to £72 million in 2017/18 and to £110 million in 2018/19. This funding supports primary care transformation, and implementation in 2018/19 of the new GP Contract.

The 31 Health and Social Care Partnerships, now in their second full year of operation, are critical to shifting the balance of care. In 2017/18, the 14 territorial NHS Boards delegated £5.5 billion of their budgets to the Health and Social Care Partnerships. Supported by £3.4 billion of delegated Local Authority budgets, pooled budgets of £8.9 billion were available across Scotland to deliver primary and community health services and social care. The Partnerships have continued to demonstrate impact across care pathways in 2017/18 with a reduction of 6 per cent bed-days lost on 2016/17 figures, building on reductions in previous years^[180].

In 2017/18, the Scottish Government’s overall package of additional direct investment in social care and integration increased to over £550 million. This investment is enabling local partnerships to work together to make best use of their total resources and ensure people have access to the right care at the right time and in the right place.

Capital

Capital investment in the NHS Scotland estate continued to be a key enabler of change and helped support the delivery of the National Clinical Strategy for Scotland^[181] with a number of new facilities being developed.

In December 2017, the new Dumfries and Galloway Royal Infirmary opened to patients. The new hospital represents an investment of £213 million and is one of only two hospitals in Scotland to have 100 per cent single-bedded room provision for inpatients with 344 en-suite rooms. In addition to inpatient rooms, the hospital provides a wide range of general hospital specialties including a combined assessment unit, theatres, critical care unit, maternity services and an outpatients department. The hospital was officially opened on 12 July 2018 by the HRH The Princess Royal.

The new state-of-the-art national centre for the Scottish National Blood Transfusion Service – the Jack Copland Centre – opened in early 2018 and is providing world-class facilities to enable development in modern blood, tissues and cells supply service. The Centre was officially opened on 4 July 2018 by HRH The Earl of Wessex. The Stirling Health and Social Care Village, supporting the integrated delivery of services by co-locating five GP practices and encompassing health and social care services, is already delivering some services and is due to complete later in 2018. In Orkney, the new Balfour Hospital and Healthcare Facility is ahead of schedule and is due to open in early 2019.

As part of Scottish Government’s hub investment programmes, in 2017 the new accommodation for adult acute mental health, older people’s mental health assessment, intensive psychiatric care service and the new Robert Fergusson national brain injury unit at the Royal Edinburgh Hospital site opened. This concluded the first phase of the site transformation to provide modern and fit-for-purpose facilities.

Sustainability and Value

The Scottish Government continues to work with NHS Boards to deliver savings to ensure that public money is being used effectively and for the benefit of patients, and that every penny of savings is reinvested directly into frontline services.

The Sustainability and Value Programme Board was established in 2016/17 and continues to oversee initiatives undertaken by NHS Boards and their delivery partners to reform services. Initiatives are grouped into thematic workstreams and are centred on attaining better services, better care and better value. The workstreams cover a broad spectrum of areas including: prescribing; workforce; clinical transformation; and facilities and procurement.

In 2017/18, the Sustainability and Value Programme Board commissioned NHS National Services Scotland to bring together a range of indicators in order to provide an overview of where there may be opportunities for improving value across NHS Scotland. The data is currently being incorporated into a single dashboard that will enable NHS Boards to identify opportunities across a range of areas and to benchmark against the rest of Scotland.

Publication of the Medium Term Health and Social Care Financial Framework

In October 2018, the Scottish Government published its Medium Term Health and Social Care Financial Framework covering the period from 2016/17 to 2023/24. The framework supports the Health and Social Care Delivery Plan^[182] and sets out in detail the types of initiatives required to deliver a sustainable health and social care system.

The guiding principle underpinning the document is that we will continue to provide a world-class service for patients, supporting our ambition that everyone is able to live longer, healthier lives at home or in a homely setting. The Framework explores current expenditure trends and reform analysis and underlines the importance of using our total resources across the whole system to drive value, reform and long-term financial sustainability in health and social care.