NHS Tayside Transformation Support Team: second progress report

AAG Recommendation 1 – Financial Outturn

"We recommend that NHS Tayside should take urgent and robust action in order to maximise the likelihood of achieving the planned in-year savings and delivery of NHS Tayside's projected financial outturn for 2017/18. Detailed action plans must have support from key stakeholders and include anticipated financial impact, identified timetables and milestones. There should be clear trigger points for escalation to ensure swift action when delivery is found to be at risk."

NHS Tayside's assessment

"Since June 2017 the Board has initiated a rigorous and continuous review of the financial position for the current year. A detailed review of the financial forecast outturn for 2017/18 was undertaken during July and August and actions were agreed by the Directors' Group ^[3] and endorsed by the Finance and Resources Committee in October 2017. Based on the revised plan and actions, the current forecast outturn is projected to be a £6.6m deficit; an improved position from the forecast projected at June 2017 of £13.3m. The Finance and Resources Committee has reiterated its commitment to achieving a financial position by 31 March 2018 in line with the Local Delivery Plan. Work is underway to identify further actions required in order to deliver this position.

The delivery of the year-end forecast position is supported by a detailed and risk assessed action plan recognising NHS Tayside's commitment to delivering safe, effective and person-centred care with the Directors individually and collectively responsible for the delivery of agreed targets and outcomes. The scrutiny and challenge of the financial position by the Board, Transformation Programme Board and Finance and Resources Committee has enabled decisions to be taken and improvements to be accelerated, where clinically safe to do so.

All actions have been risk assessed and a series of weekly key performance indicators are reported to the Executive Review Team ^[4] . The Scottish Government Health and Social Care Directorate – Director of Finance has been provided with monthly reports on the financial position and delivery of the savings plans. A monthly summary of the financial position has also been provided to the TST.

Rigorous review and monitoring of the financial position, emerging cost pressures and achievement of financial savings is now firmly established across NHS Tayside and within the three Integration Joint Boards. Involvement of staff partnership representation in review meetings and in support of operational areas has been welcome and supported an organisation wide approach to the ownership of actions and identification of further opportunities to achieve savings.

Next Steps

The Board and Directors' Group remain committed to identifying the further savings required. The Finance and Resources Committee will continue to meet monthly during 2017/18 and regular reporting on financial performance will be reported to the Board and Scottish Government's Director of Health Finance. We have now reviewed the figures for the end of Month 8 which resulted in a forecast year-end overspend of £6.6m. A range of options will be presented for consideration by the Committee on the 18 of January to bring the financial position back in line with the forecast trajectory. A further review meeting has been scheduled with the Scottish Government on 18 January 2018."

TST comment

NHS Tayside has made sound progress to date in implementing all elements of this recommendation.

In NHS Tayside's Local Delivery Plan for 2017/18, submitted to Scottish Government on 31 March, the Board forecasted a £4m deficit at the end of the financial year. As part of the Assurance and Advisory Group's review of NHS Tayside's financial position, EY consultancy undertook a comprehensive analysis ^[5] of the financial plans and concluded that the figure of £4m was understated as it would require all identified savings, regardless of risk, to be fully realised. They considered a more likely figure to be a shortfall of £14-19m.

In response to the AAG findings, NHS Tayside has acted with real focus and urgency to assess their financial position on a realistic basis, and to identify and implement actions to improve the position.

At the end of the first quarter the Board identified that their likely outturn would be a deficit of £13.3m. Since then the Board has evidenced a more robust grip of the financial situation on a day to day basis, with the senior Finance Team working closely with Alan Gray as Regional Finance Lead for the North of Scotland, both to share knowledge and ensure the embedding of best practice.

We have seen evidence of the results of these changes in the papers taken to the Board and its committees, including particularly to the Transformation Programme Board, and the Finance and Resources Committee. These papers have provided clear evidence of: actions being undertaken to improve the financial situation; explanations of where delivery of savings has diverged from the expected milestones; and options to correct or compensate for such movements. We have also seen additional meetings being called where required to agree further actions.

The most recent figures, as at November 2017, indicate a projected out-turn of a £6.6m overspend, (or 0.8% of RRL ^[6] ). NHS Tayside Board continues to reinforce its commitment to reducing this further, with additional proposals being considered in January 2018. This is a significant achievement and we commend the hard-work of all the staff in NHS Tayside involved in delivering this improved position.

We have also observed the positive involvement of clinical and staff side representatives on the groups taking forward the saving initiatives and have viewed this as an indicator of the broad-based support for the various streams of work.

Our rating is based on NHS Tayside's assessment that they will deliver an outturn forecast of £6.6m or better. The critical indicator of success in relation to this recommendation will ultimately be the out-turn delivered at the end of March 2018. It should also be recognised that a significant proportion of the efficiency programmes being delivered this year will result in non-recurring savings, meaning that a similar level of effort will be required to maintain or improve the outturn in future years.

TST rating in September 2017 = Red
TST rating in January 2018 = Amber