Health, Social Care and Sport Committee

Meeting date: Tuesday, January 16, 2024

Official Report 629KB pdf

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Budget Scrutiny 2024-25

The second item on our agenda is the consideration of evidence from the Cabinet Secretary for NHS Recovery, Health and Social Care, Michael Matheson, as part of the committee’s scrutiny of the Scottish Government’s 2024-25 budget. I welcome to the meeting Michael Matheson and Richard McCallum, who is the director of health and social care finance, digital and governance at the Scottish Government. I invite the cabinet secretary to make a brief opening statement.

Good morning, convener, and thank you for the invitation to discuss the Scottish budget and what it means for Scotland’s health and social care services. The budget includes funding of more than £19.5 billion for the continued recovery of the national health service—our health and social care system. The budget provides an uplift that exceeds front-line Barnett consequentials. It means that resource funding for health and social care has more than doubled since 2006-07.

Despite that investment, the system is under extreme pressure as a result of the on-going impacts of Covid, Barnett, Brexit and inflation, and United Kingdom Government spending decisions have also resulted in hard choices, as greater efficiencies and savings will need to be made. However, investing in Scotland’s NHS is non-negotiable for this Government. The budget settlement gives our NHS a real-terms uplift in the face of UK Government austerity. Crucially, it includes more than £14.2 billion for our NHS boards, with an additional investment of more than half a billion pounds.

The budget supports investment in excess of £10 billion for the NHS pay bill, rewarding our dedicated and skilled NHS staff for their work in recent years. There is more than £2 billion for social care and integration, which means that, two years ahead of our original target, we are delivering on our programme for government commitment to increase social care spending by 25 per cent over this parliamentary session. It provides an additional £230 million to support delivery of the pay uplift to a minimum of £12 per hour for adult social care workers in the third and private sectors from April 2024, representing a 10.1 per cent increase for all eligible workers.

We continue to invest in quality community health services to support our prevention and early intervention priorities. That includes investment of more than £2.1 billion for primary care and supporting spending in excess of £1.3 billion for mental health.

We will continue to work with partners to address the challenges that the settlement brings and to take forward the reform that is essential for the delivery of a sustainable health and social care system as well as high-quality services. I am happy to respond to any questions that members have.

Thank you, cabinet secretary. We move straight to questions from members.

I declare an interest as a practising NHS general practitioner. Good morning, cabinet secretary, and thank you for coming today.

Good morning.

From your opening statement and from what we have heard and seen you say previously, do you feel that you have adequately resourced the Scottish NHS?

I do not think that you would ever get a cabinet secretary for health to say that they would not want more resource to invest in the health and social care system. In the light of our very challenging budget settlement, we have achieved the best possible outcome that we can for the health and social care budget.

Notwithstanding that, efficiencies and savings will have to be made for us to live within the budget settlement that we have and the growing demand that we face. I think that this is the best outcome that we can achieve in challenging financial circumstances; however, there will be continued challenges for the health and social care system even with this budget.

What are your top three priorities with the budget that you have set out? What are the three things that you would want and expect at the end of this year and as we go into the next year?

One is continued investment in our NHS recovery, including in prevention, with a particular focus on primary care. Another is continued investment in mental health services, to ensure that they meet the needs of citizens across the country. Another is continued investment in social care, to ensure that we are doing everything that we can to give it greater resilience, particularly by way of recruitment into the workforce, which is critical to supporting our NHS.

In laying out those three priorities and in your opening statement, you spoke about mental health. Is it not true to say, though, that there is a 1.6 per cent real-terms reduction in your budget for mental health services?

The reality is that about £1.3 billion is invested in mental health services. About £290 million of that is central funding from the Scottish Government, and that has increased—in fact, it has doubled since 2020-21. Over the course of the past two to three years alone, we have doubled the level of that investment and maintained it, despite the difficult financial environment in which we are operating. That has allowed a very significant expansion of mental health services in Scotland, and we want to sustain and maintain that. Over the course of the past couple of years, there has been a huge increase in the level of investment that we are putting into mental health services.

We have seen a significant reduction in mental health across our country. We have also seen significant increases in waiting times for child and adolescent mental health services; the longest wait in Glasgow was 37 weeks to be seen. The reduction in budget will surely impact and harm mental health.

I disagree with that, and it would be unfair to suggest that waiting times for CAMHS have not been reduced. There has been a very significant reduction in waiting times for CAMHS, and in particular of the build-up that developed over the course of the pandemic. Staff across our child and adolescent mental health services are working really hard to address the waits, and we have seen very significant reductions in them. Of course, where there continue to be extended waits, that is not acceptable, and that is why work is still being undertaken to address the issue.

However, anyone who looks at the course of the mental health budget over the past couple of years cannot avoid seeing that the budget has, in some cases, more than doubled. That has allowed for a significant expansion of services and an increase in capacity of those services, which we are now seeing the benefits of in terms of the waiting-time reductions that we are achieving in CAMHS services overall.

I recognise that challenges remain in delivery of mental health services. Notwithstanding that, very good progress is being made, and the sustained increase in investment that we have made over the past couple of years is making a difference.

In stating your top three priorities, you spoke about NHS recovery, which you mentioned in your opening statement as well. You feel that you have put a budget for that in place. Therefore, at next year’s budget time, should we expect to see significant reductions in improvement in accident and emergency waiting times and significant improvements in waiting times for procedures?

Let us look at where we are with A and E at present. We have seen an improvement this year compared with where we were last year. We are continuing to work with health boards to sustain further improvements.

You will be aware that one of the major challenges that we have with A and E performance is flow from A and E into hospitals. A significant part of that is caused by delayed discharge. Despite the fact that around 98 per cent of all discharges from hospital take place on time, the 2 per cent that do not have a significant impact on flow into hospitals from our A and E departments. This year, we saw a reduction in the number of delayed discharges compared with where we were last year. I want to ensure that we do intense work this year on what more we can do to reduce delayed discharge, because we know that that is critical in supporting the flow into our hospitals.

We are doing a second element of work on reducing the level of demand at our A and E departments. For example, the work that the Scottish Ambulance Service is doing through its integrated clinical hub is reducing the number of people who have to be conveyed to our A and E departments, and that is as a result of the investment that we are making into that service.

We are doing work to improve those things, but demand is significant. I believe that we can still make further progress, and I am determined to ensure that we do that during the next year. We will continue to focus on the areas that we know will improve the performance that we get in our A and E departments and across our unscheduled healthcare system. We are making progress, but there is certainly much more to do, and there is determination to ensure that we do it.

We now regularly have more than 1,000 drug-related deaths each year, and we seem to be going backwards in the care that we give to people with drug dependency. There has been a reduction, in real terms, in the budget. What is your commitment to that figure and to reducing the number of deaths, and how do you expect people to do that with less money?

We gave a commitment to increase investment to some £250 million during the parliamentary session to tackle the twin challenges of drug and alcohol misuse, and we are on track to deliver that and sustain that level of investment.

We are keen to see further growth in the provision of rehabilitation services, and work has been done to achieve that. The commitment that we made to ensure that there was sustained investment in drug and alcohol services is being taken forward in this budget so that we continue to see the progress that we need in the delivery of those services to improve outcomes for those who suffer from drug and alcohol misuse.

Funding for the drugs policy has increased by 67 per cent since 2014-15. There has been a sustained period of increased investment. We committed to ensuring that there was additional investment of £250 million to support our drugs and alcohol mission, and the budget builds on delivering that.

Good morning, cabinet secretary. I am interested in the NHS Scotland resource allocation committee formula and the review of that. I know that it is specifically calculated to support remote and rural places. Can you give us an update on the undertaking of a review of NRAC and a timescale for when we might expect to have the review in front of us?

We have allocated an extra £31 million in the budget to ensure that all boards are within 0.6 per cent of NRAC parity. The largest chunk of that goes to NHS Lothian and NHS Fife.

The review group is called the technical advisory group on resource allocation. It has met three times so far, and it is drawing together work to take forward the review of NRAC. I should say that it will not be a quick process. It will take a lot of detailed work to take forward any funding formula changes or developments. The group has already started commissioning the data and information that it requires in order to look at how it could adapt the existing NRAC formula. Richard McCallum might be able to say a bit more on how it is progressing.

09:30  

I can add a couple of things. The NRAC formula is still valuable in terms of the information that it provides to us. As the cabinet secretary has said, it is a really important mechanism by which we allocate funding, given that it takes into account a wide range of population and health factors.

As the cabinet secretary has just said, the group that is looking at it has met three times already. It will continue that work over the course of 2024 for the Scottish Government to review later this year; potentially, it will continue that work into 2025.

The commitment has been for the NRAC formula to be reviewed over the course of this parliamentary session, and, as officials, we are certainly committed to doing so. As I say, over the course of the next year, we hope to be in a position to introduce any potential changes.

However, even in its current form, the NRAC formula has value and a role to play. It is about ensuring that any refinements that we make are properly reviewed and scrutinised, which is what we will do.

The committee is doing an inquiry on remote and rural healthcare right now, and I am sure that NRAC will help to inform us in our inquiry.

Talking a wee bit more about health boards, I would be interested to understand what processes are in place to do comparisons between health boards. Clearly, there are different challenges in different parts of the country, but there are also an awful lot of common challenges. What processes are in place to understand which health boards are better at performing and more efficient at delivering, and what mechanisms are in place for health boards to learn from each other, to learn from the best in class and to roll out best practice?

I will bring in Richard McCallum to talk about our work with boards on how we can share learning.

We have a formal process for monitoring all our boards’ performance, not just in terms of key targets but around financial management. We also conduct an annual review process for each of our boards to evaluate the progress that they are making; they have an in-year review as well.

One challenge that has been around for a long time—I recall this from when I was previously a junior health minister—is trying to make sure that, where there is good practice in one part of the country, it is replicated in other parts of the country. That challenge is not peculiar to health; it is a challenge within the public sector overall. It is always a source of frustration to me that, in a country of 5 million people, we struggle at times to make sure that good practice is replicated and that where it is established, it sticks.

We have a number of different mechanisms through which we seek to do that. One is that we regularly bring our board chief executives together to focus on particular areas of challenge and, where they have taken new approaches, to share that practice. We do the exact same thing with the NHS chairs of the boards. I meet them every six weeks or so; we have the opportunity to focus on key areas where there is good practice or on areas where there are challenges, in order to try to encourage good practice.

We are also making much greater use of the centre for sustainable delivery, which is based at the Golden Jubilee National Hospital special NHS board. The centre was established to look at key areas where there are opportunities for efficiencies and improvement in service delivery. It takes that forward with individual boards and it can model what the impact would be on an individual board if it were to deliver something differently. It can also do specific work with individual boards.

Over the next couple of years, the centre will probably be the key mechanism that we will use to try to get greater consistency, to make sure that we are getting better adoption of good practice where it has been identified, and to bring new ideas to boards.

I will ask Richard McCallum to say more about what we do on finance with the boards.

We are taking forward a range of work to encourage the adoption of good practice where it has been established in one board.

Ivan McKee’s challenge that there are different positions across NHS Scotland is right because, although all boards need to make savings and they all recognise some of the financial challenges that are being faced, not all of them are in the same position financially. For example, in 2022-23, 17 boards reached financial balance and five did not. As the cabinet secretary said, there is a formal mechanism through which boards that have not been in a position to do so can scrutinise the issues that they face and their areas of focus so that they can address their financial challenges.

More broadly, we work very closely with all the health boards, through the chief executives group and through directors of finance and other forums. A key measure that we have taken is the development of a list of almost 15 key areas, such as effective prescribing. That lets us look at the data on each area from across the country. I would be happy to share it with the committee. Sometimes variation among boards will be understandable and warranted and there will be a good reason for it, but often there will not be. The list has given us a mechanism through which we can expect boards to look at all 15 areas and assure themselves that they are doing all they can in each of them, but also through which we, from a Government perspective, can look at those situations and challenge boards and scrutinise where they might be off track.

Another of the areas is supplementary staffing. Going back to Ms Harper’s point, in certain parts of the country it might be more necessary than in others, but it is important that we can see the variation across the country and carry out the appropriate challenge and scrutiny where necessary.

Is health board management well aware of where their boards sit in those 15 league tables, who is best and who they should be learning from?

Yes. That is very clear in the system.

Thanks.

Good morning. My point probably links to things that my colleagues have said. It is about the sustainability of health boards and where we think that Government and the boards are required to work together. Cabinet secretary, you noted that there are five—although my papers said four—health boards that are indicating that they are having financial pressures.

What are the key actions that you are working on together in relation to financial sustainability? What three things are you working on together with the health boards that are on the escalation framework, particularly those that are at stage 3?

We have, I think, five health boards at stage 3 of the escalation process. It is important to emphasise that providing tailored support to boards that are experiencing specific financial pressures is not new. The mechanism has been in place and has been used at various points over the years. Clearly, though, we are in a very challenging financial environment, so we have boards that are under extra pressure.

I will get Richard McCallum to say a bit more on a couple of areas that he has just touched on. One area is how boards manage their staffing. There is the use of agency staff versus bank staff and the issue of recruiting staff. The second area is prescribing. There are marked variations among boards in prescribing and in the costs associated with it. Although we might procure a lot of the drugs in Scotland centrally, prescribing variations can have an impact. The chief pharmaceutical officer is doing work to ensure that we do as much as we can to get greater consistency in prescribing, because that can also address issues around the costs associated with prescribing.

Richard, do you want to say a bit more on some of the other work that we are taking forward to give support around financial sustainability?

Yes. I think that, broadly, there are three or four areas on which we are working most closely with boards.

I should just say that the five boards that I mentioned were from the outturn figures in 2022-23. Obviously, we are still working through the current financial year with health boards.

The major spend areas for health boards are workforce and medicines, so they are key areas on which we are doing work. I mentioned work on supplementary staffing and effective prescribing; that is key, as is ensuring that there is good practice in the areas in which there are opportunities to switch from patented drugs to generic ones, and other such opportunities. It is important that there is clarity about how that is done.

As well as that, we need to draw on work that can be done by the national special boards. NHS National Services Scotland does a lot of work on behalf of NHS Scotland. Good practice in procurement in prescribing is an area that it could support, but there are other areas as well.

We need to ensure that where there is a national approach to certain services, all boards are expected to play into that process—they are expected to work with each other to identify the best opportunities and best practice, as I said in my answer to Ivan McKee.

Okay. I have a couple more points relating to issues that are raised with the committee quite a lot. The first is about the way in which settlements are made and how multi-year is helpful. We hear that a lot from other sectors, and we have heard it in committee meetings. How are you placed to be able to offer that to some boards?

Do you mean multi-year budgets?

Sorry, yes.

Through our medium-term financial framework—I think that we published that in 2022. Is that correct?

Yes. It was the spending review.

Okay. Through the spending review 2022, we tried to set out an indication of budget for a three-year period. The problem is that we get only an annual budget, so we do not know what next year’s budget will be. The challenge is the way in which the UK fiscal environment operates—it works annually. It is very difficult to give a commitment on what will happen during the next financial year when we do not even know what our budget will be for that year.

However, I agree with you that if we could get into a cycle in which we were able to provide a much clearer indication, during a three-year period, to allow organisations to plan more effectively, that would probably be a much more efficient way to manage services. It would give them certainty. However, the principal challenge that we have is that we have an annual budget, so we do not know what our budget will be the following year, which makes it almost impossible for us to make commitments into the following financial year. I agree with the premise that if we could do that, we should. However, fiscal change at UK level would be required to give us certainty during a three-year period.

Yes. You are right that it would be helpful for organisations to be able to predict whether they are likely to have similar funding or on-going increases in funding.

My last point is about NHS boards. Are the 3 per cent recurring savings considered to be achievable for NHS boards? What conversations have you had with the boards about whether that is realistically sustainable for them?

Boards have been expected to make recurring savings for some time now, so it is not new to them and they are well practised in it. It is key to ensure that there is a focus on efficiencies in boards. We discuss that with boards regularly, at executive and non-executive level, to ensure that they are looking at expenditure to achieve efficiencies where they can. That is no different during this financial year, and in some cases it is more important than ever, given the very tight financial environment in which we are operating.

Given the level of expenditure that boards have—more than £14 billion of taxpayers’ money—it is important that we apply targets to them to ensure that they are driving efficiencies in the system where they can. That is not money that is lost to the system; it is money that is used in healthcare, but it allows us to ensure that we are getting as much efficiency out of the investment that we are making as possible. It is important that boards are given that challenge.

Finally, do boards indicate whether they have reached the point that that is becoming difficult for them? Do they say that they feel that they can continue to work at that 3 per cent level?

09:45  

I think that most boards would say that they would prefer not to have to do it, if they could, but it is important that we set that challenge for them in relation to driving efficiencies in the system. It is a bit like the four-hour wait target at A and E; taking that away would probably cause more problems, because it drives some of the systems. The 3 per cent is a way of driving boards to make sure that they are looking at their expenditure and where they can be more efficient.

Notwithstanding the challenges that go with achieving that, it is an important challenge that we put to them. We make sure that we hold them to account for that, given the huge amounts of taxpayers’ money that they are responsible for spending each year, and that they are doing that as efficiently and effectively as possible.

Can you unpick what that 3 per cent recurring savings point actually means? It is clear that the budget for health boards is increasing in cash terms and in real terms, but we are talking about 3 per cent recurring savings. I assume that that is on a like-for-like basis and the other money is going on additional stuff. Can you unpick that so that we know what that 3 per cent refers to?

To give you an idea of the scale of that, that is probably somewhere around £300 million to £400 million in cash terms. That recognises that there will be inflationary pressures for boards in some of the areas that we have mentioned. I will take drugs as an example. Inflation in drug costs in secondary care is rising at a significant rate, and it is important that boards have a focus on that, as well as on all the additional investment that is provided by the Government, and that there is an eye to that savings target.

In addition to the £500 million uplift that boards have received, there would normally be an expectation that they would make savings of 3 per cent. That is somewhere in the region of £300 million to £400 million.

I do not really understand that. You are giving health boards additional money in cash terms and in real terms every year, so when you talk about a 3 per cent saving, how does that manifest itself in the numbers? It is an increase, not a saving.

We do not take that 3 per cent off them.

How do you measure that? How do you know that they are making that saving if you are just giving them more money?

We get regular reports every month on board savings and savings plans. We allow for that money not to be returned to Government but to be retained within the system so that the board keeps any saving within its own system to invest in its priorities for that system, but we have oversight of where those savings are being made.

Okay. You need to be pretty hot on the process and the numbers to make sure that that is all on the straight and narrow—

Absolutely.

—because it is very easy to lose the numbers there.

As I have said, we get regular and detailed reporting on the clarity of reporting and the areas that boards are focused on, so that we understand that.

The implication is that boards are not only getting a 1.7 per cent increase in real terms but they are also getting a 3 per cent increase through those recurring savings, which is in excess of health inflation, in effect.

That is correct. If you can achieve more with your savings, that is better for you, because you can invest more locally.

I want to unpick this. If you look at the budget and go down to level 4, which is the lowest that we go, you will see the health boards’ individual lines. I am interested in understanding a wee bit below that, specifically the issues that are raised from time to time in relation to whether the health service is overmanaged and how much of the money gets spent on bureaucracy, administration, management and so on versus how much is spent on the clinical side and medicines. Do you have clear visibility on that by health board? Are those numbers available for analysis?

We do not publish that at the time of the budget, but the NHS cost book is published on an annual basis for the previous year. That sets out in detail what is spent across a range of category lines. The next update from Public Health Scotland, which publishes that data, will be in February. That will set out in detail the total spend that we have set out in the budget and where that money is going by individual line.

Okay. So you have visibility on that. I would be interested in seeing that.

Yes.

To what extent are health boards co-operating with one another to identify shared services and functions that they can combine, such as back-office functions, to reduce costs?

It is probably fair to say that such co-operation is variable. Some boards jointly commission services on a planned basis where they think that it is in their mutual interest to do so. That is on a voluntary basis—the boards can choose to co-operate in that way if they wish to do so—and there is a mechanism in place that they need to go through if they want to provide backroom functions such as human resources functions on a shared commissioning basis. I am making that approach mandatory. A range of boards probably could do more in relation to sharing some of their backroom functions, and we have already indicated to the boards that they are required to take that approach.

Good.

As I said, that will cover HR functions, including payroll, that can be managed jointly.

Okay. Thanks very much.

Good morning to the panel members. How can the twin pressures of increased pay and demands for additional staff be balanced in the NHS and in social care within the constraints of the budgets?

The staff are key to the health service, and it is important that we provide them with the financial recognition for the important role that they play. That is why, in the past financial year, we have progressed our agenda for change commitments; it also accounts for how we have engaged with staff on pay negotiations. The pay increase inevitably creates financial stress in, and challenge for, the system, but it is critical that we do that, because staff are key to the delivery of our health services. The increase will have to be met within the existing budget allocations that are set out in the 2024-25 budget.

On social care, a key aim of our additional investment of over £800 million in the past couple of years is helping to address the pay issues in social care settings. We know that pay is a major challenge when it comes to recruiting into social care, and we also know that social care is critical to the performance of our NHS. Therefore, if we want our health and social care system to function effectively, we must ensure that we provide resources where we can to pay staff for their important role. That is the approach that we have taken on negotiations and through the agenda for change programme in relation to pay for health and social care staff.

On higher NHS pay, what effect will that have on service delivery if non-staff budgets need to be reduced to fund the increased pay offer?

I am sorry—I missed the first part of your question.

What effect might the increase in NHS pay have on service delivery if non-staff budgets need to be reduced to fund the increased pay offer?

Okay. We can look at that in a number of ways. Yes, increasing staff pay places a challenge on the budget, but I do not grudge them that at all, given their important role. That means that it will not be possible to make some of the investments that we might want to.

However, the impact of not increasing pay for staff and not settling such types of issues is also very costly in financial and service delivery terms. If we were not able to reach a settlement on some of the pay deals, we would inevitably face industrial action, which we know has significant financial cost to the NHS.

Let us take the industrial action by junior doctors in England as an example. I think that that has cost more than a billion pounds as a result of all the additional measures that must be put in place to try to cover absences during such action. In addition to that, around 1.2 million appointments have been cancelled, which has an impact on overall service delivery.

We have to recognise that, if we do not invest in our staff and do not try to resolve those types of issues in a co-operative fashion, that can be hugely disruptive and very costly for the way in which the NHS is able to deliver its services. The approach that we have taken is to try to help to resolve those matters in a fair and reasonable way with the employee side, but that, of course, has a financial impact on wider service delivery. You may not be able to expand services in the way in which you would wish to, given the financial environment in which we are operating. Notwithstanding that, the way to invest in services is by investing in staff. I view pay uplifts for staff as an investment in our NHS.

I will stick with the social care budget. Forgive me—you mentioned some of this in your opening remarks, but I think that it is worth getting clarity for the record. What is the total level of planned spending on social care for 2024-25? How does that position compare with what the Scottish Government inherited in 2006-07? How does that increase compare with the received Barnett consequentials?

The total budget for social care in 2024-25 is just over £1 billion and, in 2022-23, it was £879.6 million. That is a £200 million-plus increase, which is a reflection of the additional investment that we are putting in to increase pay in social care.

I do not think that I have a figure on what we inherited. I would have to come back to you with that, because that goes back to the 2006-07 budget.

Are you able to tell the committee how that increase compares with the Barnett consequentials that the Scottish Government has received?

By and large, we do not get a Barnett consequential for social care. There is no direct Barnett consequential for that in the way in which there is for health.

Okay. It can be challenging to get clarity on the social care budget because of the way that the money flows between the Government, health services and local government. The Scottish Government committed to increasing spending on social care by 25 per cent over this parliamentary session. Can you remind the committee of the progress that has been made on that?

We have already met that target—we are ahead of schedule on it by two years, I think. That has already been delivered within this parliamentary session.

You have touched on the importance of social care for the whole system. We talk about health and social care separately, but the services are intrinsically linked, particularly from the perspective of patients. Good-quality services in the community often prevent hospital admissions, particularly those that are unscheduled. How does the Scottish Government make decisions about the appropriate balance between money going to social care and money going to other areas of health?

There are a couple of different routes through which money flows into social care. We provide funding to local authorities. Some health boards will invest in social care provision alongside some of the central funding that we provide for social care. That is largely for things such as pay uplifts. The scale of financial demand in health is markedly different from that of social care. Obviously, healthcare gets the lion’s share of the funding. We have made a deliberate decision to ensure that we increase investment in social care, particularly in staff, in order to increase or sustain the capacity of the service, because we know that it is under significant pressure.

10:00  

One of the things that it will be absolutely essential to deliver as part of our reform programme is a national care service through which we can ensure that there is a greater consistency of approach to the provision of social care and that that aligns with the NHS much more effectively. We can see variation across the country, and that impacts on how social care services are received by individuals who require social care support and on the performance of the NHS.

Going forward, we will need to see even further investment in social care, and we will also need to see service reform. A national care service is going to be critical to ensuring a much more consistent approach to how social care is delivered and provided in the country, and one that aligns much more effectively with the NHS and helps to support it. Further investment and service reform are going to be critical.

We are thinking about the budget. Will that service reform make it easier to move budgets and move resource into the community?

I do not know whether it will make that easier, but it will give us the ability to be much clearer about the outcomes that we are looking to achieve with that investment and the public expenditure that goes into social care, and it will give us the ability to seek to achieve much more consistency.

It has benefits for staff, such as allowing for collective bargaining, which I know is an important issue for trade unions. The creation of a national care service will be critical to supporting us to achieve a more attractive place for folk to work, greater consistency in how services are delivered, and better alignment with the needs of our NHS. It will also help us to get greater consistency in how funding is used and ensure that it is being used to achieve better outcomes for individuals who need to make use of those services, in a way that we do not have at the present moment.

I am aware that many members have not had an opportunity to ask questions yet. I will bring in Sandesh Gulhane to ask a brief supplementary question, and then Tess White.

Cabinet secretary, we were speaking about the national care service and you said that there is £1 billion in the social care budget. How much of that budget line relates to the NCS and how much relates to adult social care funding?

About £15 million is for the national care service.

I have a question about reinforced autoclaved aerated concrete. It is not clear exactly how many properties are affected by RAAC or what the remedial action will be. Can you give us an idea of the cost, based on surveys that have taken place to date, and how long the remedial action will take? Over what period will it be carried out?

Are you not aware of the work that Health Facilities Scotland has been taking forward? I think that 254 properties were initially identified in the desktop exercise. They all had an initial risk assessment, and work—including intrusive survey work—was carried out before the end of the year. An update on each of those projects was published online.

Are you aware of the cost and the timescales for remedial action?

Two hundred and fifty-four properties were identified as priorities. I think that only one property had to be vacated—actually, it was in the process of being vacated anyway. The vast majority of the others require only additional monitoring. That information is all publicly available. Health facilities Scotland has that on the NSS website, and each individual health board has published information on that as well.

Once health facilities Scotland had completed that work—as I stated previously, it was completed on time before the end of last year; I think that it was completed before the end of November—some additional sites were identified that were not previously known about. Some of those are not facilities that are directly owned by the NHS; they might be GP surgeries and so on. A programme of survey work on 100 or so such buildings is being taken forward. That information is all publicly available.

Are you able to give a figure for the costs and a timescale for remedial action?

The work that was carried out last year did not identify—

So there were no costs.

—any remedial work that was required, other than the normal routine maintenance work that boards do. Instead of surveys being carried out every three years, they are being carried out every year, and there are details on the types of things that should be taken forward. However, no major costs were identified from the survey work that was carried out by health facilities Scotland.

Just to confirm, there were no significant costs and there was no significant remedial action.

There were no significant works and there was no major disruption to services. In the few areas where work was needed, it was done as part of normal routine maintenance work.

Good. Thank you. My second question relates to the capital investment budget. In recent years, the work on designing and delivering hospital infrastructure projects has unfortunately been beset with delays, overspends and, sadly, an unthinkable tragedy at the Queen Elizabeth university hospital in Glasgow.

NHS Grampian has conceded that there are serious issues, as we have discussed previously, with the design of water and ventilation systems for the Baird family hospital and the Aberdeen and north centre for haematology, oncology and radiotherapy—ANCHOR—centre. Those issues have created significant pressure on the project budgets, but the health board has said that it is very difficult for it to quantify the financial impact of such issues. Can you confirm what headroom, if any, is available in the latest capital investment budget for the Baird family hospital and ANCHOR centre projects in order that they can be completed? Have such issues been factored into the budget?

The capital budget for the Baird hospital and ANCHOR centre projects is what was originally agreed. Within the overall project—

So there is no extra money.

There is no additional capital budget. Our capital budget has been cut by the UK Government by 10 per cent, and the construction costs for projects that are already in delivery have increased. We are trying to use the capital budget as fairly and reasonably as we can, but no additional money is available because of the cut that we have experienced alongside the construction inflation that projects face.

As you can imagine, that is extremely worrying. If no extra money is being provided for a hospital that has major design flaws, there will be serious questions about delays to completion.

NHS Grampian is taking the project forward. Through NHS Scotland assure, we will provide the health board with as much support and assistance as we can to ensure that it gets these things right and addresses any changes that have to be made. However, I am afraid that there is no additional headroom in the capital budget, given the cut to that budget by the UK Government. That has a direct impact not only on capital projects relating to health, but on capital projects right across the Scottish Government, so any additional costs will have to be met within the overall project budgets.

You are in control of the budget, but you are blaming the UK Government.

Our capital budget is dependent on the capital allocation that we get from the UK Government, which has cut our capital budget by 10 per cent. As a consequence, there is less capital funding available to invest in capital projects in Scotland. On top of that, we are experiencing significant challenges as a result of construction inflation. Indeed, some projects have almost doubled in cost as a result of the construction inflation that has been experienced over the past year to 18 months.

Not only are there increased costs for projects but, as a result of the UK Government’s decision to cut our capital budget, there is less money to invest in capital projects. That is a direct consequence of the decision by the UK Government to cut our capital budget.

Good morning, cabinet secretary. Preventative spend is often difficult to track and quantify, particularly once it goes into health board budgets, and the health benefits often take a long time to show up in population health data. How does the Scottish Government track and evaluate preventative spend? Do you believe that the data needs to be improved if we are to further target preventative spend?

There are a number of different ways in which we try to invest through preventative spend. It is normally around behavioural change programmes on things such as alcohol and drug use, eating habits and smoking. All of that work is about prevention and trying to reduce the health consequences that we experience as a result of those challenges. Much of that work is done through marketing campaigns and service delivery programmes, for which we fund the NHS boards. Many programmes will have targets. For example, smoking cessation programmes have a target for the number of people that they help to stop smoking. We are therefore able to monitor the progress that boards make against such targets.

We invest in a number of areas. For example, we are taking forward some innovations around type 2 diabetes remission, type 2 diabetes prevention programmes, the digital dermatology programme, vaccination programmes and artificial intelligence for lung cancer. We use all those programmes to help to do more in the preventative space through the use of innovation.

How have we identified some of the things that we have taken forward? We have a programme called the accelerated national innovation adoption pathway, which is run in partnership with the chief scientist office to identify areas for investment in preventative spend and things that we know will have a significant impact in improving outcomes. We use a once for Scotland approach to identify the most appropriate areas for investment in new technologies in NHS Scotland to support preventative spend.

We can evaluate those programmes as they are rolled out and as those investments are made. With the combination of programmes that we run and evaluate through health boards for preventative healthcare issues and the ANIA programme, we target innovations that we know can help to prevent ill health and improve outcomes for individuals, and we assess the most effective routes for making the investments and evaluating their impact.

It is sometimes difficult to achieve a shift to preventative spend when there is acute need in the system. I am pleased that a consultation on a public health supplement, which my party has long backed, has been proposed through the budget. Do you believe that such a measure could help to drive preventative spend?

Yes, I think so. There is always an ambition to invest much more in preventative healthcare where we can. That is challenging when we are in a very difficult financial environment and given the significant demand that services are facing. Notwithstanding that, however, we should do that where we have the opportunity. We have committed to exploring issues around a public health levy over the next year and I think that, if its introduction is agreed to, it would provide an opportunity for investment in other areas of preventative spend.

We should also recognise that innovation in technology can play an important part in some of the preventative approaches that we pursue. I mentioned the work on diabetes. New digital technology could have a real impact in reducing the side effects that people can experience as a result of diabetes and in helping them to live more healthily. We know that that will have a preventative effect in the future because of the benefits that come from it. We know that the use of AI in radiography can help to identify issues at an earlier stage and allow for earlier intervention, which could further reduce expenditure in the future.

Technology and innovation can play a really important part in ensuring that we do more in the preventative space, and any additional investment that might come through a public health levy in future years to support that would be very welcome.

10:15  

The cabinet secretary and I have had many conversations about vaping and its impact on health. Given how quickly novel products can affect health, what impact are they having on preventative spend budgets? Is the way in which we allocate those budgets flexible enough to adapt if those products are having an in-year impact on health?

I am not sure whether we have enough flexibility. That brings me back to the point that Carol Mochan made about the challenge that we face in giving organisations budgets to take programmes forward over the year that then have to be adapted and changed in year when we get information about something coming on to the market. I will have to think about what more we can do to allow some flexibility in that respect.

With regard to vaping, the sector has grown to quite a marked degree—indeed, it has grown exponentially—over the past number of years. It is associated not only with health issues but with environmental consequences, and there is a need for stricter regulation around it. In fact, we are taking forward the joint consultation with the other nations to look at what further restrictions should be put in place. There is no doubt in my mind about the need for proactive action on the part of Government in the preventative space.

I will take away your point about in-year flexibility, but I am conscious of some of the challenges that we face with regard to the way in which we fund organisations if we are looking for them to adapt in the course of a financial year.

That is okay. Thank you.

Emma Harper is next.

I want to pick up on Gillian Mackay’s question about preventative spend and the point about the diabetes-related work. In the previous session of Parliament, I was interested to find out that investing more in prevention would mitigate a lot of NHS spend. For example, the NHS spends £772 million on obesity-related conditions. What would happen if we could, up front, prevent or reverse type 2 diabetes or help to manage people’s weight?

I note that the Public Health Scotland budget was £56.3 million in the current year and that it is proposed to be £57.5 million next year, which represents an increase. Public Health Scotland is taking a whole-systems approach to diet and healthy weight, but it is not just the health budget that is impacted by these things. The social care budget also seeks to tackle poverty, which is part of what leads to, for example, poor diet. Is work being taken forward or happening that is not specific to one portfolio but brings in other portfolios to help to inform the action that is taken? What I am suggesting is that it should not just be up to the health budget to manage some of the challenges that we have in tackling poverty and managing weight; other portfolios should support that work, too.

The fact is that it is very often the NHS that has to deal with the consequences of lifestyles that result in ill health, but other services could do more to prevent such issues from arising. As the evidence shows, the investment that we are making in areas such as the early years is critical in helping to improve outcomes for children and young people. We have seen internationally that early years intervention is much more effective in helping to improve outcomes not just for children but later in life, too.

Our investment in approaches to tackling child poverty, such as the Scottish child payment, will help to reduce some of the risks that are associated with child poverty, which can have an impact on an individual’s health and their long-term wellbeing. There is also the best start programme. Those measures, some of which are health related and some of which sit in other portfolio areas, can have an impact in helping to improve health outcomes.

If we look at the disease tree of obesity and all the different branches that come off it, from cardiovascular and respiratory issues to diabetes and all its consequent issues, including neuropathy and so on, we can see that, if we tackle some of the root areas more effectively, we will head off some of the other health complications that are consequent to the condition. As I suspect you recognise, tackling obesity is critical to helping to reduce demand on cardiovascular, diabetes and some respiratory services and everything that goes with that, and doing so would have a preventative benefit in the future.

That said, the biggest risk that we have in tackling these challenges, particularly the health inequalities that we are experiencing, is that two key areas are moving in the wrong direction. Mortality rates are increasing and health inequalities are widening—as they have been for more than a decade now, largely as a result of austerity. All the evidence demonstrates that, as the social protection system is reduced, the impact that that has in increasing mortality rates and inequalities gets greater. We have been going through that in the past 10 years, which is why that data is going in the wrong direction.

There are certain things that we can do to try to mitigate some of that, but it is clear to me that the austerity that we have had for more than 10 years and the austerity that we are experiencing at an even greater level just now will result in people dying prematurely because of the impact that it has on the social protections that people depend on. It is probably one of the biggest public health challenges that we face going forward. If there is one thing that I would do to tackle health inequalities and their consequent problems, it is to tackle the economic policy around austerity. That would have the biggest impact in helping to reduce some of the very marked inequalities that have been expanding in recent years.

I forgot to remind everybody that I am a registered nurse with the Nursing and Midwifery Council. I should have said that at the beginning.

I want to come back to the detail of mental health expenditure. The Government’s long-standing target is to achieve a 10 per cent allocation of front-line NHS expenditure to mental health services by the end of the current parliamentary session. The current allocation sits at around 8.8 per cent, which represents an actual expenditure shortfall of £1.8 million. How does the cabinet secretary intend to achieve the target by the end of the parliamentary session under the current curve?

You are right that mental health services are about 8.8 per cent of our expenditure at present and I hope that we will have those services at 10 per cent by the end of this parliamentary session. That will depend on future budgets and the availability of finance, but it would certainly be our intention to do that. As I said earlier, however, there has been a very significant uplift in mental health expenditure since 2020-21. The level of Scottish Government investment in the area has more than doubled, but 10 per cent is still our ambition. We are at 8.8 per cent and we need to look at whether budgets in future years will allow us to continue the increase to achieve a 10 per cent allocation.

Cabinet secretary, you highlighted the longer-term increase in mental health expenditure. The 10 per cent target was set by the Government and progress towards it has stalled. It is certainly stalling this year and we are going backwards in real terms. Is there a high risk of not achieving the target? Is there a red flag against the target to say that we will be challenged to achieve it by the end of the parliamentary session?

It is a reflection of the difficult public financial environment in which we are operating. Although we are not able to make all the increases that we would like, we have made a significant increase in the past couple of years. Sustaining that in the present financial environment is really challenging. We have sought to protect mental health funding as best we can and to sustain the significant increase in investment that we have made in the past couple of years, but whether we will be able to increase that further will depend on budgets in future years. If the present approach to public finances continues, it will be really challenging to do that, given the pressures on public sector budgets right across government.

An area of particular concern that was mentioned earlier is the real-terms cut to drug and alcohol service budgets. I think that they are down 1.6 per cent this coming financial year, which represents a real cut of £100,000 or so. It might seem quite minor, but it is having a direct effect, such as the proposed closure next month of Turning Point Scotland’s 218 service in Glasgow, due to the funding settlement from the integration joint board in Glasgow of just £650,000, down from £1.3 million. That was described by Turning Point Scotland as unworkable, thus it is closing down the service, which will potentially impact women’s mental health and the recovery of people who are suffering from addiction and possibly also interacting with the justice system. I am also cognisant of preventative spending and the need to rehabilitate people.

Will the cabinet secretary consider engaging directly with Glasgow City Council and the health and social care partnership to find a way to possibly salvage the service, the loss of which could have a big impact on the healthcare budget? I know that the service interacts with justice, but it has a cross-cutting effect on healthcare as well.

I think that the 218 service came through the justice funding that went into IJBs; it was not from health funding. I am not entirely sighted on exactly what has happened with the justice funding. I think that it would probably go back to the old justice boards and the funding that was transferred across to IJBs, rather than coming directly from the health portfolio. I would imagine that it is a matter that the justice secretary would be able to respond on, because it is not something that sits directly in my portfolio.

That is a fair point, but would you, as a stakeholder, given the clear impacts on the healthcare system, make representations to your colleague to find a way through this?

I am more than happy to ask the justice secretary to respond to the issues that you have raised, given that it is a justice-led area rather than a health-specific area.

We made a commitment to invest an extra £250 million in the twin areas of drug and alcohol services over the course of this parliamentary session and we are on track to achieve that. That is an increase in investment over the past couple of years and we want to ensure that we continue to make progress with that.

It is down to local partners to determine how they think that funding should best be delivered at a local level. Some of the services that might operate around alcohol and drugs issues are not funded directly by the health portfolio—they sit in other portfolio areas. I am more than happy to ask the justice secretary to respond to the concern that you have raised about the 218 service.

That is very kind. I have a quick question on the issue that has been raised by NHS staff in Glasgow about safe staffing levels. Do you monitor where there are potentially dangerous levels of understaffing and target resource expenditure to ensure that there is a minimum safe staffing level across the healthcare system, particularly in acute hospitals?

We do not micromanage services on the ground within individual health boards, but, clearly, there is a requirement for boards to ensure that there are safe staffing levels. Where there are concerns, there is a mechanism for staff to raise them and escalate them within the board.

There is a lot of work going on around the safe staffing legislation that we introduced. If concerns have been raised with you directly by staff, they should escalate them through the local mechanism to ensure that they are addressed. My expectation is that boards would address such concerns and do so quickly.

To confirm, that is not something that would necessarily be escalated to your directorate or your department directly—if potentially dangerous staffing levels were flagged up, that matter would be contained at board level. I am just curious as to how the matter would be escalated up the chain.

It is an operational issue, so I would expect it to be dealt with by boards. They have a whole executive team, so if there was an issue around safe staffing in a particular ward, I would expect that to be escalated through the board’s local management structure—eventually, I presume, to the director of nursing and, if necessary, to the chief executive.

If a wider systemic problem was being experienced and it was brought to our attention, we would certainly want to raise that with the board. In terms of day-to-day operations, it would be the responsibility of the individual board to deal with the matter. However, if there was a wider systemic issue, I would certainly be concerned about that and I would want to take action if there was a problem in a board.

That is great; much appreciated.

I thank the cabinet secretary and Richard McCallum for joining us this morning. I will briefly suspend the meeting to allow for a change of witnesses for the next agenda item.

10:29 Meeting suspended.  

10:37 On resuming—