Health, Social Care and Sport Committee
Pre-budget scrutiny 2022-23
Letter to Cabinet Secretary for Health and Social Care, Humza Yousaf to the Convener, 26 October 2021
Dear Cabinet Secretary,
Health, Social Care and Sport Committee: Pre-budget scrutiny 2022-23
I am writing to you further to the evidence we took on health and social care finance at a recent meeting of the Committee and in anticipation of the planned publication of the Scottish budget for 2022-23 on 9 December.
On 28 October, we took evidence on health and social care finance from the following witnesses:
- Siva Anandaciva, Chief Analyst at the King’s Fund;
- Professor David Bell, Professor of Economics at the University of Stirling;
- Leigh Johnston, Senior Manager at Audit Scotland; and
- David Walsh, Public Health Programme Manager at the Glasgow Centre for Population Health.
This session raised a number of important issues which we would like to draw to the Scottish Government’s attention and to see addressed in the preparation of the 2022-23 Scottish budget.
Preventative spend
As you will be aware, one of the key recommendations of the Christie Commission on the future delivery of public services, published ten years ago, was to divert more public funds towards preventative spend.
In this context, while recognising the long-term financial benefits of preventative spending in the field of health and social care, witnesses highlighted the significant challenge of prioritising preventative spend measures while also seeking to address pressure on acute services and backlogs in primary care resulting from the COVID pandemic.
Professor David Bell told the Committee that:
“…it is difficult to persuade managers that programmes that might not see successful outcomes for years are worth doing.”
Furthermore, Siva Anandaciva told the Committee:
“Currently, in almost every conversation that I am in, the elective care backlog – the waiting list for planned hospital care – takes almost all the oxygen in the room. That is for historical reasons and because that is where most of the data and performance targets are measured.”
Siva Anandaciva added that those preventative spend measures already in place are at high risk of being redeployed towards acute services at a time when those services are under particular strain:
“In this country, we have SPAs, or special programmed activities, which are basically my headroom, where I can think about changing my service. Those are the first thing that goes, because I am back on the backlog.”
As part of its budget for 2022-23, the Committee calls on the Scottish Government to demonstrate how preventative spend measures will continue to be appropriately prioritised as it proceeds to deliver its recovery plan for health and social care services in Scotland.
The Committee further calls on the Scottish Government to consider how the longer-term outcomes related to health and social care set out in the National Performance Framework can be given greater salience in determining future spending priorities.
Integration / National Care Service
Witnesses noted that one of the important long-term aims behind the ongoing programme of integration of health and social care was to shift resources away from acute services towards more preventative and community-based services.
At the same time, witnesses acknowledged that the backlog in primary and acute care created by the COVID-19 pandemic has made this difficult to achieve.
However, Leigh Johnston concluded by arguing that:
“…the pandemic offers a chance to do things differently, and we need to seize the opportunity to think about different and more sustainable ways of delivering things.”
Witnesses also emphasised the importance of investing in organisational development as a means of delivering the cultural change needed to allow things to be done differently and more sustainably in future.
With respect to future funding of the proposed National Care Service, Leigh Johnston highlighted six key areas of focus identified by Audit Scotland’s 2018 progress report on health and social care integration, namely:
- Commitment to collaborative leadership and building relationships
- Effective strategic planning for improvement
- Integrated finances and financial planning
- Agreed governance and accountability arrangements
- Ability and willingness to share information
- Meaningful and sustained engagement
Related to this evidence, the Committee notes that in its pre-budget report for the 2020-21 Scottish budget, its predecessor highlighted ongoing challenges with achieving integrated finances and financial planning as part of the process of integration of health and social care, stating:
“Four years into the integration process there is evidence that funding for integration authorities is still failing to ‘lose its identity’ and all become partnership funding as legislation intended. It is clear that improvements require to be made.”
As part of its 2021-22 pre-budget report, the Committee’s predecessor also identified continuing challenges in meeting the Scottish Government’s commitment that at least 50% of spending should take place in the Community Health Service, noting:
“Although only a modest change is required in order to meet the Scottish Government commitment, we have previously heard evidence about the challenges involved in even standing still against this measure, given the demographic pressures, rising demand and prescribing costs.”
The Session 5 Committee’s 2021-22 pre-budget report goes on to state:
“However, there appears to be an expectation that the coronavirus pandemic might have led to changes that could see progress in achieving this shift.”
The Committee requests an update on progress towards integration of health and social care in Scotland, including an update on the Ministerial Strategic Group for Health and Community Care recommendations and whether this group continues to monitor progress on financial aspects of integration.
The Committee would also welcome further detail on the proposed creation of a National Care Service and how it will be funded and how any proposals might overcome the challenges highlighted by the Committee’s predecessor whereby budgets for health and for social care continue to be managed and deployed independently of one another.
The Committee also requests an update on progress towards meeting the target that at least 50% of spending should take place in the Community Health Service, in particular an assessment of whether the experience of the COVID-19 pandemic has helped or hindered achievement of this target or would suggest that the target itself might need to be reviewed and revised.
Data and evaluation
A number of witnesses highlighted the importance of comprehensive, high quality data in enabling budgets for health and social care to be effectively targeted towards areas where that spending will have the greatest impact.
The Committee heard that, while some local areas already have access to the data necessary to make highly effective budget decisions, other areas lag far behind.
On behalf of Audit Scotland, Leigh Johnston said:
“…we have reported on a number of occasions that there is still a lack of data on what is happening in communities – for example, in primary care and in social care. Being able to show the outcomes of preventative approaches is important.”
In response to a letter from the Committee’s predecessor in May 2018, the then Cabinet Secretary for Health and Sport provided updated information on spending on mental health and alcohol and drug services and gave the following commitment as regards providing additional detail on these areas of spending in future:
“My officials will continue to engage with Integration Authority Chief Financial Officers on the content of these reports and will work to ensure that further updates to the Committee are provided as this detail becomes available.”
The Committee calls on the Scottish Government to set out what it is doing to improve availability of appropriate data and to develop improved evaluation methodologies to enable budgets for health and social care to be targeted as effectively as possible.
During the last Parliamentary session, the Scottish Government gave a commitment to provide more comprehensive data on spending on mental health and alcohol and drug services. The Committee would welcome an update on this.
Health inequalities
The Committee has heard evidence of the significant negative impact on health outcomes of widening inequalities across society.
David Walsh told the Committee:
“Even before Covid hit, we already had the widest health inequalities in western Europe, but they have become a lot wider on account of the past 10 years.”
David Walsh went on to highlight the crucial role of social and economic factors in affecting health outcomes and made the case for a minimum income as an important tool in tackling health inequalities.
David Walsh later highlighted the international policy review of health inequalities, commissioned by the Scottish Government from NHS Health Scotland in 2013, arguing:
“…the evidence is there about what works, so what is needed is political will and political bravery.”
The Committee requests an update on what the Scottish Government has done to apply the evidence gathered by the 2013 policy review of health inequalities to inform current spending priorities and details of any funding it is directing towards addressing health inequalities and how it will measure the impact of these interventions.
Allocation of funding to NHS Boards
Witnesses did not feel that a better alternative could be easily identified to the formula currently used to determine the allocation of funding to individual NHS Boards across Scotland that might be deemed fairer than the existing system. However, witnesses did suggest that there was scope for improved transparency in communicating the way the formula is applied.
Siva Anandaciva also argued that it would be at least as beneficial to look at how spending is allocated within individual NHS Boards as looking at the formula for distributing funding between Boards.
David Walsh also told us that improvements could be made to the formula in terms of how deprivation is measured and taken into account, concluding:
“…I think that there are potential tweaks around understanding aspects of deprivation that the current formula might not be picking up.”
The Committee notes that the Scottish Government has committed to reviewing the existing Resource Allocation formula (NRAC) and would welcome an update on this planned review, including how it intends to improve transparency in applying and communicating the formula for allocating funding to Scottish NHS Boards.
The Committee also calls on the Scottish Government to reflect on how measurement of deprivation might be improved as part of the current funding formula.
Budget setting
During the session, witnesses highlighted the challenge of making effective use of short-term, in-year changes to budgets. Siva Anandaciva told the Committee:
“One finance director compared that to their financial plan moving from a cliff edge to a cliff face, because money comes at short notice and suddenly has to be spent in a value-for-money way.”
In that context, witnesses all expressed a view that there is a need for a refreshed medium-term financial framework for health and social care.
Leigh Johnston suggested that such a framework was needed to help ensure long-term sustainability of NHS Scotland. She also emphasised the importance of engaging the public so there is an understanding of the change in how services are delivered that will be needed to achieve that long-term sustainability.
In this context, Siva Anandaciva suggested that, given current uncertainty about the path of COVID-19 and its impact on demand for routine services, a medium-term financial framework should be brought forward at the start of the 2022-23 financial year at the earliest.
The Committee requests an update from the Scottish Government on when it expects to bring forward an updated medium-term financial framework for health and social care.
Silo working
Witnesses also highlighted the danger of Ministers and their departments operating in silos rather than objectively assessing where spending should be focused across portfolios to have the greatest positive impact.
Professor Bell told the Committee:
“Silos and different ministers or different Government departments being responsible for spending their own money and not seeing that some of the resource that they are using would be better allocated to one of the other departments are a big issue.”
Leigh Johnston highlighted the importance of collaborative systems leadership in addressing this issue:
“...rather than thinking about the aims of a single organisation; thinking more about the outcomes that they are trying to achieve for their community; and effective strategic planning – linking resources to priorities and being able then to link those to the outcomes that they are achieving.”
The Committee calls on the Scottish Government to set out what measures it is taking to reduce silo working and ensure effective coordination and targeting of funding across portfolios to maximise improvements to health and wellbeing outcomes.
Impact of COVID-19
The Committee heard that the experience of the COVID-19 pandemic has had some positive effects on service delivery within health and social care, particularly in relation to the use of digital technology and more efficient use of shared resources, as well as wider societal benefits to health and wellbeing such as reduced travel times and associated emissions.
However, witnesses also argued that these benefits have been counterbalanced by other factors. Leigh Johnston told the Committee:
“…the vaccination programme, test and protect and the increased infection prevention and control measures, such as PPE, cleaning and social distancing, result in hugely increased costs, which will offset any potential savings.”
Leigh Johnston added:
“There is also the huge backlog of patients who will still need to be seen, and the investment required to progress digital technology will lead to increased costs and investment.”
In this area, Siva Anandaciva also highlighted the increased vulnerability to threats such as cyberattack that a shift towards digital and virtual consultations brought about by the pandemic could pose for the health and social care sector.
The Committee calls on the Scottish Government to set out what work it has been undertaking to ensure that the positive financial impacts for health and social care resulting from the COVID-19 pandemic can be sustained into the future.
The Committee similarly calls on the Scottish Government to outline what action it is taking to ensure that the negative financial impacts from COVID-19 with respect to health and social care are minimised over the long term.
The Committee calls on the Scottish Government to explain what investments it plans to make to improve long-term resilience of health and social care services against threats such as cyberattacks, where changes to working practices during the pandemic have resulted in those services being potentially more exposed.
More broadly, the Committee would also welcome an update on any plans by the Scottish Government to evaluate the changed models of service delivery that have been introduced in response to the pandemic.
In conclusion, the Committee looks forward to receiving a detailed response to the points raised in this letter in due course and to working with you constructively as you continue to develop the health, social care and sport budget for 2022-23.