Audit Scotland raises concerns over three Scottish NHS boards

An overspend at Raigmore Hospital in Inverness was a major reason for NHS Highland's financial difficulties

Scotland's financial watchdog has flagged up concerns about the accounts of three Scottish health boards.

In a report laid before the Scottish Parliament, Audit Scotland highlighted weaknesses in the financial management of NHS Highland and NHS Orkney.

It also raised concerns about a new IT system at NHS 24, which is likely to cost £23m more than expected.

The three health boards have received a total of £24m from the Scottish government to help them break even.

The report by Auditor General Caroline Gardner drew attention to problems and delays with NHS 24 implementing a major new IT system as part of its Future Programme.

Ms Gardner said the delays had significant financial implications, including a high risk of the board failing to achieve its financial targets from next year.

The report said NHS 24 planned to implement the Future Programme in September 2013, but this had now been delayed until at least October 2015.

'Significant weaknesses'

The board has invested significantly in the programme over the past four years, with the total cost to date standing at £38m, considerably more than the expected cost of £29.6m.

NHS 24 expects to incur further additional costs of £14.6m. The board has received £20.76m brokerage from the Scottish government since 2011/12 to help fund the programme.

Responding to the report, NHS 24 chief executive John Turner said: "NHS 24 is developing a programme to update our technology systems for the future. We are disappointed the system has not been implemented yet, but we will only deploy it when it is safe to do so. We continue to develop the system with our suppliers meantime.

"NHS 24 is working very closely with the Scottish Government in relation to the financial management of this programme.

"We would like to reassure the public that our current systems are working extremely well across Scotland, with the 111 service supporting more people than ever before and demonstrating public confidence in our unscheduled care service. People should not hesitate to contact NHS 24 if they need to make use of our services."

The Audit Scotland report also highlighted "significant weaknesses in financial management" at NHS Highland during 2013/14.

These weaknesses were a major factor in the board requiring brokerage of £2.5m from the Scottish government to break even.

Locum doctors

This was mainly due to overspend and weaknesses in financial management at Raigmore Hospital in Inverness. Other factors were increased spending on agency and locum staff, and meeting national waiting time targets.

Garry Coutts, chair of NHS Highland, said the report was taken "extremely seriously" and action was being taken to tackle any failings.

He said: "We note that it is reported that we advised the auditor that the full extent of overspending and weaknesses in financial control at Raigmore Hospital did not emerge until late 2013/14, following the appointment of a new management team in December 2013.

"We are confident that the hospital's new management team is working assiduously to address budget management issues there.

Audit Scotland said poor financial management at NHS Orkney had led to it receiving £1m brokerage from the Scottish government.

This was mainly required to hire locum doctors to cover vacant medical posts. There was a reliance on non-recurring savings by both health boards, which is not sustainable in the long-term, the report said.

And it said there were concerns about the capacity of the finance team at NHS Orkney to cope with further pressures.

Cathie Cowan, NHS Orkney's chief executive, said: "NHS Orkney met all its financial targets for 2013/14 by breaking even on both its revenue and capital budgets, whilst also receiving an unqualified audit opinion on the accounts.

"The board does however accept the recommendations in the AGS report and continues to work both internally and with the government in response to the issues raised on financial management."

'Absolute priority'

A spokeswoman for the Scottish government said the reports were taken "very seriously" and the government was working with the health boards to address concerns.

She said: "Protecting front-line health services is an absolute priority of this government, and that's why we have not only protected the NHS budget but increased it.

"However we must always strive to be as efficient as possible with taxpayers' money, and we welcome that health boards have met their financial targets for the last six years and exceeded their efficiency targets, allowing more than £1.5bn to be ploughed back into front-line services over the same period."

Scottish Liberal Democrat health spokesman Jim Hume called on the health secretary to explain how the NHS 24 IT project was "allowed to go so far off track".

He said: "Taxpayers face the prospect of paying millions of pounds more than was promised for improvement works that are now years behind schedule.

"The health secretary needs to come to parliament and explain how the government let this crucial project get so far off track.

"The SNP's record on the health service is one of underinvestment, missed treatment targets, bed shortages and now delays and massive overspends on NHS 24. They have let down patients, NHS staff and taxpayers alike.