Hansard

I wish to update Parliament on our decision to escalate NHS Grampian to stage 4 of the NHS Scotland support and intervention framework.

I once again acknowledge that staff in NHS Grampian continue to work tirelessly to deliver the high-quality healthcare that we expect. Our intervention is in no way a reflection on the excellent care and support that they offer local people each and every day, nor should we forget the significant health service innovations and improvements, which I have seen first-hand during visits to Grampian.

Indeed, the purpose of the intervention is to enable local staff to go further. We will do so by providing the right balance of scrutiny and support to stabilise the system, ensuring a robust basis for the wider local transformation that is required over the longer term. We are determined to do that in a way that is not detrimental to key, front-line services.

NHS Grampian has been experiencing significant financial and operational pressures for several months. That prompted the escalation of the health board to stage 3 of the NHS Scotland support and intervention framework for financial management in January this year.

Stage 3 is the first formal stage of escalation and, as such, NHS Grampian has been receiving a package of tailored support. However, significant concerns remain about the board’s financial position, plans, leadership and governance, and about any associated impact that they might be having on the delivery of local services.

We heard a number of those concerns during the members’ business debate on NHS Grampian that was secured by Douglas Lumsden on 22 April. At that time, I assured the chamber that I would keep the board’s escalation position under close review, and that, if required, I would not hesitate to act further in the best interests of local people.

Following careful consideration, the Government announced on 12 May that NHS Grampian’s escalation status had been raised to stage 4 of the framework for finance, leadership and governance.

NHS Grampian had the largest financial deficit of any health board in 2024-25. It reported a forecast outturn deficit of £65.1 million. Indeed, despite record funding of more than £1.34 billion in the current financial year, and the tailored support that is already offered under stage 3 of the framework, the board will be in receipt of cumulative brokerage from the Government in excess of £90 million across the past two years.

Concerns remain about future financial pressures for NHS Grampian, and there is insufficient confidence that the board’s current plans will arrest the rate of expenditure and deliver the sustainable recovery that is required. We cannot tolerate that position. It is therefore our judgment that further formal escalation is necessary. Along with the additional support and scrutiny that that will provide, we must seek to mitigate the significant financial risks to the local board and, more widely, the overall national health service.

Alongside financial management issues, NHS Grampian is being escalated due to rising concerns about local services. That includes the operational pressures that led the board to declare a critical incident for three days last November, diverting some activity to other board areas due to capacity constraints.

The board has since referred to a number of on-going “intolerable risks”, including with regard to its ability to respond effectively to persistent demand and pressures on local unscheduled and planned care.

The Government and the national centre for sustainable delivery have been engaging with and supporting the board for some time to help it to assess delivery and target sustained improvements in local unscheduled care performance. Indeed, I want to be clear that this is an escalation in support and scrutiny for NHS Grampian. As such, it will build on the previous support and improvement activity that has been undertaken.

The support provided to date has come from a range of providers, including the Government’s financial delivery unit and Healthcare Improvement Scotland. By way of an example, I note that the centre for sustainable delivery has provided bespoke clinical support to NHS Grampian and has identified opportunities that will support improvements. That includes a focus on reducing hospital occupancy to improve flow and reducing turnaround times for the ambulance service. There is the potential to build on the current local model of flow navigation, and work is under way with the board to develop that further.

I should reiterate that, by accessing extra funding from an additional £30 million national investment in planned care, NHS Grampian was able to deliver more than 23,000 additional appointments and procedures last year. We will continue to support the board in building on that work. Indeed, we are providing an additional £3.3 million to NHS Grampian in 2025-26 for two mobile MRI scanners and one mobile CT scanner. Those resources are set to deliver more than 19,000 additional scans over the course of the year.

Nonetheless, financial and operational issues persist, and it is right that we now act further. We heard in the recent members’ business debate on NHS Grampian about the long-standing demographic, demand and capacity pressures across the local health and social care system. We understand that those pressures will require a comprehensive local strategy to deliver the fundamental transformation that is required and that that will not happen overnight. The key focus of the further escalation will be to mitigate immediate concerns about the financial and associated operational pressures and to stabilise the local system.

Another concern that we heard during the members’ business debate in late April was about the leadership of the board, with the interim chief executive having announced his intention to retire earlier this year. I am advised that there is a strong shortlist of candidates for the chief executive post, with the final interviews scheduled for early June. As such, we are confident of making a successful appointment in the near future.

As I have said, the purpose of the intervention is to stabilise the system and provide a robust basis for the wider local transformation work that is required over the longer term and in support of the new leadership. One of the key initial elements of the package of enhanced support and scrutiny will be a whole-system diagnostic. KPMG has been appointed to carry out that work, and we expect it to report by the end of June.

The overarching goal of the diagnostic is to better understand how the whole system is operating and, in partnership with NHS Grampian, determine which changes the board could realistically effect within its financial envelope. The diagnostic will establish a shared, data-driven understanding of the current operation of the whole system and provide insight into the specific issues that NHS Grampian faces; review the existing service models and relationships with financial management, ensuring that assets are being optimised and care is being delivered effectively in the right place; and identify what further cross-boundary collaboration could take place with other NHS boards, particularly in the north of Scotland, to support NHS Grampian to mitigate its operational risks.

I am determined that the scope of the diagnostic and subsequent work will not be limited and that it should extend to all relevant areas of local service delivery and expenditure. The whole-system diagnostic will help to inform the board’s detailed improvement plan and the tailored package of scrutiny and support that will underpin it.

As with other stage 4 escalations in the past, the Government will establish an assurance board, which will report to the director general for health and social care and chief executive of NHS Scotland. That board, which will be chaired by a Scottish Government director, will be tasked with providing oversight of NHS Grampian’s progress against the specific actions in its improvement plan.

I also want to recognise the concerns raised in the members’ business debate about local management meaningfully engaging with, and properly listening to, front-line staff—a point that was alighted on in particular by Kevin Stewart, both in that debate and in his more recent topical question. Meaningful partnership working with local staff and their representatives will be necessary for NHS Grampian to successfully develop and implement its improvement plan.

We expect all boards, including NHS Grampian, to have robust systems and processes in place for engaging with and involving colleagues in their planning and strategies, in line with our NHS Scotland national staff governance standard.

NHS Grampian must work closely with its staff-side, trade union and professional organisation representatives in its area partnership forum to ensure that it listens and responds to concerns raised by staff and that their views help to inform future activity. Similarly, we expect the full engagement of local clinical views, not least through the NHS Grampian area clinical forum. The Government’s assurance board will look for evidence of that meaningful partnership working around the development and implementation of NHS Grampian’s improvement plan.

I hope that this statement assures members that we take the issues very seriously and that I will continue to keep them updated on the next steps, including on the specific actions required as part of the board’s improvement plan and the shape of the on-going support and scrutiny that will be provided by the Government.

I reiterate that we remain committed to supporting the new leadership of NHS Grampian to turn the position around. We need to mitigate the immediate risks around the financial and associated operational pressures that the board faces, and to help to stabilise the system. That will provide a robust basis for the wider local transformation required over the longer term, under the new board chief executive.

Foremost in our considerations of this matter must be the people who are served by NHS Grampian. I know that we are all united in wanting the very best for them.