Health chiefs slammed for £3m debt

MINISTERS have been urged to act to prevent any repeat of the fiasco that left a health board with more than £3 million of debt.

An investigation by the Scottish Parliament's audit committee, published yesterday, highlighted weak financial manage-ment at NHS Western Isles.

A former chief executive and chairman were singled out for criticism and the old Scottish health department was also blamed for contributing to and aggravating the situation, by failing to intervene sooner.

The report called for urgent action to resolve the "unacceptable" situation of the board having three chief executives, one suspended, one on secondment and one acting.

It urged Nicola Sturgeon, the health secretary, to consider carrying out a wider inquiry, a position backed by health unions.

Hugh Henry, the committee convener, said: "There is considerable anger and dismay, especially in the local community, regarding the failures in systems and management that have taken place within Western Isles Health Board over a number of years."

Ross Finnie, the Liberal Democrats' health spokesman, said: "The government must revisit how ministers and their civil servants monitor health board budgets. It's crucial that lessons are learned from this fiasco."

Ms Sturgeon has not ruled out a further inquiry, and said: "I will reflect on the audit committee report recommendation and take any further action I consider necessary."

The committee launched its investigation following a critical report from Robert Black, the Auditor General for Scotland, on the running of the board, which had run up a cumulative deficit of £3.36 million at the end of 2006-7.

The audit committee report said problems were "repeatedly raised in audit reports year after year without being resolved".

But it also said the Scottish Executive health department must bear part of the responsibility for the problems, as it had failed to grasp the significance of the problems early enough.

The report criticised Dick Manson, a former chief executive, and David Currie, a former chairman, who both left in 2006 after a task force was sent in by Andy Kerr, then health minister, amid accusations of mismanagement. Mr Currie resigned that day and Mr Manson was seconded to NHS National Services.

The report said they were "unconvincing witnesses" and that part of their evidence was "unsatisfactory and extremely unhelpful". It hinted action could be taken against Mr Manson.

The Unison union backed calls for a wider inquiry and said it hoped people would be held accountable for their actions.

John Angus MacKay, the board's current chairman, said it would take note of the report and take any necessary actions.

Mr Manson declined to comment, and the board said it could not comment on individuals.

Shades of Dr Finlay – as public money bled away

IT SERVES a small population and its £3 million debts are a drop in the ocean compared to the cost of Scotland's health service.

But the fiasco of NHS Western Isles has exposed flaws which raise questions over the management of Scotland's health boards and the spending of public cash.

Rapid changes in the NHS, heavy reliance on expensive consultants and a lack of adequate internal spending controls were among the factors blamed for the £3.364 million cumulative deficit faced by NHS Western Isles.

Yesterday's committee of MSPs recognised external cost pressures arising from the rapid implementation of changes in the NHS and in accounting practices reduced the financial flexibility previously available.

The board had also invested heavily in acute care services, with a high level of hospital provision and a big reliance on consultants. About £1 million was spent during 2003-4 on consultant locums in order to comply with the European Working Time Directive.

However, MSPs added: "The pressures that the board was under were exacerbated by serious weaknesses in the board's own internal control systems and financial management."

Their report said the lack of a fully costed clinical strategy hampered the ability of the board to manage its finances effectively. But it also points the finger at the then Scottish Executive health department for not ensuring the strategy was sustainable.

"The committee acknowledges that it is important for health boards to have effective control of their own affairs. However, where a board is clearly not performing, there should be a mechanism for the government to take swift action to resolve the situation."

One of the report's most damning criticisms is levelled at Dick Manson, the former chief executive, and David Currie, the former chairman. While they were in charge staff passed a vote of no confidence in them.

The audit committee said: "The committee is surprised that the former board chair and chief executive were unable to recall a crucial report which was made on the failures at the board.

"This was unsatisfactory, extremely unhelpful to the inquiry and leads the committee to regard their evidence as unconvincing."

It added: "The committee found Mr Manson and Mr Currie to be unconvincing witnesses in this respect."

In particular it called for an urgent resolution to the board's three chief executives. It was revealed in March that Mr Manson, who left the board in 2006, remains an employee and his salary is paid by the board.

However, it receives funds to cover his wages from NHS National Services Scotland, where he was seconded.

Laurence Irvine, who was suspended on full pay last September while an investigation is held into alleged CV discrepancies, is still being paid by the board. His interim replacement, John Turner, was seconded from the National Health Directorates, which is paying his wages.