NHS Tayside board 'misled' over finances, committee told

The NHS Tayside board was "misled" over the state of the organisation's finances, a Holyrood committee has heard.

Health chiefs faced a grilling by MSPs on the Public Audit Committee after the emergence of fresh financial irregularities at the troubled health board.

NHS chief executive Paul Gray said he was "very unhappy" about the situation but there had been "deliberate obscuring" of information from board members.

He told the committee he expected NHS Tayside to require a further loan from the government of between £9 and £12 million.

A review carried out by accountants Grant Thornton found that since 2012 the health board had "misrepresented" its financial performance by "holding" £5.3 million that had been allocated by the Scottish Government for eHealth initiatives.

The report found that in 2016/17 the health board effectively used the money that was being held to offset general expenditure, making its financial position look more favourable.

It concluded there was a "lack of openness, governance and wider transparency" over the transactions between 2012 and 2017.

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MSPs on the committee questioned why the irregularities were not picked up by the NHS Tayside board at an earlier stage and what questions had been asked by senior figures including chief executive Lesley McLay.

Mr Gray said: "I do not wish to present to the committee some analysis that says this is a good situation, it is not. It is something about which I think... to call it disappointed would be putting it mildly.

"These transactions were in my view carried out in a way which was intended to obscure them from the board of NHS Tayside and that is what happened.

"Checks and balances will deal with it up to a point but we're reliant on honesty and integrity."

Asked by SNP MSP Colin Beattie if that had been absent, he added: "I have said what the Grant Thornton report says, the knowledge was contained in a particular way and wasn't passed on."

Mr Beattie said: "So the board effectively was misled?"

"I would say so," Mr Gray replied.

NHS Tayside had already requested a £4 million loan from the Scottish Government in 2017-18 - on top of previous brokerage of £33.2 million it had received the previous year.

Mr Gray added: "As we close off the end of this financial year which we are now approaching my expectation is that I will provide brokerage to Tayside in the range of £9 to £12 million. That will take the overall brokerage into the 40 millions.

"Will we get it back? Do I have confidence? I have a strong expectation that we will get it back, my confidence will increase over time.

"Has it been detrimental to the rest of the NHS? No."

The committee heard the health board's director of finance Lindsay Bedford had been suspended and an internal investigation launched shortly before he decided to retire.

Defending her scrutiny of the board's finances, Ms McLay said: "There isn't anybody more disappointed to be here in front of the committee on this issue.

"There is a level of accountability, clearly I am the chief accountable officer, but I also delegate and there is a level that you have to trust."

Chairman Professor John Connell also expressed his "extreme disappointment" saying: "We would feel we have been let down and we have let down the committee."