Today, I bring to the committee my annual overview report on the national health service in Scotland. It examines the performance of NHS boards during 2015-16 and comments on the challenges and pressures that face the NHS. It also looks ahead to assess what progress the Government is making towards delivering public service reform, including its ambition for everyone to live longer, healthier lives at home or in a homely setting by 2020.
Over the past decade, there have been real improvements in the way that health services are delivered: the time that patients wait for hospital treatment has reduced; treatment is safer; and hospital-related infections have dropped. Overall, people are living longer and are now more likely to survive conditions such as heart disease. Those improvements are testament to the hard-working staff of the NHS, who provide a vital service for all of us in Scotland. However, the health of Scotland’s population is relatively poor compared to that of other developed countries, and significant health inequalities still exist.
I have highlighted in previous reports the challenges that NHS boards face. They find it increasingly difficult to achieve financial balance and many used short-term measures to break even in 2015-16. The percentage of non-recurring savings has increased and, for the current year, boards are setting higher savings targets—the average is 4.8 per cent. The total planned savings are £492 million in 2016-17, which is 65 per cent higher than in 2015-16. That will put considerable pressure on the NHS this year, and there is a significant risk that some boards will not be able to remain within their budgets.
Overall, NHS spending is not keeping pace with the growing and ageing population, increasing demand and rising costs. NHS funding has increased each year since 2008-09, but the small real-terms increases of less than 1 per cent over that period have been below the general inflation rate and well below the higher health inflation rate, which was estimated at 3 per cent in 2016-17.
The committee might remember that we analysed the increasing demand for health and social care services in our report “Changing models of health and social care”. In the report that is before us, we highlight a range of cost pressures, including in relation to rising drug and staff costs, the achievement of national waiting times and new technologies. It is clear that the NHS cannot continue to provide services in the same way within the resources available. The Government has had a policy on shifting the balance of care for more than a decade and has published several strategies for reducing the use of hospitals and supporting more people at home, but most spending is still on hospitals and other institution-based care. Some progress is being made in shifting to new models of care, but it is not happening fast enough to meet the growing need.
My report sets out a number of recommendations to increase the pace of change, including having a clear plan with measures or milestones to allow progress to be assessed. There also needs to be financial modelling and a funding plan for the implementation of the strategy; a clear workforce plan to ensure that there are the right staff with the right skills for new ways of working; and continuing engagement with the public about the future of health services. The Cabinet Secretary for Health and Sport has accepted our recommendations and has committed to publishing by the end of the year a delivery plan that will bring together the various strands of reform that are under way, and I welcome that commitment.
Convener, my colleagues and I are happy to answer the committee’s questions.