tayside health board annual report and accounts for year

Tayside Health Board Annual Report and Accounts

For Year Ended 31 March 2019

NHS Tayside Annual Report and Accounts for the Year Ended 31 March 2019

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Tayside Health Board (Commonly known as NHS Tayside)

Annual Report and Accounts

For the year ended 31 March 2019

CONTENTS Page

Performance Report

1.1 Overview 2

1.2 Performance Analysis 5

Accountability Report

2.1 Corporate Governance Report 24

2.1.1 Directors Report 24

2.1.2 Statement of Accountable Officer’s Responsibilities 30

2.1.3 Governance Statement 31

2.2 Remuneration Report and Staff Report 41

2.2.1 Remuneration Report 41

2.2.2 Staff Report 49

2.3 Parliamentary Accountability Report 54

Independent Auditor’s Report 55

Financial Statements

Statement of Consolidated Comprehensive Net Expenditure (SOCNE) 59

Consolidated Statement of Financial Position 61

Statement of Consolidated Cash Flows (CFS) 62

Consolidated Statement of Changes in Taxpayers’ Equity (SOCTE) 63

Notes to the Accounts 65

Direction by the Scottish Ministers 127


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SECTION 1 PERFORMANCE REPORT 1.1 Overview

1.1.1 Statement from the Chief Executive

The 2018/19 financial year has been a year in which we have made significant progress as a Board. This is reflected in the financial outturn, the improvement in performance and changes that have been made to the leadership of the organisation. In February 2019, the Director General of Health and Social Care and Chief Executive of NHS Scotland (DG) appointed Assurance and Advisory Group (AAG) presented its final report in which it noted the positive steps that have been progressed towards developing a clear sense of direction and purpose for the organisation by NHS Tayside: a redesign of the existing business model with more visible clinical leadership and engagement, and a systematic and structured approach to building capability and capacity by the executive leadership team. I have spent time since being appointed in January meeting frontline staff and have been very impressed by their professionalism and the quality of care being delivered. I would wish to express my thanks and appreciation to all our staff and partners for their high quality work. The recent NHS Tayside STAR Awards demonstrated that we have many examples where our staff provide the highest quality of care to our patients. In relation to corporate governance, I would wish to acknowledge the work undertaken by our Chair who has led a number of system and structural changes during the year; including the establishment of the combined Performance and Resource Committee; a strengthened membership and remit for the Audit Committee; and the self-assessment of the effectiveness of the new governance arrangements against the Scottish Government Blueprint for Governance with the resulting action plan approved by the Board in April 2019. The introduction of a new model for clinical directorates to establish NHS Tayside as an aspiring clinically-led organisation is a further significant development I would wish to highlight. This model positions frontline clinicians to the fore of all clinical service planning and redesign, in order to drive and inform necessary changes in trans-sectoral health and social care across the whole of Tayside. This is in keeping with the original AAG Report, which reinforced the importance of clinical engagement and leadership going forward. In relation to financial performance our end of year overspend position of £17.5 million was less than forecast in the 2018/19 Financial Plan (£22.3 million) and includes the agreed repayment of £3.6 million to Tayside NHS Board Endowment Fund which was made in January 2019. The Board has made substantial improvements in controlling and reducing expenditure, with the monthly overspend reducing by over 40% from £2.0 million at the start of the year to an average of £1.1 million over the final four months. During the year the Board also fully co-operated with The Office of the Scottish Charity Regulator (OSCR) enquiry in relation to the Board Endowment Fund and the Trustees are now implementing the recommendations.

I would also acknowledge the huge amount of work which has been done across the organisation to improve our performance against key national standards and move forward with plans for maintaining quality and safety whilst bringing the organisation back into financial balance. The continued support of the Area Partnership Forum, the three Health and Social Care Partnerships and respective local authorities and the establishment of the Clinical Alliance have been critical to the progress that has been made.

There is lots of evidence of high quality care being delivered in Tayside and there is a real determination to deal with the challenges facing Tayside in an open and transparent way and a willingness to work together as an organisation.


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I look forward to working with the Board, Executive Leadership Team, our staff and partners in addressing

the challenges that we face and delivering the improvements that our key stakeholders and the people of

Tayside expect from us.

Grant Archibald Chief Executive

1.1.2 Background and Principal Activities NHS Tayside is one of the largest health boards in Scotland by general funding allocation providing

high quality health services from a number of acute sites and through a range of Primary and

Community Care services delegated to the three Integration Joint Boards (IJBs) covering Dundee,

Angus and Perth and Kinross. All our direct clinical services are supported by corporate functions

such as Facilities and Estates, eHealth, Finance and Human Resources. The IJBs are legally

constituted cross sector bodies providing a focus for NHS Tayside to work in partnership with other

agencies, including Local Authorities and Primary Healthcare contractors, in the provision of

integrated services to the local communities.


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Local

People in Tayside have told us what they value about their health services and what they need and

want from future healthcare. Through our existing service provision and the Board’s Transforming

Tayside programme we are responding to these needs as well as the national and regional policy

direction.

Like many other health and care systems across the UK, NHS Tayside is developing medium and

long term plans to sustain services in the context of growing demands and expectations to support

our population’s health in an equitable manner, and to deliver high quality and timely health and

care services for our communities.

During 2018/19 the Board spent £919 million providing the full range of health services to the

population of Tayside, as well as providing healthcare support and some specialist clinical services

to other NHS Boards, most notably North-East Fife.

As has been widely documented publicly, 2018/19 has been a year of progress for Tayside NHS

Board. With a new Leadership Team in place and a refresh of our Transformation Programme, we

have a real determination to address the challenges facing NHS Tayside and are committed to

doing so in an open and transparent way.

NHS Tayside has committed to achieving a position of financial balance by 31 March 2022.

Achieving financial balance will provide a platform for our ambition to tackle the complex needs of

our population in an ever-more integrated healthcare system which focuses on prevention and

shifting the balance of care from secondary to primary and community healthcare.

The dedication and professionalism of our staff is one of the key enablers to the delivery of the

integrated clinical strategy necessary to develop alternative models of care and ensure sustainability

of services in the years to come.

Health and social care integration remained an important element of our plans and we continue to

work closely with the three Integration Joint Boards (IJBs): Angus, Dundee and Perth and Kinross.

Through the IJBs we have continued to support investment in Primary, Community and Social Care,

in both revenue and capital terms, as these services continue to respond to challenges arising from

demographic change, strengthening the multidisciplinary team approach and encouraging greater

involvement of patients and the population as a whole to take responsibility for improving their

health.

Finally the Board remain fully committed to the partnership working philosophy and have welcomed

the support from the Tayside’s Area Partnership Forum and more recently the Professional Clinical

Alliance structure whose contributions have been invaluable in helping us develop workable

solutions throughout the year, specifically working alongside the senior members of the

Transformation Planning team in shaping and reviewing specific initiatives supporting the

Transformation Plan including efficiency plans, improvement plans and the Integrated Clinical

Strategy.


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National

The guiding national strategy context is provided by the Health and Social Care Delivery Plan

(December 2016). The guiding principles identified within this strategy are that we have a health

and social care system that is integrated; focuses on prevention, anticipation and supported self-

management; will make day-case treatment the norm, where hospital treatment is required and

cannot be provided in a community setting; focuses on care being provided to the highest standards

of quality and safety, whatever the setting, with the person at the centre of all decisions; and

ensures people get back into their home or community environment as soon as appropriate, with

minimal risk of re-admission. These principles are designed to assist in the delivery of the Scottish

Government’s Triple Aim for Health and Social Care:

Regional

The North of Scotland Regional Delivery Plan sets the regional planning context for NHS Tayside

and its regional partners and follows the development of the principles included in the National

Clinical Strategy with a key focus on working collaboratively with our partners from the other five

Health Boards in the North Region .

1.2 Performance Analysis

1.2.1 Background

Tayside Health Board is responsible for improving the health of the local population in the

geographical local government areas of Angus, Dundee and Perth and Kinross and for delivering

the healthcare services its population needs.

We are the fifth largest health board in Scotland by general funding. Our net operating expenditure is

over £919 million with capital investment of c£13 million.

We employ around 15,000 staff and provide a comprehensive range of primary and community

based and acute hospital services for the populations of Dundee, Perth and Kinross, Angus and

North East Fife, and work with three Integration Joint Boards (IJBs) in the provision of integrated

services to local communities. The IJBs are legally constituted cross sector bodies that provide a

focus for us to work in partnership with other agencies including local authorities and primary care

contractors in the provision of integrated services. Executive and non executive directors of NHS

Tayside are members of the IJBs which provide the strategic direction for the integration of adult

health and social care.


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The Board’s Transforming Tayside programme, Annual Operational Plan and Strategic Risk

Register set out the key priorities for Tayside NHS Board in future years and how these will be

mitigated. Delivery of these plans will support the continued delivery of quality clinical services and a

high standard of operational performance, whilst remaining in financial balance and achieving our

financial targets.

Key identified risks include the impact of changing demographics with both overall population

numbers and the proportion of elderly in the population rising year on year and this trend is forecast

to continue.

Our aims, objectives and priorities are set out in Transforming Tayside 2019-22 and are set our

below:

Aim

It is our aim to deliver longer-term aims aligned to the Scottish Government’s ‘triple aims’: Better Health, Better Care, Better Value. NHS Tayside has added a fourth aim to achieve local delivery plans and transformational change, Better Workplace.


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Objectives

Our shorter-term objectives will deliver improvements to everyone who uses our health and social

care services across Tayside within the budget allocated to us.

By 2021: We will deliver safe, accessible, integrated, high-quality services to national standards. By 2022: We will deliver financial sustainability and a balanced budget.

Priorities

To deliver our short-term objectives, we will focus on four priorities:

Improve access to high-quality care and reduce waiting times in a sustainable way

Step up the pace of integration and improve the effectiveness of our partnerships

Improve access to, and invest in, mental health services

Improve access to, and invest in, primary care services 1.2.2 Financial Performance and Position

Financial Performance and Position

These financial statements consolidate the results of Tayside Health Board and Tayside NHS Board Endowment Fund using merger accounting in line with IAS 27 and the three IJBs, as joint ventures, in line with IAS 28. The basis of the consolidation is explained in more detail in Note 1 Accounting Policies. The results of each partner organisation, although consolidated within our financial statements for accounting purposes, do not form part of the statutory financial targets set for NHS Boards by Scottish Government and are therefore not taken into account when considering the Board’s in year financial performance.


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Financial Targets NHS Boards are required to meet three financial targets in-year: a Revenue Resource Limit, a Capital Resource Limit and a Cash Requirement. The Revenue and Capital Resource limits are further analysed into Core and Non-Core where Non-Core represents items of expenditure which are of a technical accounting nature, details can be found on the Statement of Resource Outturn. These include items such as capital grants, depreciation, impairments and creation of provisions. NHS Boards are expected to contain their net expenditure within these limits and report on any variation from the limits set. Following a request for financial brokerage of £17.6 million and agreement to this by the Scottish Government Health and Social Care Directorate, Tayside Health Board achieved all three financial targets for the year, reporting an outturn against these set limits as follows:

Financial Target Limit as set

by SGHSCD

Actual

Outturn

Variance

(Over)/Under

£’000 £’000 £’000

1 Core Revenue Resource Limit 848,834 848,706 128

Non Core Revenue Resource Limit 31,721 31,721 0

2 Core Capital Resource Limit 13,089 13,061 28

Non Core Capital Resource Limit 2,306 2,306 0

3 Cash Requirement 904,450 904,450 0

Memorandum for in-year outturn £’000

Reported surplus against in year total Revenue Resource Limit 128

Brought forward surplus from previous financial year (180)

Deficit against in-year Revenue Resource Limit (52)

In relation to financial performance our end of year overspend position of £17.471 million was less than forecast in the Annual Operation Plan (£22.3 million) and includes the agreed repayment of £3.6 million to the Endowment Fund which was made in January 2019.

In October 2018, the Cabinet Secretary for Health and Sport announced the new three-year financial planning and performance framework for our NHS territorial boards in return for their efforts to deliver the required reforms for the future. Under the ‘new deal’ NHS Boards will be able deliver a breakeven position over a three-year period, rather than annually as is the case currently.

In each year, NHS Boards will have a 1% flexibility on their annual resource budget to allow them scope to marginally under or over spend in that year. As part of this ‘new deal’ it was confirmed that Scottish Government will not seek to recover NHS territorial boards’ outstanding brokerage over the last five years (to 31 March 2019) which has been above their budget. This announcement was welcomed as it will enable the Board to focus its attention on delivering the measures set out in the Health and Social Care Delivery Plan and to maintain a strong focus on patient care and the delivery of the services to patients that is safe, effective, person-centred and timely.


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Review of performance

Summary

The following is a summary of high-level figures for 2018/19:-

The Board has made substantial improvements in controlling and reducing expenditure, with the monthly overspend reducing by over 40% from £2.0 million at the start of the year to an average of £1.1 million over the final four months;

efficiency savings confirmed for the year total £32.0 million, which over-delivers by £2.6 million on the financial plan target of £29.4 million;

the level of recurring savings identified and delivered, which is a key indicator of financial sustainability, was 44% (36% last financial year); and

looking forward to next financial year, the Board’s underlying recurring deficit has reduced from £32.0 million to £26.0 million.

It is worth noting that the outturn figure of £17.5 million includes two significant one-off items:-

transfer of reserves (£6.1 million) to IJBs at the start of the financial year, and

the repayment to endowment funds of £3.6 million.

A high level summary of the year-end revenue position is noted below, comparing this year with

last:-

2018/19 2017/18

Operational performance - overspend £7.8m £12.7m

Repayment of funding to endowment fund £3.6m -

Allocation of earmarked funding allocations to Integration Joint Boards £6.1m -

Net overspend at end of year £17.5m £12.7m

Adjusting for one-off factors shows an improvement in operational performance of c£5.0 million from

the previous financial year.

This reflects the Board’s continued focus on improved governance, financial control and monitoring

of operational performance.

1.97 1.97 1.914

0.941

1.535 1.435 1.642 1.547 1.456

0.684 0.725

1.606

0

0.5

1

1.5

2

2.5

Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar

£m

NHS Tayside Monthly Overspend

In Month Overspend Average In Month Overspend


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We would highlight the following specific operational areas:

Patient Access & Assurance Division (£2.544 million overspend) due to prescribing costs being higher than forecast within Oncology & Haematology and non-compliant junior medical rotas.

Medicine Division (£2.037 million overspend) - due to core nursing pay being higher than forecast and cost of non-compliant medical training grade rotas. These overspends are partly offset by operational savings from biosimilar products and reduction in use of nurse agency staffing.

Surgical Division (£0.450 million underspend) – we welcomed the additional waiting times funding from Scottish Government which has enabled the Board to accelerate its improvement actions and reduce the number of patients waiting for a first new outpatient appointment or treatment.

Health and Social Care Partnerships – The main areas of financial pressure impacting on all three IJBs are primary care prescribing and in-patient mental health services. Both Angus and Dundee IJB positions have reported a breakeven position, with Perth showing an overspend of £0.3 million.

Other (£3.754 million overspend) – due to the cost of patients referred outwith Tayside, both to other Health Boards and to private providers, mainly for complex mental health conditions.

Statement of Financial Position

Trade and Other Receivables At 31st March Tayside NHS Board was due trade and other receivables of c£67 million (2018 c£78 million). This included c£10.7 million from other NHSScotland Boards and c£40 million from the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS) scheme. The trade and other receivables figure includes a provision for impairment on receivables of £1.4 million.

Outstanding Liabilities At 31st March Tayside NHS Board had outstanding liabilities of c£192 million (2018 £179million) in trade and other payables. This included c£3 million to other NHSScotland Boards, c£11 million to Family Health Service Practitioners, c£10 million to HMRC, c£12 million to other public sector bodies and £107 million in PFI/PPP contracts. This reflects normal timing of settlement of liabilities.

Legal Obligations The Board brought forward a provision for Clinical and Medical Negligence at 1 April 2018 of £51

million. Based on information provided by the Central Legal Office (CLO) this has decreased to £40.9 million at 31 March 2019. The provision for new claims arising during the year and increases to the provision for existing claims totalled £4 million. Utilisation of the provision during the year amounted to £4.9 million and unutilised provisions of £9.4 million were reversed. The Board also provides for its respective share of the total liability of NHSScotland as advised by the Scottish Government, based on information prepared by NHS Boards and the Central Legal Office, which amounts to £44 million. Based on CLO information, the Board has provided £0.4 million (2018 £0.4 million) in respect of other items including third party liabilities. Gross quantifiable contingent liabilities are assessed at £7.1 million (2018 £12.3 million). This is partly offset by contingent assets of £6.1 million (2018 £11.6 million).


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Risk factors applied to the CLO’s estimated liability in determining the level of provision and contingent liability are detailed in Note 1, section 17. The provision for pensions, which relates mainly to injury benefit payments, increased from £8.24 million at 1 April 2018 to £8.28 million at 31 March 2019.

Significant Changes to Infrastructure and Non-current Assets. The total capital programme resulted in an investment in infrastructure of £16.306 million. This includes direct capital expenditure (£13.410 million), capital grants (£0.141 million) and non added value (NAV) expenditure (£2.755 million). Investments made during the year included

£3.8 million on statutory compliance and backlog maintenance projects across the estate;

£5.8 million on medical equipment and £2.3 million on IM&T.

£1.0 million on major projects being taken forward on the Ninewells Hospital site;

£0.7 million in relation to the Major Trauma Centre, Ninewells Hospital;

£0.6 million on non-medical equipment;

£0.5 million on the redesign and refurbishment of Lochee Health Centre;

Donated asset additions for the year are estimated at £0.111 million.

In addition the non-core capital expenditure for the year was £2.306 million in relation to the NHS Scotland Pharmaceuticals Specials Service project.

Public Finance Initiative/Public Private Partnerships/Non Profit Distributing The Board has entered into the following contracts which are on balance sheet under International Accounting Standards.

Carseview Centre: The Carseview Centre is located on the Ninewells Hospital site in Dundee and provides in-patient facilities for Adult Psychiatry and Learning Disability. The estimated current capital value of the scheme is £12.5 million. The contract start date was 11 June 2001 and the contract end date will be 11 June 2026, when NHS Tayside may negotiate a further contract or purchase the facility.

Whitehills Community Care Centre: Covers Forfar, Kirriemuir and the surrounding area in conjunction with Angus Council and Lippen Care. The estimated current capital value of the scheme is £20.9 million. The contract start date was 21 March 2005 and the contract end date will be 21 March 2030, when NHS Tayside will become the owners of the facility.

Mental Health Projects: The Board reached financial close on 18 June 2010 with the private sector developer of the Mental Health development project, which delivered new facilities in Tayside for General Adult Psychiatry, Psychiatry of Old Age and Low Secure Forensic Psychiatry, together with a Medium Secure Forensic Unit serving the North of Scotland region. The project uses the Non Profit Distributing model of funding. The first phase of the project, the Susan Carnegie Centre (current estimated value £15.5 million), was accepted on 2 December 2011. The second phase at the Murray Royal Hospital site in Perth (current estimated value £66.8 million) was handed over on 1 June 2012. The contract end date will be 17 May 2042, when NHS Tayside will become owners of the facility.


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NHS Tayside, along with the participating partners in the East Central Territory of Tayside, Fife and Forth Valley (Health Boards, Local Authorities, Police, Ambulance and Fire and Rescue Services) reached financial close with the Amber Blue Consortium (Amber Infrastructure Ltd, Robertson Capital Projects Ltd and Forth Holdings Ltd) on 8 February 2012 to form Hub East Central Scotland Ltd. The company, owned by the public sector partners (30%), Scottish Futures Trust (10%) and the private sector partner (60%), is the procurement vehicle to deliver primary healthcare and community facilities as part of the hub initiative. The NHS Scotland Pharmaceuticals Specials Service is being procured as a Design, Build, Finance and Maintain (DBFM) contract. Financial Close for this project was achieved on 22 December 2016. The construction phase was completed in March 2019, with the new facility becoming operational in late 2019. The contract end date will be 14 December 2043, when NHS Tayside will become owners of the facility. The estimated current value of the facility is £23.3 million.

Payment Policy The Scottish Government is committed to supporting business in the current economic situation by

paying bills more quickly. The intention is to achieve payment of all undisputed invoices within 10

working days, across all public bodies. The target has been communicated to all non-departmental

public bodies, who are working towards the accelerated payment target of 10 working days.

Prior to this, the Board did endeavour to comply with the principles of The Better Payment Practice

Code by processing suppliers invoices for payment without unnecessary delay and by settling them

in a timely manner. The tables below show the Board’s performance calculated by reference to

invoice receipt date and relating to trade suppliers only:

2018-19 2017-18

Average credit taken 11 days 13 days

2018-19 2017-18

Invoices Paid Volume Value Volume Value Within 30 days 92.5% 91.7% 90.8% 88.7%

Within 10 days 84.7% 76.4% 77.4% 72.1%

Pension Liabilities

The accounting policy note for pensions is provided in Note 1 to the Accounts and disclosure of the

costs is shown within Note 19 and the Remuneration and Staff Report.

Prior Year Adjustments

There have been no prior year adjustments in the year.

Events after the end of the Reporting Period

There have been no events after the reporting period that require to be disclosed.

Fraud, Bribery and Corruption NHS Tayside takes its anti-bribery and corruption responsibilities very seriously. Statements have

been included in the Members’ and Employees’ Conduct and in the Fraud and Commercial

Sponsorship Standards sections of the Code of Corporate Governance. Awareness sessions have

also been set up with the support of Counter Fraud Services to ensure that an anti-bribery and

corruption culture is embedded in the organisation.


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1.2.3 Performance against Key Non Financial Targets Each NHS Board is publicly accountable for the delivery of key aspects of financial and service

performance that underpin the delivery of Scottish Government’s key outcomes and Health and

Social Care Directorates strategic objectives.

NHS Tayside routinely scrutinises a suite of statistical data and key metrics that allows continuous

monitoring and reporting of activity to ensure the delivery of standards and performance measures.

The aim being to give Ministers, staff and the public the confidence in our ability to make progress in

implementing our key strategies for NHS Scotland and improving the quality of patient care.

Performance is reviewed through our Performance and Resources Committee and considered at

each Board meeting. These reports are available on our website by accessing committee papers,

however from July 2019, these reports will also be available on a dedicated Performance page of

our website, alongside information for patients on our waiting times and weekly activity.

The following information summarises performance against key national indicators and safety measures using the most up to date information available at the time of writing. Safe – Local Delivery Plan Standards

The latest published National ‘Quarterly epidemiological data on Clostridioides difficile infection,

Escherichia coli bacteraemia, Staphylococcus aureus bacteraemia and Surgical Site Infection in

Scotland.’ is for Quarter 4 (October to December) 2018 and was published on the Health Protection

Scotland website on 2 April 2019.

Cleanliness and good clinical practice are high priorities for NHS Tayside. The Board participates

fully in the Scottish Patient Safety Programme, which aims to improve the safety and reliability of

healthcare and reduce harm, wherever care is delivered and receives regular reports on all aspects

of Healthcare Associated Infection. Performance including rigorous auditing of compliance with hand

washing and cleanliness is closely monitored by the Care Governance Committee.

Performance against Local Delivery Plan standards is summarised below:

Measure Performance

Clostridioides difficile

(formerly known as

Clostridium difficile) infections

(CDI)

Rates of Healthcare Associated, as well as Community Associated, Clostridioides difficile Infection (CDI) in NHS Tayside for the year ending December 2018, show a statistically significant reduction when compared with the year ending December 2017 and excluding the rates for the Island Boards and the National Waiting Times Centre – NHS Tayside had the lowest infection rate for Healthcare Associated CDI in Scotland.

The NHS Tayside Community Associated CDI rate was the

lowest rate reported of all 14 Boards in Scotland for Quarter 4 (October – December) 2018.


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Staphylococcus aureus

bacteraemia (SAB) infections

In Quarter 4 (October-December) 2018, NHS Tayside Healthcare Associated Staphylococcus aureus bacteraemia (SAB) infection rates were below the National Average for a fourth consecutive quarter. The NHS Tayside Healthcare Associated Staphylococcus aureus bacteraemia infection rate was also less than the national average for the year ending December 2018. Data suggests that targeted improvement work in the past year is having an impact in reducing Healthcare Associated (HAI) SAB infection rates. Community Associated Staphylococcus aureus bacteraemia infection rates for both Quarter 4 and for the year ending December 2018 were above the national average. The Infection Prevention and Control Team are working closely with Health and Social Care Partnerships across Angus, Dundee and Perth and Kinross to identify any interventions to decrease infection rates. NHS Tayside is however not achieving the Local Delivery Plan Standard of 0.24 or less cases per 1,000 acute occupied bed days.

The graphs below illustrate the trend in Clostridioides difficile and Staphylococcus aureus

bacteraemia rates from October 2017 to December 2018.


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Source: NHS Tayside Infection Prevention and Control Team

In the Health Protection Scotland Healthcare Associated Infection Annual Report 2018, NHS

Tayside was above the 95% confidence interval upper limit for community associated

Staphylococcus aureus Bacteraemia cases and is not considered an outlier.

Safe – Other Performance Measures

Hospital Standardised Mortality Ratio (HSMR) is a measure of mortality adjusted to take account of some factors known to affect the underlying risk of death. The HSMR used in Scotland is based on all Scottish inpatient and day-case patients admitted to all specialties in hospital. The calculation takes account of patients who died within 30 days of admission and includes deaths in the community as well as hospital. If an HSMR is less than one it means the number of deaths is fewer than predicted.

Measure Performance

Hospital

Standardised

Mortality Ratio

(HSMR)

In the quarter ending December 2018 for NHS Tayside the HSMR was 0.80, this remained below 1 for the 11th consecutive quarter stretching back to April 2015. Ninewells recorded as 0.75, PRI recorded as 0.76 and Stracathro recorded as 2.21 for the same quarter.


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Source: Discovery HSMR Dashboard Publication date 15th

May 2019

The HSMR allows boards to assess progress with reducing mortality over time and is calculated by identifying the risk of dying for particular patient subgroups (e.g. age, sex, admission type, severity of illness etc.). This risk is then applied to corresponding subgroups to calculate how many deaths would be predicted to occur if the standard level of risk was applied. This predicted figure is then compared with the actual observed deaths that did occur to give the standardised ratio – HSMR = observed deaths/predicted deaths. If an HSMR value is less than 1, this means the number of deaths within 30 days of admissions for a hospital is fewer than predicted. If an HSRM value is greater than 1, this means the number of deaths within 30 days for a hospital is more than predicted.

The process is not primarily designed to compare hospitals and care should be taken when interpreting HSMR. An HSMR of more than 1.0 does not necessarily conclude that these deaths were unavoidable/unexpected or attributed to failings in the quality of care. This can only be determined by a local case-note review. Similarly, an HSMR of less than 1.0 should not immediately be interpreted as depicting good performance. This must be taken into account with information from other key indicator sources.

Effective – Local Delivery Plan Standards

Measure Performance

People diagnosed and treated in

1st stage of breast, colorectal and

lung cancer (25% increase)

In Tayside 25.2% were diagnosed at stage one for

Breast, Colorectal and Lung cancer in 2016/2017. This is

below the rate of 25.3% across Scotland.

Source: Scottish Government Published Data


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Responsive

NHS Tayside is expected to deliver against a range of access time standards and efficiency

measures. Performance against selected key indicators is summarised below. During 2018/19 we

have worked hard to deliver high quality and safe services. We have worked closely with Scottish

Government throughout the year and there has been considerable work undertaken at specialty

level to understand the service demand from our aging population and to maximise service capacity

and efficiency whilst recognising key workforce and financial challenges. This included a planned

reduction in elective activity over the winter period and other peak holiday periods. We enter

2019/20 with knowledge of the gap in provision facing us and are exploring a range of options to

make the best use of available resource with a significant focus on improving productivity and

redesigning services.

Responsive - Local Delivery Plan Standards

We have set out below a summary of our performance against the commitments set out within the

Local Delivery Plan for 2018/19.

12 week inpatient/daycase Treatment Time Guarantee (TTG)

The chart below illustrates the percentage of patients who were waiting greater than 12 weeks for an

inpatient / day case procedure, by month, from April 2018 to March 2019. The graph also illustrates

performance against the trajectory submitted to Scottish Government for the period April 2018 to

March 2019 and shows that whilst there was a deterioration in performance during 2018/19,

performance was above trajectory.

Out-Patients 12 Week Stage of Treatment

The chart below illustrates the percentage of patients who were waiting greater than 12 weeks for a

new outpatient appointment, by month, from April 2018 to March 2019. The graph also illustrates

performance against the trajectory submitted to Scottish Government for the period April 2018 to

March 2019 and shows that whilst there was a deterioration in performance during 2018/19,

performance was above trajectory.


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Source: NHS Tayside Business Unit

A key focus for 2019/20 is realising areas for improvement, as well as planning the service redesign

to transform care in the medium to long term. In October 2018 the Scottish Government announced

The Waiting Times Improvement Plan which sets out the aim of “substantially and sustainably”

improving waiting times for outpatient and inpatient appointments, as well as day cases, by Spring

2021. Within this there are staged standards that NHS Tayside is required to meet to achieve the

aim by 2021. A local waiting times improvement plan has been produced to reflect this aim and

outlines what NHS Tayside will achieve by becoming more efficient and productive and what will be

required in terms of additional investment to achieve this.

Improvements in Productivity and Efficiency are closely aligned to the Transforming Tayside

programme and are being taken forward through the various projects under this umbrella.

Cancer Access Times

During 2018/19 NHS Tayside has had ongoing challenges in delivering the two cancer access

standards and overall performance remains poor relative to other Scottish Health Boards.

Measure Performance

Cancer Access 31 Day Standard As at end March 2019 for NHS Tayside the Cancer Access 31 Day Standard was 92.6%, compared to performance of 92.6% as at the end March 2018 this remains below the 95% target.

Cancer Access 62 Day Standard As at end March 2019 for NHS Tayside the Cancer Access 62 Day Standard was 89.4%, compared to performance of 94.8% as at end March 2018 this remains below the 95% target.



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There have been ongoing challenges relating to a number of cancer sites, primarily: lung; colorectal;

urology and breast. Steps have been undertaken to improve performance in these areas. Key to

this is gaining a better understanding of the pathways and areas within them causing bottlenecks

and leading to delays. Additionally, a cancer waiting times improvement plan has been compiled

and included within our waiting times improvement plan which will be submitted the Scottish

Government.

We have also been working closely with other Scottish Boards to share and learn from good practice

within this area and this collaboration is proving to be fruitful in terms of understanding how to

manage waiting times in a patient centred way and providing examples of where improvements

have been successfully implemented.

18 Week Referral to Treatment

During 2018/19 NHS Tayside has had ongoing challenges in delivering the 18 Week Referral to

Treatment access standards.

Measure Performance

18 weeks referral to treatment for

specialist Child and Adolescent

Mental Health Services (CAMHS)

As at end March 2019 for NHS Tayside the percentage of patients who were seen by Child and Adolescent Mental Health Services within 18 weeks was 65.3%, compared to performance of 39.5% as at end March 2018 this remains below the 90% target.

18 weeks referral to treatment for

Psychological Therapies

As at end March 2019 for NHS Tayside the percentage of patients who began Psychological Therapy treatment within 18 weeks was 72.3%, compared to performance of 60.0% as at end March 2018 which remains below the 90% target.


Both CAHMS and Psychological Therapies have compiled waiting times improvement plans,

including trajectories for improvement, which are included within our Annual Operational Plan.

These plans are to be endorsed by the Scottish Government and used to monitor performance

against the improvement trajectories during 2019/20.

Other local delivery standards – Access

Measure Performance

Eligible patients commence

IVF treatment within 12

months (90%)

As at the end of March 2019 for NHS Tayside the percentage of eligible patients who commenced IVF treatment within 12 months was 100%. This target has been consistently met since recording began. Source: NHS Tayside Business Unit


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Clients will wait no longer than

3 weeks from referral received

to appropriate drug or alcohol

treatment that supports their

recovery (90%)

As at the end of March 2019 for NHS Tayside the

percentage of drug and alcohol clients treated within 3

weeks of referral was 95.9%, compared with 87.5% in for

quarter ending March 2018. Source: NHS Tayside Population Health Intelligence

% of Alcohol Brief

Interventions sustained and

embedded in 3 priority settings

(primary care, A&E, antenatal)

and broaden delivery in wider

settings (80%)

In 2018/19 the percentage of Alcohol Brief Interventions

delivered in NHS Tayside was 75.6% which is below the

target of 80%. Performance in 2017/18 was 78.5%.

Source: NHS Tayside Population Health Intelligence /ISD Published

Data

% of Smoking Cessation

Sustain & Embed successful

smoking quits at 12 weeks

(100%)

As at end December 2018 NHS Tayside had delivered

105.1% of our cumulative target in relation to successful

Smoking Cessation quits. This compares to 71.0% for

the same period in 2017/18.

Source: ISD Published Data

Unscheduled Care

NHS Tayside is already implementing the ambitions of the NHS Scotland Health and Social Care

Delivery Plan through its Unscheduled Care Programme Board. This Programme Board ensures

that systems are in place to support early intervention and action at points of pressure which will

minimise potential disruption to services and people who require to access services. To support

this, the Programme Board is responsible for developing and reviewing the collective activities within

the NHS Tayside Unscheduled Care Action Plan, which is underpinned by the Six Essential Actions

for Unscheduled Care principles and takes account of the Scottish Government’s winter planning

guidance Preparing for Winter, 2018/19 and Supplementary Checklist of Winter Preparedness and

is supported by NHS Tayside Board and community resilience planning arrangements.

NHS Tayside and its Partner Organisations took a collaborative approach to maintain achievement

of the 4 hour A&E target of 95% during 2018/19 and continue to aspire to consistently achieve the

98% standard thus ensuring that patients receive the most appropriate assessment, treatment,

support and services at the right time, in the right place by the right person.

Measure Performance

95% of patients should wait no

more than 4 hours from arrival

to admission, discharge or

transfer for accident and

emergency treatment

As at the end of March 2019 94.8% of patients in Tayside were seen within 4 hours in A&E compared with 97.2% as at end March 2018.



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Social Matters

NHS Tayside actively seeks to adopt best practice in relation to equality and diversity in employment

as well as ensuring that it provides services which meet the needs of its diverse population. The

Board will continue to work with partner agencies in developing initiatives which promote

inclusiveness as part of its wider social responsibility remit.

In line with our public sector duties we have published the following reports:

Mainstreaming Report and Outcomes Report 2017-2021

Equal Pay Statement (2017)

Gender Pay Gap Tables (2017)

Employment Monitoring Data (2017)

2412 staff have completed the recently refreshed Equality and Diversity module. During 2018/19 an

additional 136 appointment officers attended the values based workshop/certificate to recruit, and

since 2013 over 4412 staff have completed the Gender Based Violence eLearning module.

NHS Tayside has been working with Stonewall in order to identify issues which promote a positive

work experience for LGBT staff. NHS Tayside has participated in the Workplace Stonewall Index for

2019 and the outcomes will be used to determine future actions.

Over the last four years NHS Tayside has made significant inroads into mainstreaming equality and managing diversity within our NHS services for patients, public, staff and our local communities, but we are also realistic that fully mainstreaming equality is a long term improvement journey. Promoting equality is not one single person’s role. It is the responsibility of all who take part in the planning and delivery of services regardless of where they sit in the organisation. NHS Tayside has a zero tolerance to any form of discrimination, bullying and harassment and takes an organisational responsibility to ensure that there are policies and processes in place to tackle any level of discrimination, bullying and harassment in the organisation.

NHS Tayside has published its second Mainstreaming report and Equality Outcomes (2017-2021).

We have also published our second Equal pay statement (2017-2021) and continue to monitor,

profile and publish workforce diversity data on an annual basis.

NHS Tayside has its own in-house Interpretation and Translation (I&T) service which is managed and delivered by an NHS team. NHS Tayside has developed a British Sign Language Local Plan 2018-2024 which will be reviewed in 2020.


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NHS Tayside has an Adult Support and Protection system and process in place to allow staff to address and report any adult support and protection issues which may arise within service delivery. The Human Trafficking Act which came into place in January 2018 is now being implemented under this process and staff can now address and report human trafficking issues/concerns through this process. This system and process also allows NHS Tayside to tackle other Harmful Practices such as Forced Marriage, Honour Based Violence and Female Genital Mutilation (FGM). The NHS Tayside Violence Against Women (VAW) strategic group also reports issues/concerns in this way. NHS Tayside continues to be actively involved in supporting the Scottish Government Health Department’s Glasgow Centre for Inclusive Living (GCIL) Equality Academy Professional Careers Programme. The aim of this programme is to provide a two year employment opportunity for disabled graduates providing them with a challenging and rewarding experience of employment, thus supporting a long-term sustainable career. NHS Tayside hosts students through this programme, supporting their development and transition to employment. In collaboration with Local Authorities and local education providers NHS Tayside runs a number of Health and Social Care related Academies which provide training for groups who have, so far, had difficulty in moving to positive destinations. The aims of the Academies are to provide core training and work experience which promotes employability and enhances the recruitment pipeline for NHS Tayside.

Sustainability and Environmental Reporting

The Climate Change (Scotland) Act 2009 set outs measures adopted by the Scottish Government to reduce emissions in Scotland by at least 80% by 2050. In 2015, an Order was introduced requiring all designated Major Players (of which NHS Tayside is one) to submit an annual report to the Sustainable Scotland Network detailing compliance with the climate change duties imposed by the Act. The information returned by the Board is compiled into a national analysis report, published annually and superseding the prior requirement for public bodies to publish individual sustainability reports. Further information on the Scottish Government’s approach can be found in the Climate Change Plan 2018-2032 (https://www.gov.scot/publications/scottish-governments-climate-change-plan-third-report-proposals-policies-2018/) while national reports can be found at the following resource: https://sustainablescotlandnetwork.org/reports.

........................................... Mr Grant Archibald Chief Executive 27 June 2019 Tayside Health Board

https://www.gov.scot/publications/scottish-governments-climate-change-plan-third-report-proposals-policies-2018/

https://www.gov.scot/publications/scottish-governments-climate-change-plan-third-report-proposals-policies-2018/

https://sustainablescotlandnetwork.org/reports


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SECTION 2 ACCOUNTABILITY REPORT

2.1 CORPORATE GOVERNANCE REPORT

The purpose of the Corporate Governance Report is to explain the composition and organisation of

Tayside NHS Board’s governance structures and how they support the achievement of the Board’s

objectives. The Corporate Governance Report includes:

2.1.1 The Directors’ Report

2.1.2 The Statement of Accountable Officer’s Responsibilities

2.1.3 The Governance Statement

2.1.1 Directors’ Report

Naming Convention

Tayside NHS Board is the common name for Tayside Health Board.

Tayside Health Fund is the common name for Tayside NHS Board Endowment Fund.

Date of Issue

The annual report and accounts were approved by the Board and authorised for issue by

the Accountable Officer on 27 June 2019.

Accounting Convention

In accordance with IAS 27 – Consolidated and Separate Financial Statements, these

Financial Statements consolidate the results of Tayside NHS Board Endowment Fund

(operating as Tayside Health Fund). The basis of consolidation used is Merger Accounting.

Any intra-group transactions between the Board and the Endowment Fund have been

eliminated on consolidation.

The financial statements also consolidate the Board’s interest in the three Integration Joint

Boards (IJB’s); Angus, Dundee and Perth and Kinross, established under the terms of the

Public Bodies (Joint Working) (Scotland) Act 2014. In accordance with IFRS 11 – Joint

Arrangements each IJB is considered to be a Joint Venture and under IAS 28 –

Investments in Associates and Joint arrangements the basis of consolidation used is the

equity method of accounting.

The financial statements and notes have been prepared under the historical cost

convention as modified by the revaluation of property, plant and equipment, and available

for sale financial assets. The accounts have been prepared under a direction issued by the

Scottish Ministers, which is reproduced on page 127 of these accounts. The statement of

the accounting policies, which have been adopted, is shown at Note 1 to the Accounts on

page 65.


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Appointment of Auditors

The Public Finance and Accountability (Scotland) Act 2000 places personal responsibility

on the Auditor General for Scotland to decide who is to undertake the audit of each health

body in Scotland. The Auditor General appointed Fiona Mitchell-Knight, Assistant Director,

Audit Scotland to undertake the audit of Tayside Health Board for the financial years

2016/17 to 2020/21. The general duties of the auditors of health bodies, including their

statutory duties, are set out in the Code of Audit Practice issued by Audit Scotland and

approved by the Auditor General.

The Trustees of Tayside NHS Board Endowment Fund appointed MMG Archbold as

external auditor for the financial year 2018/19.

Board Membership

Under the terms of the Scottish Health Plan, the Health Board is a board of governance whose membership will be conditioned by the functions of the Board. Members of Health Boards are selected and appointed through the public appointment process on the basis of their position or particular expertise which enables them to contribute to the decision making process at a strategic level. Board Members are also Trustees of the Tayside Health Fund, ex officiis. The Health Board has collective responsibility for the performance of the local NHS system as a whole, and reflects the partnership approach, which is essential to improving health and health care. Board membership during the year ended 31 March 2019 and up to the date of signing the financial statements is detailed in the following table:

POSITION APPOINTEE

Chairperson Professor J Connell (to 6 April 2018)

Mr J Brown CBE (from 11 April 2018)

Vice-Chair (Lay Member) Mr S Hay (to 9 September 2018)

Mrs L Birse-Stewart (from 1 April 2018, became Vice-Chair from 16/10/18)

Non Executive Members Elected Local Authority Member

Councillor C Reid (to 30 April 2018)

Elected Local Authority Member

Councillor K Lynn

Elected Local Authority Member Elected Local Authority Member Elected Local Authority Member

Councillor D Wann (to 14 June 2018)

Councillor C Stewart (from 1 May 2018)

Councillor B Myles (from 15 June 2018)

Lay Member Mr D Cross OBE (to 30 September 2018)

Lay Member Mrs L Dunion (to 30 April 2018)

Lay Member Lay Member

Dr R Peat

Professor G Martin (from 1 January 2019)


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Lay Member Mr M Hussain (to 16 October 2018)

Lay Member Mr H Robertson

Lay Member Mr R Benson (from 1 November 2018)

Lay Member Ms P Kilpatrick (from 1 November 2018)

Lay Member Mrs G McLeay (from 1 April 2018)

Lay Member Mrs E J Wells (from 1 April 2018)

Employee Director Mrs J Golden (to 3 June 2018)

Mrs J Alexander (from 5 July 2018)

University Member Prof N Beech (from 1 April 2018)

Chair of Area Clinical Forum

Dr A Cowie (to 31 May 2018)

Dr N Pratt (from1 June 2018)

Executive Members

Chief Executive Ms L McLay (to 6 April 2018)

Mr M Wright (from 11 April 2018 to 31 December

2018)

Mr G Archibald (from 1 January 2019)

Nurse Director Mrs G Costello

Medical Director Professor A Russell

Director of Public Health Dr D Walker

Director of Finance Mr A Gray (from 1 June 2018)

The Statement of Board Members’ Responsibilities

Under the National Health Service (Scotland) Act 1978, the Health Board is required to prepare

accounts in accordance with the directions of Scottish Ministers which require that those accounts

give a true and fair view of the state of affairs of the Health Board as at 31 March 2019 and of its

operating costs for the year then ended. In preparing these accounts the Directors are required to:

Apply on a consistent basis the accounting policies and standards approved for the NHSScotland by Scottish Ministers.

Make judgements and estimates that are reasonable and prudent.

State where applicable accounting standards as set out in the Financial Reporting Manual have not been followed where the effect of the departure is material.

Prepare the accounts on the going concern basis unless it is inappropriate to presume that the Board will continue to operate.

The Health Board members are responsible for ensuring that proper accounting records are

maintained which disclose with reasonable accuracy at any time the financial position of the Board

and enable them to ensure that the accounts comply with the National Health Service (Scotland)

Act 1978 and the requirements of the Scottish Ministers. They are also responsible for

safeguarding the assets of the Board and hence taking reasonable steps for the prevention of

fraud and other irregularities.


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The NHS Board members confirm they have discharged the above responsibilities during the

financial year and in preparing the accounts.

Board Members’ and Senior Managers’ Interests

Details of any interests of board members, senior managers and other senior staff in contracts or

potential contracts with the Health Board required by IAS 24 are disclosed in Note 22.

A full register of interests of board members is updated on a regular basis and is available on the

NHS Tayside website under the About Us – Your Health Board – Governance section or is

available from the Board Secretary’ Office.

Where a board member or senior manager exempts themselves from any decision because of a

conflict of interest this is recorded in the minute of the relevant meeting.

Tayside NHS Board and Committees

The NHS Board met on 8 occasions during the year. The Scottish Health Plan established that the following standing committees should exist at unified NHS Board level. Audit Committee, Clinical Governance (Care Governance) Committee, Remuneration Committee, Staff Governance Committee, Discipline (for Primary Care Contractors). The Board has also set up the following additional committees, the Performance and Resources Committee and the University’s Academic Liaison Committee (as a teaching Board). The Chairperson of Tayside Health Board is ex officio a member of all standing committees except the Audit Committee, to which he has a right of attendance. Information regarding the purpose and membership of all standing committees is provided as follows:

Audit Committee

The Audit Committee ensures the Board’s activities are within the law and regulations governing the NHS and that an effective internal control system is maintained to safeguard assets, avoid waste, avoid inefficiency, produce accurate financial information and seek value for money, and ensures that suitable arrangements are in place to provide formal assurance to the Accountable Officer by providing an opinion on the adequacy of arrangements for securing economy, efficiency and effectiveness in the use of resources.

The Committee met on 6 occasions during the year.

Membership of the Audit Committee during the financial year ended 31 March 2019 has been as

follows:

Mr S Hay (Chair until 28 June 2018), Mr D Cross (Chair until 30 September 2019), Dr R Peat (Chair from 1 October 2018), Mrs G McLeay (Vice-Chair from 28 June 2018), Councillor B Myles (Member and Vice Chair from 1 October 2018), Mr M Hussain (until 16th October 2018), Mrs J Golden (to 3 June 2018), Mrs J Alexander (from 5 July 2018), Dr N Pratt (from 1 June 2018), Mrs E J Wells. The Committee changed its name to the Audit and Risk Committee with effect from 1 April 2019.


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Care Governance Committee

The purpose of the Care Governance Committee is to provide Tayside NHS Board with the assurance that robust governance and management systems and processes are in place throughout the whole system for NHS Tayside in areas of Clinical Risk Management, Clinical Care and Public Health Effectiveness, Person Centredness and Continuous Improvement. The Committee met on 6 occasions during the year.

The membership of the Care Governance Committee during the financial year ended 31 March

2019 has been as follows:

Mrs L Birse-Stewart (Chair from 1 December 2018), Mrs J Alexander (from 5 July 2018), Mrs G McLeay, Dr R Peat, Dr N Pratt (from 1 June 2018), Mrs E J Wells, Dr A Cowie (until 31 May 2018), Mrs J Golden (until 3 June 2018), Mr S Hay (until 31 August 2018).

Performance and Resources Committee

The Performance and Resources Committee has the remit to keep under review the performance of and the use of resources by Tayside NHS Board, to ensure suitable arrangements are in place to secure economy, efficiency and effectiveness in the use of all resources, and provide assurance that these arrangements work effectively. The Committee met on 8 occasions during the year.

Membership of the Performance and Resources Committee during the financial year ended 31

March 2019 has been as follows:

Mr H Robertson (Member from 26 June 2018 and Chair from 28 June 2018), Mrs J Alexander, Dr

A Cowie (until 31 May 2018), Mr D Cross (until 30 September 2018), Mrs L Dunion (until 30 April

2018), Mrs J Golden (until 3 June 2018), Councillor K Lynn, Dr N Pratt (from 1 June 2018), Mrs E J

Wells.

Primary Care Practitioners Discipline Committee

The Primary Care Practitioners Discipline Committee would be constituted to consider the evidence in relation to a disciplinary matter raised against a Primary Care Practitioner. There were no meetings of the Committee during the year ended 31 March 2019.

Remuneration Committee

The fourth edition of the Staff Governance Standard made clear that each NHSScotland Board is required to establish a Remuneration Committee, whose main function is to ensure application and implementation of fair and equitable pay systems on behalf of the Board as determined by Ministers and the Scottish Government.


The membership of the Remuneration Committee during the year ended 31 March 2019 has been as follows:


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Mr J Brown (Chair), Mrs L Birse-Stewart (Vice-Chair), Mrs J Alexander( from 5 July 2018), Mrs G McLeay, Dr R Peat, Dr N Pratt (from 1 June 2018), Professor N Beech, Mr D Cross (to 30 September 2018), Mr M Hussain ( to 16 October 2018) and Mr S Hay( to 9 September 2018)

Staff Governance Committee

The Staff Governance Committee advises Tayside NHS Board on its responsibility, accountability

and performance against the NHSScotland Staff Governance Standard, addressing the issues of

policy, targets and organisational effectiveness.


The membership of the Staff Governance Committee during the financial year ended 31 March 2019 has been as follows: Mr M Hussain (Co-Chair until 16 October 2018), Mrs J Alexander (Co-Chair from 5 July 2018), Mrs J Golden (Co-Chair until 3 June 2018), Mrs G McLeay (Co-Chair from 17 October 2018), Mrs L Birse-Stewart, Councillor C Stewart, Professor N Beech.

Universities Academic Liaison Committee

The Committee provides a platform for all the key stakeholders to discuss strategic matters concerning collaboration in education and training, research, innovation, informatics and service development and improvement across the health and social care system.

The Committee did not meet during the year.

During 2018/19 the Terms of Reference and the Membership were the subject of an in-depth

review. This has now been concluded and new Terms of Reference and Membership are being

finalised, and a programme of meetings for 2019/20 is being set.

Non-Executive Director Membership of the Academic Liaison Committee has been confirmed as

follows:

Mrs L Birse-Stewart (Chair), Dr N Pratt, Professor N Beech, Mrs E J Wells. Public Health Committee During 2018/19 the NHS Board agreed to establish a Public Health Committee to operate from 2019/20. The Committee will promote public health and oversee population health activities with regular feedback to the Tayside NHS Board to ensure that the Board and NHS Tayside develop a long-term vision and strategy for public health. The Committee will: ensure that a strategic development plan is formulated which reflects public health needs and identified priorities for the population served; ensure that each Health and Social Care Partnership has access to meaningful and detailed public health information critical to the planning and development of public services in their local areas; ensure that the work of the Committee reflects the national priorities as defined by Public Health Scotland and that specific issues relating to the population served by NHS Tayside are communicated to Public Health Scotland.


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Membership of the Committee will be as follows: Medical Director; Nurse Director; Director of Public Health; Associate Director of Public Health; Associate Head of Health Promotion; Health Intelligence Manager; Director of Mental Health Services; Chief Officers of the Angus, Dundee and Perth and Kinross Health and Social Care Partnerships; Chief Executives of Angus, Dundee and Perth and Kinross Local Authorities; Representative of Health Scotland; Representative of Dundee University; Third Sector Representative.

Directors’ Third Party Indemnity Provisions

There have been no qualifying third party indemnity provisions in place for one or more of the

directors during the year ended 31 March 2019.

Remuneration for Non Audit Work

There was no remuneration paid to auditors in respect of any non audit work carried out on behalf of the Board. Value of Land

Specialised NHS land is stated at its existing use value, other than surplus land which is stated at

its open market value. There is no significant difference between the market value and the balance

sheet value.

Public Services Reform (Scotland) Act 2010

Sections 31 and 32 of the Public Services Reform (Scotland) Act 2010 impose duties on the Scottish Government and listed public bodies to publish information on expenditure and certain other matters as soon as is reasonably practicable after the end of each financial year. Tayside NHS Board fully meets the requirements of the Public Services Reform (Scotland) Act

2010 by making information available and details are available from on the Board’s website

http://www.nhstayside.scot.nhs.uk/YourRights/PublicServicesReformScotlandAct2010/index.htm

Personal Data Incidents Reported to the Information Commissioner

Four data breaches have been reported by NHS Tayside to the Information Commissioner’s Office during 2018/19. No further action is being taken In relation to three of these breaches and a decision is still awaited in respect of the fourth. Disclosure of Information to Auditors

The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each aware, there is no relevant audit information of which the Board’s auditors are unaware and each Director has taken all the steps that he/she ought reasonably to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Board’s auditors are aware of that information.

2.1.2 STATEMENT OF ACCOUNTABLE OFFICER’S RESPONSIBILITIES

Under Section 15 of the Public Finance and Accountability (Scotland) Act, 2000, The Principal

Accountable Officer (PAO) of the Scottish Government has appointed me as Accountable Officer

of Tayside Health Board.

This designation carries with it responsibility for:

http://www.nhstayside.scot.nhs.uk/YourRights/PublicServicesReformScotlandAct2010/index.htm


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the propriety and regularity of financial transactions under my control;

the economical, efficient and effective use of resources placed at the Board’s disposal; and

safeguarding the assets of the Board. In preparing the Accounts I am required to comply with the requirements of the Government’s

Financial Reporting Manual and in particular to:

observe the accounts direction issued by the Scottish Ministers including the relevant accounting and disclosure requirements and apply suitable accounting policies on a consistent basis;

make judgements and estimates on a reasonable basis;

state whether applicable accounting standards as set out in the Government’s Financial Reporting Manual have been followed and disclose and explain any material departures; and

prepare the accounts on a going concern basis.

I confirm that the Annual Report and Accounts as a whole are fair, balanced and reasonable and

take personal responsibility for the Annual Report and Accounts and the judgements required for

determining that it is fair, balanced and understandable.

In terms of the year ended 31 March 2019, I became the Accountable Officer with effect from 1

January 2019.

As Accountable Officer I am responsible for ensuring proper records are maintained and that the Accounts are prepared under the principles and in the format directed by Scottish Ministers. To the best of my knowledge and belief, I have properly discharged my responsibilities as Accountable Officer as intimated in the Departmental Accountable Officer’s letter to me of the 31 December 2018.

2.1.3 GOVERNANCE STATEMENT

Ministerial Intervention

In April 2018, the Cabinet Secretary for Health and Sport exercised her Ministerial powers of intervention and moved NHS Tayside to the highest level of escalation (5), following which there was a change in the leadership team of the organisation with a new Chair and Chief Executive being appointed. Following the final report of the independent Assurance and Advisory Group in February 2019, the level of escalation was moved from 5 to 4, with the explanation for this decision set out below within the Governance Statement. Scope of Responsibility

As Accountable Officer, I am responsible for ensuring that the organisation has maintained an adequate and effective system of internal control that supports compliance with the organisation’s policies and promotes achievement of the organisation’s aims and objectives, including those set by Scottish Ministers. I am responsible for safeguarding the public funds and assets assigned to the organisation.


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The responsibilities of Accountable Officer being transferred to myself in a Departmental Accountable Officer’s letter with effect from 1 January 2019 Prior to this date, Mr Malcolm Wright was the Accountable Officer appointed from 11 April 2018.

The governance framework and associated Standing Orders and Standing Financial instructions accord with guidance from Scottish Ministers in the Scottish Public Finance Manual (SPFM) and supplementary NHS guidance, and have been in place for the financial year and up to the date of approval of the annual report and accounts. In accordance with IAS 27 –Separate Financial Statements, the financial statements consolidate the Tayside NHS Board Endowment Fund, (operating as Tayside Health Fund). This statement includes any relevant disclosure in respect of the Endowment Accounts. Purpose of Internal Control The system of internal control is based on an ongoing process designed to identify, prioritise and manage the principal risks facing the organisation. The system aims to evaluate the nature and extent of risks, and manage risks efficiently, effectively and economically. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve the organisation’s aims and objectives. As such, it can only provide reasonable and not absolute assurance. The SPFM is issued by Scottish Ministers to provide guidance to the Scottish Government and other relevant bodies on the proper handling and reporting of public funds. The SPFM sets out the relevant statutory, parliamentary and administrative requirements, emphasises the need for efficiency, effectiveness and economy, and promotes good practice and high standards of propriety.

Governance Framework Tayside NHS Board, “the Board”, means Tayside Health Board which is its legal name. It is a strategic body, accountable to Scottish Government Health and Social Care Directorate (SGHSCD) and to Scottish Ministers for the functions and performance of the local NHS system (NHS Tayside). Its purpose is to ensure the efficient, effective and accountable governance of NHS Tayside and to provide strategic leadership and direction for the local NHS system as a whole focusing on agreed outcomes and priorities. It consists of the Chair, non-executive and executive members appointed by Scottish Ministers to constitute Tayside Health Board (National Health Services (Scotland) Act 1978 as amended). The Health Board has collective responsibility for the performance of the system as a whole and reflects the partnership approach, which is essential to improving healthcare. Members of health boards are appointed by Scottish Ministers and are selected on the basis of their position or particular experience which enables them to contribute to decision making at a strategic level. Board Members’ responsibilities in relation to the annual report and accounts are included in the Accountability Report. Board Members are also Trustees of Tayside Health Fund, an endowment fund charity, ex officiis. The standing committees have defined and documented roles and responsibilities that are set out in terms of reference and workplans. The purpose of each standing committee is set out in the Directors’ Report within the Accountability Report. All standing committees report to the Board. All standing committees are chaired by non-executive members, supported by executive directors. The non-executive members of the standing committees have the opportunity to scrutinise and


33

challenge the Board’s executive management. The annual reports of the standing committees confirm compliance with their annual workplans and the fulfilment of their roles and remits and include an assessment of the adequacy and effectiveness of the arrangements in place for the areas covered by the work of each committee. An annual report is also prepared by the Board of Trustees of Tayside Health Fund and concludes that adequate and effective governance arrangements were in place throughout the year. The Audit and Risk Committee Annual Report concludes, that whilst there are areas where governance and internal controls could be further enhanced, the Board has had an effective governance framework and system of internal control in place during the year. The Board’s Code of Corporate Governance (the Code) sets out how the Board, and the Tayside Health Fund should undertake business, including the Scheme of Delegation and Standing Financial Instructions. The Audit and Risk Committee approved the workplan to review and update the Board and Operational Schemes of Delegation in line with the changes to the leadership arrangements implemented during the year. The Audit and Risk Committee is assured of compliance with the relevant law and regulations through a number of sources including the results of reports from external inspection bodies, internal audit reports and updates on the National Fraud Initiative, Counter Fraud Services and fraud cases, as well as external audit reports. During the year, the Board Chairman commissioned a Corporate Governance Review which was carried out in the summer of 2018. The Board received and considered a report from the Chairman at its meeting on 25 October 2018 which provided an update on the significant changes to improve the Board’s governance, leadership and management arrangements progressed up to that point. At the December 2018 Board meeting the Board received a further Corporate Governance update regarding work to be progressed to build on the improvements already achieved. Whilst a number of changes have been made to the Board membership during the year, the Board and its sub-committees have continued to meet throughout the year, in quorate, and fulfil the respective work programmes for the period. On 1 February 2019, the Scottish Government formally issued DL (2019) 02 NHS Scotland Blueprint for Good Governance (Blueprint) requiring Board members to complete a survey; participate in a Board workshop and to consider and agree a report on the outcome from this process. Following completion of the survey board members considered the findings at a workshop held on 14 March 2019 and approved an action plan at the Board meeting on 25 April 2019, implementation of which will be monitored by the Board.

The Board has longer-term aims aligned to the Scottish Government’s ‘triple aims’: Better Health, Better Care, Better Value. The principle of Better Value and effective use of resources is embedded within our planning, performance and delivery activities. This ensures that Better Value is a part of how the organisation operates and is integral to the Board’s decision making.

In accordance with this principle, the Board has taken steps to foster an environment in which safe, effective and high quality care can be delivered within available resources. As part of this the Board undertook an Effectiveness self-assessment, which incorporates many aspects of “Best Value” and directors and managers were encouraged to review, identify and improve the efficient and effective use of resources. This has been evidenced in the year through the reduction in the monthly reported overspend and the delivery of financial savings higher than forecast within the annual operational plan.

The Board has a proactive approach to formal and informal consultation and communication with

key stakeholders, the public and media. In addition, staff engagement and advice is secured

through the Area Partnership Forum and the Area Clinical Forum. The minutes of Board and

standing committee meetings held in open business are published on the Board’s website.


34

The Board has a confidential staff whistleblowing policy a copy of which is available via

Whistleblowing Policy. The Policy should be used by any member of staff to raise a concern under

the Public Interest Disclosure Act 1998 (PIDA).

If, however, a member of staff wishes to make a complaint about their employment or how they

have been treated, they should follow the Board's local Grievance Policy or the Preventing and

Dealing with Bullying and Harassment Policy

The Board has an appointed non-executive member as Whistleblowing Champion, with the current

Champion having commenced in September 2018. The new appointee has overseen the

development of a Whistleblowing Development Plan including support for whistleblowers,

staff/management training, a robust reporting framework and general staff awareness policy. In

addition a new Whistleblowing tracker document is being used to provide assurance that

investigations are being managed timeously and completed and that staff are being informed of

progress. There is a Whistleblowing Group whose purpose is to report to the Staff Governance

Committee, support the role of the Whistleblowing Champion and critically review NHS Tayside’s

compliance with its whistleblowing responsibilities. An update on whistleblowing is provided to

every Staff Governance Committee. The number of whistle blowing notifications in the year was

less than 5.

The Board has implemented anti-bribery policies and procedures to comply with the Bribery Act

2010 and has a complaints investigation procedure in place which can be accessed via NHS

Tayside Complaints Procedure.

The Public Bodies (Joint Working) (Scotland) Act 2014 provided a framework for the effective

integration of adult health and social care services. The arrangements for the establishment of the

three Health and Social Care Partnerships - Angus, Dundee and Perth & Kinross - were set out

within the Integration Schemes established between NHS Tayside and the respective Local

Authorities aligned to each partnership. The Integration Schemes for each of the three Health and

Social Care Partnerships were approved by Scottish Ministers in October 2015. A forum has been

established, ‘Working Together in Tayside’, where the Chairs, Council Leaders, Chief Executives

and Chief Officers from the Board, the Local Authorities and Community Planning Partnerships

(CPPs) can meet to develop a more integrated and inclusive approach to delivering public

services across Tayside. We continue to review and revise these governance arrangements to

ensure that they reflect the assurances that both the health board and local authority require to

discharge their respective responsibilities as statutory bodies. During 2019/20, we plan to take

further steps to improve the clinical and care governance relationships between the Health and

Social Care Partnerships and the Board. We will also take account of the areas highlighted in the

self assessments undertaken in response to the Ministerial Review Group review of health and

social care integration.

The Independent Assurance and Advisory Group established in April 2017 noted in their final

report in February 2019 that the leadership team had devoted considerable time and energy to

building, relationships with the Local Authorities, the IJBs and the CPPs to ensure that all of the

key delivery partners are aligned with the Board’s strategic direction and to ensure the Board is

more involved in engagement arrangements which are rooted in local communities.

http://www.nhstaysidecdn.scot.nhs.uk/NHSTaysideWeb/idcplg?IdcService=GET_SECURE_FILE&dDocName=DOCS_060370&Rendition=web&RevisionSelectionMethod=LatestReleased&noSaveAs=1

https://www.nhstaysidecdn.scot.nhs.uk/NHSTaysideWeb/idcplg?IdcService=GET_SECURE_FILE&dDocName=PROD_275036&Rendition=web&RevisionSelectionMethod=LatestReleased&noSaveAs=1


35

In terms of measuring the quality of services for users, the Board has a range of activities designed

to monitor and improve quality and safety. These include patient feedback, the Scottish Patient

Safety Programme, learning from adverse events and promoting quality improvement across all

clinical and non-clinical services.

In January 2019, the Audit Committee considered a report from Internal Audit in respect of the

Evaluation of Internal Controls. In addition to overarching Board governance the report considered

the following areas:

Clinical Governance

Staff Governance

Financial Governance

Information Governance

The Chief Internal Auditor noted the considerable efforts made by management and staff during

the year, particularly actions taken to enhance governance, accelerate transformation and improve

management structures.

Since the report was issued in January the following actions have been taken by management to

address the recommendations made by the Chief Internal Auditor, specifically:

The completion of the Board self-assessment based on the NHS Scotland Governance Blueprint as noted above and appraisal of both Board non-executive members (ongoing) and executive directors;

Transforming Tayside programme and supporting governance arrangements to support the programme were formally adopted by the Board on 23 May 2019, with the first cohort of business cases approved at the same meeting. This follows a number of engagement events with the Board, including the Development Sessions on 31 January, 2019 and 1 February, 2019 and the Board endorsement of the approach on 28 February 2019;

Board endorsement of the Collaborative Leadership Strategy. Implementation actions to develop and embed the strategy will take place during 2019.

A Clinical Design Authority has been established with membership drawn from the senior clinical leadership across the organisation. The Clinical Design Authority provides a forum to encourage clinically led, whole-system delivery approaches and solutions; to both the immediate challenges and longer-term transformation of services

Further work is ongoing in relation to the review and redesign of eHealth governance structures

and provision of assurances in relation to information and cyber security and we would

acknowledge that these will be key areas of focus in our plans in 2019/20.

In terms of compliance we would make the following disclosures:

During 2018/19 NHS Tayside experienced an increase in the number of patients breaching their Treatment Time Guarantee (TTG) date and having to wait to be admitted. In total during 2018/19 there were 6,908 patients admitted who had waited longer than the 12 week TTG target. The comparable figure for 2017/18 was 4,913. The Board implemented a waiting times improvement plan during the year in line with the requirements of the NHS Scotland Waiting Times Improvement Plan. During the year NHS Tayside received a report from Healthcare Improvement regarding Child and Adult Mental Health Services (CAMHS) waiting times.


36

Improvement actions are being taken forward. In addition improvement actions were implemented as a result of 2 reviews undertaken in relation to TTG reporting errors.

The internal audit review into the Board’s Health and Safety arrangements highlighted the requirement to enhance existing arrangements. An action plan has been agreed and external health and safety advisory support has been commissioned to assist with the implementation of these actions. The Audit and Risk Committee will monitor progress against these actions.

Risk Management

NHSScotland bodies are subject to the requirements of the SPFM and must operate a risk

management strategy in accordance with relevant guidance issued by Scottish Ministers. The

general principles for a successful risk management strategy are set out in the SPFM.

Our risk management strategy aims to control risk to an acceptable level by creating a culture of

risk management that focuses on assessment and prevention through identifying, recording,

reviewing and managing risks that may affect the ability of the Board to achieve its objectives.

The strategic risks of the Board have been reviewed by the Strategic Risk Management Group and

by the Board members at a facilitated risk management workshop on 17 May 2019.

The risk management workshop identified a number of actions that will be taken forward to support

the further development of the Board’s Risk Management arrangements.

The Strategic Risk Management Group (SRMG) was re-established in April 2018 under the

Chairmanship of the Board Secretary; with the Chief Executive taking over as the Chair of the

SRMG in September 2019. The SRMG group received updates in relation to progress against

each of the strategic risks and reviewed the strategic risk profile. The SRMG formally reports to the

Board Audit and Risk Committee.

The following processes and procedures have been in place during the year 2018/19:

The board assurance framework and strategic risk profile was considered and discussed once during the year by the Board with progress reports provided in December 2018 and February 2019.

The strategic risks aligned to each of the standing committees continued to be reviewed throughout the year. Risks to information governance were managed and controlled by the Information Governance Committee, which reported to the Performance and Resources Committee of the Board until March 2019 when this was assumed by the Audit and Risk Committee.

The Audit and Risk Committee received an annual and mid-year risk management report in May and December 2018 respectively which concluded broadly effective systems and processes were in place for the identification of risk but that improvements were required to improve risk mitigation. The mid-year report saw the introduction of reporting of performance again Risk Management Key Performance Indicators.

A suite of risk management training sessions continued to be made available to staff in a range of formats.


37

During the year a number of enhancements were also made to the risk management arrangements. These are summarised as follows:

A decision was taken by the Interim Chief Executive to increase the number of meetings of the SRMG from 4 to 6 per year. This arrangement has been formalised by the new Chief Executive.

A rolling programme for peer review of strategic risks by the Strategic Risk Management Group was developed and prioritised based on the highest level risks being reviewed first. This will help to ensure that levels of risk are correctly assessed, mitigation has been identified and seek and receive assurance that risk is effectively being treated, tolerated or eliminated.

The risk assurance report template was reviewed to ensure more robust information is provided by the risk owner regarding the controls and source of assurance provided to the relevant standing committee for that risk.

Types of risk have been simplified from a three tier risk system (strategic, operational and service level) to improve the reporting, assurance and monitoring of risks to revert to a two tier system of strategic and service level risks.

Categories of risk have been introduced and apply to all risks to allow sources of risk to be identified; responsibility to be appropriately allocated and analysis to be undertaken. The categories are Reputational; Clinical; Compliance/Regulatory/Legislative; Financial and Workforce.

Provision has been built within the Datix record (Risk Management System) for the risk owner/manager to provide an assessment on the adequacy of controls based on the totality of all controls to ensure that management are in a position to provide more in-depth assurance as to the management of risk. This will also help to recognise shortages in controlling the risk and support the development of action plans (where appropriate) to treat the risk.

The risk management system encourages reporting, by staff, of adverse events that are assessed and acted upon where necessary to prevent recurrence. During 2018/19 a significantly revised and updated Adverse Event Management policy was approved by the Audit and Risk Committee in March 2019.

Improvement work will continue into 2019/20 when developments will continue to be made to strengthen systems and processes. This will include taking account of the recommendations within the Internal Audit review of the Board’s risk management arrangements, the implementation of which will be monitored by the Audit and Risk Committee. Building on previous work undertaken to reflect the impact of Health and Social Care Integration on NHS Tayside Governance Arrangements and to ensure a comprehensive assurance system, as a component part, reviews of the IJB Risk Management Policy and Strategies are to be undertaken.

Review of Adequacy and Effectiveness

As Accountable Officer, I am responsible for reviewing the adequacy and effectiveness of the

system of internal control. My review is informed by:-

formal letters of assurance from the executive directors who are responsible for developing, implementing and maintaining internal controls across their areas.


38

the work of the internal auditors, who submit regular reports to the Audit and Risk Committee which include their independent and objective opinion on the effectiveness of risk management, control and governance processes, together with recommendations for improvement.

comments by the external auditors in their management letters and other reports.

information and reports from external bodies.

The annual report of the Chief Internal Auditor concluded that:

The Board has adequate and effective internal controls in place, and

The Accountable Officer has implemented a governance framework in line with required guidance sufficient to discharge the responsibilities of this role.

The following processes are in place to ensure the maintenance of, and to review the effectiveness of, the system of internal control and are reflected in the conclusion of the Chief Internal Auditor:

NHS Tayside Board met regularly during 2018/19 to consider its plans and strategic direction, to allocate resources, to review the management of performance and to receive minutes and reports from its standing committees.

The Audit and Risk Committee provides assurance that an appropriate system of internal control is in place. As noted above, the Audit and Risk Committee concluded that whilst there are areas where improvements are required the governance and internal controls in place were generally adequate. The committee met throughout the year, reviewing the system of internal control and monitoring compliance with the NHS Tayside Code of Corporate Governance. During the year the committee reviewed its own effectiveness against the Audit Committee Handbook (March 2019), revised its terms of reference to ensure a greater focus on risk management and has overseen enhancements to the system of audit follow up and levels of assurance provided on the implementation of audit recommendations.

Internal Audit delivered its service on an approved risk-based audit plan. As required by the Public Sector Internal Audit Standards the Audit and Risk Committee commissioned an independent review of the effectiveness of the internal audit service. This concluded that the internal audit service was effective and was being delivered in line with Government Internal Audit Standards. The review identified a number of opportunities to enhance the internal audit service and these actions are being taken forward by the Chief Internal Auditor and are being monitored by the Audit and Risk Committee.

External Audit has considered the internal control processes, relevant to their audit, put in place by the Chief Executive as Accountable Officer.

Work has continued during the year to respond to the challenges of achieving performance standards and targets. These have been reported through the performance reports (NHS Tayside Key Metrics Reports) considered during the year by the Board and Performance and Resources Committee with regular communication in place with Scottish Government in relation to achievement of the targets. The NHS Tayside Key Metrics Reports are available on our website and will also be available on a dedicated Performance page of our website, alongside information for patients on our waiting times and weekly activity from July 2019. Reporting mechanisms continue to be further developed to ensure a culture of continuous improvement continues to be promoted.


39

The Board has in place a procedure for identification and communication of legislation, NHS circulars and other guidance documents. The Board maintains a central register of documents circulated to the appropriate staff for information and action and has a follow up mechanism to monitor compliance with regulations and procedures laid down by Scottish Ministers and the Scottish Government. Property management arrangements are in place to oversee the approval of disposal of property and also the required documentation to be provided to the NHS Board in relation to declaring assets surplus to requirements.

During the year the Board commissioned a number of reviews to inform plans to enhance our arrangements in relation to eHealth, information governance and cyber security. Resultant enhancement actions will be monitored by the Audit and Risk Committee.

In terms of my assessment of the control environment in operation during 2018/19, I would disclose

the following:

Performance Management

The arrangements for delivering operational performance were adequate and effective during the year. The Board established a Performance and Resources Committee in April 2018 to scrutinise reporting, with performance also a standing agenda item on each Board meeting. The supporting systems and processes for performance have been significantly enhanced, together with the reporting and monitoring arrangements. Actions to further enhance our arrangements are being implemented as part of the “Blueprint” including work with our IJB partners.

External Reviews

1. Mental Health

NHS Tayside commissioned an independent inquiry into NHS Tayside mental health services. The Inquiry Chair presented an update report to the NHS Tayside Board on 6 December 2018. The Inquiry Chair published an Interim Report - Inquiry Update and Emergent Key Themes in May 2019 and a final report is planned for publication by the end of the calendar year. The Interim Report Findings will be considered by the Board on 27 June 2019.

2. Inquiry by the Office of the Scottish Charity Regulator (OSCR)

OSCR opened an inquiry on 4 April 2018 when they became aware of press reports that in 2014 Tayside NHS Board Endowment Funds (the charity) had made retrospective grants of £2.7 million (re-stated per the Lead Officer’s assessment as £3.6 million) to Tayside Health Board in respect of projects which the health board had already funded. On conclusion of their review, OSCR wrote to the charity setting out a number of recommendations, in addition to the findings and conclusions per the main Inquiry Report. These dealt with the Policy & Procedures and the need for a new conflict of interest policy to handle conflicts between the charity and its corporate trustee – the health board, attendance of Trustees at meetings and the need to promote better understanding of the role of OSCR as charity regulator. An action plan in response to the recommendations to the charity was considered and approved by the Board of Trustees (BOT) on 21 February 2019. It was recorded within the draft minute of the BOT meeting of 7 May 2019 that all actions due by the charity had been completed.


40

3. Grant Thornton

The Scottish Government Health and Social Care Directorate commissioned two external reviews

into the use of eHealth funds and financial governance arrangements between the financial years

2012/13 – 2017/18. These were undertaken by Grant Thornton. The Board accepted all

recommendations within these reports and the Audit and Risk Committee provided the oversight to

ensure that these were implemented. The Audit and Risk Committee confirmed at its meeting on 28

March 2019 that all the recommendations had been implemented in full.

4. Assurance and Advisory Group

The Final update from the independent NHS Tayside Assurance and Advisory Group (AAG) was

published by the Director General Health and Social Care and Chief Executive of NHS Scotland on

17 February. The report confirmed the positive steps towards developing a clear sense of direction

and purpose for the organisation by NHS Tayside: a redesign of the existing business model with

more visible clinical leadership and engagement, and a systematic and structured approach to

building capability and capacity by the executive leadership team.

The AAG also observed a significant shift towards a more challenging and better-informed scrutiny

of NHS Tayside Executive Leadership’s work and performance. This has been driven primarily by

the direction and example given by the Interim Chair and Chief Executive, supported by the

appointment of new Non-Executive Board Members, using a targeted recruitment process based on

skill-mix and values. The AAG also noted that the Chair of NHS Tayside had also received

Ministerial approval to expand the Board to appoint two additional Non-Executive members with

specialist skills, including finance.

Following the publication of the AAG report, the Director General Health and Social Care and Chief

Executive of NHS Scotland, declassified NHS Tayside to Stage 4 (from Stage 5,the highest level of

escalation) in the NHS Board Performance Escalation Framework.

5. Audit Scotland

In December 2018, the Auditor General issued a report on NHS Tayside's audited accounts for

2017/18 under Section 22 of the Public Finance and Accountability (Scotland) Act 2000. This

allowed the Auditor General to bring to the Parliament and the public's attention matters of public

interest related to the financial statements of NHS Tayside during 2017/18. The Public Audit and

Post-legislative Scrutiny Committee published its findings into the NHS Tayside finances in 2016/17

and 2017/18 on 29 May 2019. As reflected in the independent AAG report, the Board has made

significant progress towards addressing the issues highlighted by Audit Scotland and the Public

Audit and Post-legislative Scrutiny Committee.

6. Clinical Management of Breast Cancer in NHS Tayside

NHS Scotland’s Chief Medical Officer and Chief Pharmaceutical Officer commissioned two reviews

into the clinical management of breast cancer in Tayside patients since December 2016. Two

reports were published - Healthcare Improvement Scotland (HIS) Report, 1 April 2019 and the

Immediate Review Group (IRG) independent report, 16 April 2019. The Board accepted the

recommendations within these reports and the Chief Executive is leading a senior management

team in implementing a comprehensive plan of action.


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7. Dundee Drugs Commission

During the year Dundee Partnership, under the auspices of the Dundee Community Planning

Partnership, commissioned a review into the nature and extent of drugs use and drug related deaths

in Dundee. The review being undertaken by the Dundee Drugs Commission is expected to report in

the middle of August 2019.

8. Enhanced Monitoring of General Surgery and Psychiatry Training Programs

In 2018/19 NHS Tayside was under enhanced monitoring by the General Medical Council (GMC) for

general surgery and general adult psychiatry (psychiatry) training programs. Enhanced monitoring

on general surgery training was resolved in May 2019 however training for psychiatry remains under

enhanced monitoring. Significant progress has been made to address the underlying reasons for the

continuation of the enhanced monitoring status for psychiatry but this will take many months to

resolve completely. NHS Tayside is working closely with NHS National Education for Scotland and

the GMC to deliver the action plan which is currently in operation. There is a revisit scheduled for

October 2019.

Statutory Financial Targets

The Board has met its three statutory financial targets. Brokerage of £17.6 million was requested to

support the Board’s financial position which is £4.7 million less than had been indicated in the

forecast financial plan at the start of the financial year. The AAG recognised the improvements

made during the year and highlighted the following and noted that the Board had made substantial

improvements in controlling and reducing expenditure, with the monthly overspend reducing since

the beginning of the financial year. Efficiency savings identified and delivered total £32.0 million, an

increase of £2.6 million from the financial plan target of £29.4 million. The level of recurring savings

has increased from 36% in 2017-2018 to 44% in 2018-2019.

Conclusion

As the newly appointed Accountable Officer, and taking into account the improvement work

undertaken during the year and referenced above, I am able to conclude that, taking into account

the governance framework and the assurances and evidence received from the Board’s committees,

that corporate governance was operating effectively throughout the financial year ended 31 March

2019.

2.2 REMUNERATION REPORT AND STAFF REPORT

2.2.1 REMUNERATION REPORT

Information disclosed in this section relates to the remuneration of Board Members and senior employees, who report to the Chief Executive and who influence the decisions of the organisation as a whole, reflecting the Treasury’s interpretation of how Greenbury applies to the Public Sector. Further information on Board Members’ expenses will be published on our website following approval of these accounts.


42

REMUNERATION REPORT FOR THE YEAR ENDED 31 MARCH 2019 (CURRENT YEAR) (Audited Information) Remuneration Table Gross

Salary Bonus

Payments Benefits in Kind

Total Earnings in Year

Pension Benefits

Total Remuneration

(Bands of

£5,000)

(Bands of £5,000)

£’000 (Bands of

£5,000)

£’000 (Bands of £5,000)

Remuneration of: Executive Members

(*1) (*2)

Chief Executive: Ms L McLay (to 6/4/18) (*3)

0-5 0 0 0-5 0 0-5

Chief Executive: Mr M Wright OBE (from 11/4/18 to 31/12/18) (*4)

100-105 0 0 100-105 49 145-150

Chief Executive: Mr G Archibald (from 1/1/19) (*5)

35-40 0 0 35-40 30 65-70

Director of Public Health: Dr A D W Walker (*6) 180-185 0 0 180-185 0 180-185 Medical Director: Dr A Russell 145-150 0 0 145-150 14 160-165 Nurse Director: Mrs G Costello 90-95 0 0 90-95 18 110-115 Director of Finance: Mr A Gray (from 1/6/18) (*7)

50-55 0 1.7 55-60 21 75-80

Non Executive Members Chair: Professor J Connell (to 6/4/18)

0-5 0 0 0-5 0 0-5

Interim Chair: Mr J Brown CBE (from 11/4/18) (*8)

25-30 0 0 25-30 0 25-30

Mr D Cross OBE (to 30/9/18) 0-5 0 0 0-5 0 0-5 Mrs L Dunion (to 30/4/18) 0-5 0 0 0-5 0 0-5 Councillor K Lynn 5-10 0 0 5-10 0 5-10 Mr H Robertson 10-15 0 0 10-15 0 10-15 Mr M Hussain (to 16/10/18) 0-5 0 0 0-5 0 0-5 Mr S Hay (Vice Chair) (to 9/9/18) 0-5 0 0 0-5 0 0-5 Mrs L Birse-Stewart (from 1/4/18) (Vice Chair from 16/10/18)

20-25 0 0 20-25 0 20-25

Mrs J Golden (to 3/6/18) (*9) 5-10 0 0 5-10 5 10-15 Mrs J Alexander (from 5/7/18)(*10) 5-10 0 0 5-10 0 5-10 Dr A Cowie (to 31/5/18) 0-5 0 0 0-5 0 0-5 Dr N Pratt (from 1/6/18) (*11) 90-95 0 0 90-95 8 100-105 Dr R Peat 15-20 0 0 15-20 0 15-20 Councillor C Reid (to 30/4/18) (*12) 0-5 0 0 0-5 0 0-5 Councillor D Wann (to 14/6/18) 0-5 0 0 0-5 0 0-5 Councillor C Stewart (from 1/5/18) 5-10 0 0 5-10 0 5-10 Councillor B Myles (from 15/6/18) 5-10 0 0 5-10 0 5-10 Mrs G McLeay (from 1/4/18) 20-25 0 0 20-25 0 20-25 Mrs E J Wells (from 1/4/18) 10-15 0 0 10-15 0 10-15 Mr R Benson (from 1/11/18) 0-5 0 0 0-5 0 0-5 Ms P Kilpatrick (from 1/11/18) 0-5 0 0 0-5 0 0-5 Professor G Martin (from 1/1/19) 0-5 0 0 0-5 0 0-5 Professor N Beech (1/4/18) 5-10 0 0 5-10 0 5-10 Other Senior Employees Professor P Stonebridge (from 28/8/18) (*13)

105-110 0 0 105-110 16 120-125

Total 1.7 161


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*1 The ‘total earnings in year* column shows the remuneration relating to actual earnings payable (including

arrears) in 2018/19. *2 Publication of pension benefits is required by the Financial reporting Manual (FReM) and the Companies Act.

This calculation aims to bring public bodies in line with other industries in disclosing an assessed cumulative pension benefit for a standard 20 year period, which is the estimated life span following retirement.

*3 Ms L McLay was Chief Executive until 6 April 2018 and remained an employee in NHS Tayside until 31 July 2018. Her earnings have been shown for the period in which she was employed as Chief Executive by NHS Tayside. The total earnings in year had she been employed in this role for the full year would have been within £125-130k banding.

*4 Mr M Wright was appointed Chief Executive for NHS Tayside on 11 April 2018 in addition to his role as Chief Executive of NHS Grampian. During the period from 11 April 2018 to 1 September 2018 he was an employee of NHS Grampian and 65% of his salary was recharged to NHS Tayside. Since 3 September 2018 he is an employee of NHS Tayside. At 31 March 2019 Mr M Wright remains a substantive employee of NHS Tayside with his costs fully recharged from 1 January 2019 in relation to his current secondment to Scottish Government. The remuneration disclosed above reflects earnings from 11 April to 31 December 2018 in relation to the role as Chief Executive of NHS Tayside. Mr M Wright left the superannuation scheme (retired) at the end of his employment with NHS Grampian, and no pension benefits were accrued in his subsequent employment with NHS Tayside. The total earnings in year had he been employed as Chief Executive for the full year would have been within £170-175k banding.

*5 The total earnings in year had Mr G Archibald been employed for the full year would have been within £150-155k banding.

*6 Director of Public Health, Dr A D W Walker’s salary includes awards payable under the terms of the national merit awards scheme. The Director of Public Health opted not to be covered by NHS pension arrangements during the reporting year.

*7 Mr A Gray was appointed Director of Finance for NHS Tayside on 1 June 2018 in addition to his role as Director of Finance for NHS Grampian. Prior to this date he provided enhanced support to NHS Tayside as part of his role as Regional Finance Lead for the North of Scotland. During the year he performed these roles as an employee of NHS Grampian. For the period 1 April 2018 to 31 March 2019 NHS Grampian recharged 45% of his total salary to NHS Tayside. The remuneration disclosed above reflects his earnings in relation to his role as NHS Tayside Director of Finance from 1 June 2018 when he became a Board Member. The total earnings in year had Mr A Gray been employed for the full year would have been within £135-140k banding.

*8 Mr J Brown was appointed Interim Chairperson for NHS Tayside on 11 April 2018 in addition to his role as Chairperson of NHS Greater Glasgow and Clyde. His remuneration is paid by NHS Greater Glasgow and Clyde and is recharged on a basis of a minimum of 2 days per week.

*9 Employee Director, Mrs J Golden’s salary includes £7k in respect of non-board duties undertaken in the period to 3 June 2018.

*10 Employee Director, Mrs J Alexander’s salary includes £1k in respect of non-board duties undertaken in the period from 5 July 2018.

*11 Mr N Pratt's salary includes £87k in respect of non-board duties undertaken in the period from 1 June 2018. *12 Councillor C Reid's term of office ended on 30 April 2018. He opted to forego payment beyond 1 April 2018

due to his unavailability to attend meetings. *13 Professor P Stonebridge has been included from 28 August 2018, whilst deputising for the Medical Director.


44

REMUNERATION REPORT FOR THE YEAR ENDED 31 MARCH 2019 (CURRENT YEAR) (Audited Information) Pension Values Table Total accrued

pension at pensionable

age at 31 March 2019

Real increase in pension at pensionable


Cash Equivalent Transfer

Value (CETV) at 31 March

2018



2019

Real Increase in CETV in

year

Total accrued lump sum at pensionable


Real increase in lump sum

at pensionable

age

(Bands of

£5,000) (*1)

(Bands of

£2,500) (*2)

£’000

(*1)

£’000

(*1)

£’000

(*2)

(Bands of

£5,000) (*1)

(Bands of

£2,500) (*2)

Remuneration of: Executive Members Chief Executive: Ms L McLay (to 6/4/18)

25-30

0-0

495

520

4

35-40

0

Chief Executive: Mr M Wright OBE (from 11/4/18 to 31/12/18) (*3)

85-90

2.5-5

2,069

2,165

51

265-270

7-7.5

Chief Executive: Mr G Archibald (from 1/1/19)

60-65

0-2.5

1,238

1,411

36

185-190

2.5-5

Director of Public Health: Dr A D W Walker (*4) 55-60 0-0 1,286 1,388 0 170-175 0 Medical Director: Dr A Russell

30-35

0-2.5

587

675

26

90-95

2.5-5

Nurse Director: Mrs G Costello

40-45

0-2.5

867

978

38

130-135

2.5-5

Director of Finance: Mr A Gray (from 1/6/18) (*5)

20-25

0-2.5

256

316

13

0

0

Non Executive Members

Chair: Professor J Connell (to 6/4/18)

0-0 0-0 0 0 0 0 0

Chair Mr J Brown CBE (from 11/4/18)

0-0 0-0 0 0 0 0 0

Mr D Cross OBE (to 30/9/18)

0-0 0-0 0 0 0 0 0

Mrs L Dunion (to 30/4/18) 0-0 0-0 0 0 0 0 0 Councillor K Lynn 0-0 0-0 0 0 0 0 0 Mr H Robertson 0-0 0-0 0 0 0 0 0 Mr M Hussain (to 16/10/18)

0-0 0-0 0 0 0 0 0

Mr S Hay (Vice Chair) (to 9/9/18)

0-0 0-0 0 0 0 0 0

Mrs L Birse-Stewart (from 1/4/18) (Vice Chair from 16/10/18)

0-0 0-0 0 0 0 0 0

Mrs J Golden (to 3/6/18) (*6)

15-20 0-2.5 290 322 10 40-45 0-2.5

Mrs J Alexander (from 5/7/18)

0-0 0-0 0 0 0 0 0

Dr A Cowie (to 31/5/18) 0-0 0-0 0 0 0 0 0 Dr N Pratt (from 1/6/18) 50-55 0-2.5 1,184 1,208 8 150-155 2.5-5 Dr R Peat 0-0 0-0 0 0 0 0 0 Councillor C Reid (to 30/4/18)

0-0 0-0 0 0 0 0 0

Councillor D Wann (to 14/6/18)

0-0 0-0 0 0 0 0 0


45

Councillor C Stewart (from 1/5/18)

0-0 0-0 0 0 0 0 0

Councillor B Myles (from 15/6/18)

0-0 0-0 0 0 0 0 0

Mrs G McLeay (from 1/4/18)

0-0 0-0 0 0 0 0 0

Mrs E J Wells (from 1/4/18)

0-0 0-0 0 0 0 0 0

Mr R Benson (from 1/11/18)

0-0 0-0 0 0 0 0 0

Ms P Kilpatrick (from 1/11/18)

0-0 0-0 0 0 0 0 0

Professor G Martin (from 1/1/19)

0-0 0-0 0 0 0 0 0

Professor N Beech (from 1/4/18)

0-0 0-0 0

0 0 0 0

Other Senior Employees

Professor P Stonebridge (from 28/8/18)

30-35 0-2.5 634 671 9 60-65 0

Total 8,906 9,654 195

*1 Accrued pension figures shown relate to the total benefits the individual has accrued as a member of the pension scheme, not just their service in the capacity to which disclosure applies. *2 Real increase in pension figures relate to the increase in the value of the pension in 2018/19 relating to service in the capacity to which the disclosure applies. For posts shared with other Boards or where a Board Member has been in post for part of the year, these figures reflect only the increase that relates to employment as an NHS Tayside Board Member. *3 Mr M Wright's pension information relates to his employment from 11 April to 31 December 2018 in relation to his role as Chief Executive of NHS Tayside. Mr M Wright left the superannuation scheme (retired) at the end of his employment with NHS Grampian, and no pension benefits were accrued in his subsequent employment with NHS Tayside. *4 Director of Public Health Dr A D W Walker opted not to be covered by NHS pension arrangements during the reporting year. *5 Mr A Gray's pension information relates to his role NHS Tayside Director of Finance from 1 June 2018 when he became a Board Member and includes additional years purchased at his own personal cost. *6 Employee Director, Mrs J Golden’s pension information relates to her substantive post up to 3 June 2018. .


46

REMUNERATION REPORT FOR THE YEAR ENDED 31 MARCH 2018 (PRIOR YEAR) (Audited Information) Remuneration Table Gross

Salary Bonus

Payments Benefits in Kind

Total Earnings in Year

Pension Benefits

Total Remuneration

(Bands of

£5,000)

(Bands of £5,000)

£’000 (Bands of

£5,000)

£’000 (Bands of £5,000)

Remuneration of: Executive Members

(*1) (*2)

Chief Executive: Ms L McLay 125-130 0 0 125-130 24 150-155 Director of Public Health: Dr A D W Walker (*3) 175-180 0 0 175-180 0 175-180 Medical Director: Dr A Russell 150-155 0 0 150-155 9 160-165 Nurse Director: Mrs G Costello 90-95 0 0 90-95 18 105-110 Director of Finance: Mr L Bedford (*4)

115-120 0 0 115-120 21 135-140

Non Executive Members Chair: Professor J Connell 30-35 0 0 30-35 0 30-35 Mr D Cross OBE 5-10 0 0 5-10 0 5-10 Mrs L Dunion 5-10 0 0 5-10 0 5-10 Councillor K Lynn to 30/4/17 from 14/6/17

5-10 0 0 5-10 0 5-10

Councillor D Doogan to 30/4/17 0-5 0 0 0-5 0 0-5 Mrs G Middleton to 30/4/17 0-5 0 0 0-5 0 0-5 Mrs S Tunstall-James 5-10 0 0 5-10 0 5-10 Mr H Robertson 5-10 0 0 5-10 0 5-10 Mrs A Rogers 5-10 0 0 5-10 0 5-10 Mr M Hussain 5-10 0 0 5-10 0 5-10 Mr S Hay (Vice Chair) 5-10 0 0 5-10 0 5-10 Mrs J Golden (*5) 50-55 0 0 50-55 6 55-60 Professor M Smith 5-10 0 0 5-10 0 5-10 Dr A Cowie 5-10 0 0 5-10 0 5-10 Dr R Peat 5-10 0 0 5-10 0 5-10 Councillor C Reid (from 14/6/17) 5-10 0 0 5-10 0 5-10 Councillor D Fairweather (from 14/6/17 to 13/9/17)

0-5 0 0 0-5 0 0-5

Councillor D Wann (from 14/11/17) 0-5 0 0 0-5 0 0-5 Other Senior Employees Mr G Doherty (*6) 105-110 0 0 105-110 27 135-140 Total 0 105

*1 The ‘total earnings in year* column shows the remuneration relating to actual earnings payable (including

arrears) in 2017-18. *2 Publication of pension benefits is required by the Financial reporting Manual (FReM) and the Companies Act.

This calculation aims to bring public bodies in line with other industries in disclosing an assessed cumulative pension benefit for a standard 20 year period, which is the estimated life span following retirement.

*3 The Director of Public Health’s salary includes awards payable under the terms of the national merit awards scheme. The Director of Public Health opted not to be covered by NHS pension arrangements during the reporting year.

*4 Director of Finance ceased to be a Board Member effective 31 March 2018, which is also the date he took early retirement. The above remuneration figures reflect the Director of Finance’s total earnings during 2017/18 including payment in lieu of notice in line with contractual terms and conditions of service. The period of notice would have been earnings in 2018/19 had the period of notice been worked. No redundancy payment, no service enhancement and no other compensation for loss of office was received by the Director of Finance.

*5 The Employee Director’s salary includes £42k in respect of non-board duties. CETV information included relates to this employee’s substantive post.

*6 The Director of Human Resources is not an executive member of the Board.


47

Mr A Gray fulfilled a role during 2017/18 as a Strategic Director of Finance. He was not a Board Member and his remuneration was disclosed in the 2017/18 NHS Grampian financial statements. There was no recharge to NHS Tayside for the services provided in this respect during the financial year 2017/18. Subsequently he was appointed Director of Finance for NHS Tayside with effect from 1 June 2018.

REMUNERATION REPORT FOR THE YEAR ENDED 31 MARCH 2018 (PRIOR YEAR) (Audited Information) Pension Values Table Total accrued

pension at pensionable


Real increase in pension at pensionable




2017



2018

Real Increase in CETV in

year

Total accrued lump sum at pensionable


Real increase in lump sum

at pensionable

age

(Bands of

£5,000)

(Bands of

£2,500)

£’000 £’000 £’000 (Bands of

£5,000)

(Bands of

£2,500) Remuneration of: Executive Members Chief Executive: Ms L McLay

25-30 0-2.5 432 495 22 35-40 0

Director of Public Health: Dr A D W Walker (*1)

55-60 0-0 1,311 1,286 0 170-175 0

Medical Director: Dr A Russell

25-30 0-2.5 528 587 20 85-90 2.5-5.0

Nurse Director: Mrs G Costello

40-45 0-2.5 793 867 37 125-130 2.5-5.0

Director of Finance: Mr L Bedford (*2)

40-45 0-2.5 766 863 39 120-125 2.5-5.0


Chair: Professor J Connell

0-0 0-0 0 0 0 0 0

Mr D Cross OBE 0-0 0-0 0 0 0 0 0 Mrs L Dunion 0-0 0-0 0 0 0 0 0 Councillor K Lynn 0-0 0-0 0 0 0 0 0 Councillor D Doogan 0-0 0-0 0 0 0 0 0 Mrs G Middleton 0-0 0-0 0 0 0 0 0 Mrs S Tunstall-James 0-0 0-0 0 0 0 0 0 Mr H Robertson 0-0 0-0 0 0 0 0 0 Mrs A Rogers 0-0 0-0 0 0 0 0 0 Mr M Hussain 0-0 0-0 0 0 0 0 0 Mr S Hay (Vice Chair) 0-0 0-0 0 0 0 0 0 Mrs J Golden (*3) 15-20 0-2.5 269 290 9 40-45 0 Professor M Smith 0-0 0-0 0 0 0 0 0 Dr A Cowie 0-0 0-0 0 0 0 0 0 Dr R Peat 0-0 0-0 0 0 0 0 0 Councillor C Reid (from 14/6/17)

0-0 0-0 0 0 0 0 0

Councillor D Fairweather (from 14/6/17 to 13/9/17)

0-0 0-0 0 0 0 0 0

Councillor D Wann (from 14/11/17)

0-0 0-0 0 0 0 0 0

Other Senior Employees

Mr G Doherty (*4) 35-40 0-2.5 662 731 34 105-110 0-2.5 Total 4761 5119 161


48

*1 The Director of Public Health’s salary includes awards payable under the terms of the national merit awards

scheme. The Director of Public Health opted not to be covered by NHS pension arrangements during the reporting year.

*2 Director of Finance ceased to be a Board Member effective 31 March 2018, which is also the date he took early retirement. The above figures reflect the Director of Finance’s total earnings during 2017/18 including payment in lieu of notice in line with contractual terms and conditions of service. The period of notice would have been earnings in 2018/19 had the period of notice been worked. No redundancy payment, no service enhancement and no other compensation for loss of office was received by the Director of Finance.

*3 The Employee Director’s salary includes £42k in respect of non-board duties. CETV information included relates to this employee’s substantive post.

*4 The Director of Human Resources is not an executive member of the Board.

Remuneration Arrangements

The remuneration arrangements and performance appraisal of Executive Directors and Senior Managers is governed by decisions of the NHS Tayside Remuneration Committee. Such decisions have been made strictly in accordance with the provision of circulars issued by the Scottish Government Health and Social Care Directorates and are subject to regular audit scrutiny. The membership of the Remuneration Committee is reported in the Directors’ Report. Remuneration policy is determined by the Cabinet Secretary for NHSScotland employers and directed through official circulars. This is regulated through a National Performance Management Committee (NPMC), established to assure Ministers and public on the robustness of the performance management and appraisal processes for Executives across NHSScotland and to ensure that any increases in pay are only made on evidence-based performance, and the National Evaluation Committee which holds responsibility for senior job grading, and is unique in the UK in this respect. All decisions made by the Remuneration Committee are consistent with this policy framework. Performance assessment for this period is still under consideration (due to the cycle of business between Boards and SGHSCD) as any uplifts will not be sanctioned by the National Performance Management Committee or SGHSCD until the performance year has concluded including confirmation of the Annual Accounts, normally June. Scottish Government annualised amendments to pay arrangements for 2018/19 in the Executive Senior Manager cohort will be made in accordance with the NHS circular PCS(ESM)2018/1. The remainder of the employment package is the same as other members of staff in respect of pension and other entitlements. Executives and senior managers above certain salary levels will pay higher proportionate contributions to the pension scheme. All executives were required to agree to new contracts when the revised pay arrangements were introduced in 2005. Fair Pay Disclosure (Audited Information)

2018-19 2017-18

Range of staff remuneration £000s

£17 to £238 £17 to £244

Highest earning director’s total remuneration £000s

£180 to £185 £175 to £185

Median total earnings in year £29,931 £29,415

Ratio 6.10 6.03


49

Reporting bodies are required to disclose the relationship between the remuneration of the highest earning director in their organisation and the median remuneration of the organisation’s workforce. The calculation for staff remuneration represents March salary extrapolated for full year effect and does not necessarily represent the actual gross pay received in the year. Occupational pension contributions are excluded for the purposes of this calculation. Agency and Bank Staff are excluded from the calculation as inclusion would distort the integrity of the median calculation. The change in the ratio this year is as a result of an increase in the remuneration of the highest earning director and in the median total earnings. 2.2.2 STAFF REPORT HIGHER PAID EMPLOYEES REMUNERATION (Audited information) Other employees whose remuneration fell within the following ranges:

2019 Number

2018 Number

Clinicians 70,001 to 80,000 71 97 80,001 to 90,000 67 65 90,001 to 100,000 58 80 100,001 to 110,000 82 69 110,001 to 120,000 70 70 120,001 to 130,000 46 39 130,001 to 140,000 43 41 140,001 to 150,000 30 28 150,001 to 160,000 23 29 160,001 to 170,000 30 28 170,001 to 180,000 9 13 180,001 to 190,000 7 3 190,001 to 200,000 1 0 200,001 to above 1 2 TOTAL 538 564 Other 70,001 to 80,000 21 22 80,001 to 90,000 15 11 90,001 to 100,000 4 4 100,001 to 110,000 1 1 110,001 to 120,000 1 0 TOTAL 42 38 Note: Clinicians are staff directly providing patient care, including medical, nursing, allied health professions, radiography, scientific, clinical psychology and pharmacy staff. The corresponding amounts have been restated to remove three individuals who we confirmed were not employed by the Board and had previously been included in error. The change is presentational and does not impact on the reported outturn for the previous year.

The information on higher paid employees remuneration does not include remuneration of directors which is disclosed in the Remuneration Report on pages 41 to 49.


50

STAFF NUMBERS AND EXPENDITURE (Audited Information) Executive

Board Members


Permanent Staff

Inward Secondees

Other Staff

Outward Secondees

2019 Total

2018 Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Employee Expenditure

Salaries and wages

620

151

411,671

0

0

0

412,442

417,854

Social Security Costs

81

8

42,979

0

0

0

43,068

45,030

NHS Scheme employers’ costs

56

0

55,227

0

0

0

55,283

56,900

Other Employers’ Pension costs

0

0

79

0

0

0

79

31

Secondees 139 27 0 31,735 0 (7,431) 24,470 1,955 Agency Staff and directly engaged

0

0

0

0

8,882

0

8,882

10,074

TOTAL 896 186 509,956 31,735 8,882 (7,431) 544,224 531,844

Not included in the total employee expenditure above were costs of staff engaged directly on capital projects charged to capital expenditure of £487,000 (2018 £461,000)

Salaries and Wages for the prior year have been restated to be £1.4 million less while Inward Secondees have been correspondingly increased by £1.4 million. This value is the amount paid as Distinction Award payment to University Honorary Consultants and is a more accurate reflection of those staff being externally provided rather than salaried staff. Inward Secondee costs include £22.2 million of charges for Doctors and Dentist in Training from August 2018 onwards. These training Grades would have been part of the salaries charge up to the point where a consolidation occurred nationally into a set of Lead Employer Boards, who then charge the other Boards for placing trainees within their services. Agency and directly engaged costs includes £2.14 million of directly engaged staff costs which reflects payments to non-employee individuals made through the payroll to ensure regularity compliance. Of this £2.04 million reflects GP out of hours services and cover for NHS Tayside run GP practices. Staff costs information is also disclosed in the Statement of Consolidated Comprehensive Net Expenditure and within Note 3a. To aid understanding of how the figure above relates to the Note 3a figures a reconciliation is included below. 2019 2018 £000s £000s Total employee expenditure as above 544,224 531,844 Add Secondee income included in Note 4 7,431 7,777 Total employee expenditure disclosed in note 3 551,655 539,621


51

2018/19 WTE 2017/18

WTE Staff Numbers Medical &

Dental Nursing & Midwifery

Other Staff All Types All Types

Executive Board Members 0 0 5 5 5 Non Executive Members 0 0 13 13 13 Permanent Staff 822 5,023 5,224 11,069 11,636 Inward Secondees 403 10 37 450 130 Other Direct Engaged Staff 16 0 3 19 17 Agency Staff 14 35 4 53 65 Outward Secondees (12) (19) (118) (149) (153) 1,243 5,049 5,168 11,460 11,713

2019 2018 Included in the total staff numbers were: Staff engaged directly on capital projects, charged to capital expenditure 10 11 Disabled staff 61 57 Special advisers 0 0 Staff Composition

An analysis of the number of persons of each gender who were directors, senior managers and employees of the Board is set out in the table:

2019 2018

Description Female Male Total Female Male Total

Executive Directors 2 3 5 2 3 5

Non-Executive Director 3 9 12 5 9 14

Senior Employees 235 345 580 236 364 600

Other 10,123 2,217 12,340 10,567 2,463 13,030

Totals 10,363 2,574 12,937 10,810 2,839 13,649

Note: the figures in the table above represent the mean whole time equivalent number of staff for the year.

Detailed disclosure information including the names and earnings related to directors is included in the

Remuneration Report on pages 41 to 49.

Sickness Absence Data The NHS Tayside absence rate for 2018/19 was 5.40% (2017/18 5.03%). The NHSScotland average sickness rate for 2018/19 was 5.39%. Staff Policies NHS Tayside has agreed employment policies which, as a minimum, meet the provisions of the nationally agreed PIN model policy. The Embracing Equality, Diversity, and Human Rights Policy seeks to ensure that the organisation has a framework which meets the aims of the Public Sector Equality Duty (PSED) to eliminate unlawful discrimination and to promote equal opportunities in employment policy and practice. NHS Tayside’s Occupational Health Department continues to provide specialist support to all staff including those with a disability who may require reasonable adjustments to ensure that they are appropriately supported within the workplace.


52

NHS Tayside seeks to follow good practice guidance on the employment of disabled people. NHS Tayside is committed to the Disability Confident scheme which ensures that disabled applicants who meet the minimum criteria as detailed within the person specification for the job will be guaranteed an interview. The Board will make sure that during the recruitment and selection process any reasonable adjustment that is requested by a disabled applicant is in place. NHS Tayside has also been awarded the Carers Kitemark for its policies and commitment to carers in the organisation. NHS Tayside operates within the nationally agreed terms and conditions for staff and the circulars associated with these groups. The Remuneration Committee provides oversight and scrutiny for staff on executive and senior manager grades. In collaboration with Local Authorities and local education providers NHS Tayside delivers a variety of programmes including Health and Social Care related Academies which provide training and relevant work experience for groups and individuals who have, so far, had difficulty in moving to positive destinations. The programmes aim, through multi agency partnership working to provide core training and work experience which promotes employability and enhances the recruitment pipeline for NHS Tayside. Other Employee Matters NHS Tayside is an equal opportunities employer. Policies are in place to guard against bullying, harassment and discrimination, to ensure that there is no unfair or unlawful discriminatory treatment or any barriers to employment or advancement in the Board. NHS Tayside has an Embracing Equality, Diversity and Human Rights Policy. The awareness training module which underpins the policy and national legislation has been refreshed and implemented. NHS Tayside recognises that the success of any organisation depends largely on the effective performance, engagement and attendance of all its employees. People are a valued resource. Therefore, as an employer NHS Tayside’s Promoting Attendance at Work Policy is designed to maintain a well-motivated and healthy workforce. The policy is intended to:

be supportive and positive;

promote fair and consistent treatment for everyone;

encourage, assist and make it easy for people to return to and stay in work; and

explain employees’ entitlements and the roles and responsibilities of HR.

The Trade Union (Facility Time Publication Requirements) Regulations 2017 came into force on 1 April

2017. The regulations place a legislative requirement on relevant public sector employers to collate and

publish, on an annual basis, a range of data on the amount and cost of facility time within their

organisation.


53

Trade Union Facility Time Number of employees who were relevant union officials during the period 1 April 2018 to 31 March 2019

Full-time equivalent employee number

166 Percentage of time spent on facility time Percentage of time

Number of Representatives

0% 87 1-50% 70 51-99% 3 100% 6 Percentage of pay bill spent on facility time Total cost of facility time 336,956 Total pay bill 511,136,000 Percentage of the total pay bill spent on facility time 0.07% Paid trade union activities Time spent on paid trade union activities as a percentage of total paid facility time hours

15%

Exit Packages (Audited Information) An analysis of the number and cost of exit packages agreed in year is set out in the table below:

Exit Package Cost Band

Total Number of Exit Packages by Cost Band

Total Number of Exit Packages by Cost Band

2019 2018 <£10,000 0 1 £10,000 - £25,000 1 0 £25,000 - £50,000 0 1 £50,000 - £100,00 1 0 £100,000-£150,000 0 0 Total Number of Exit Packages by Type

2 2

Total Resource Cost (£’000) 86 49

There were no compulsory redundancies in either 2018/19 or 2017/18. All the exit packages were classified as other departures agreed.


54

2.3 PARLIAMENTARY ACCOUNTABILITY REPORT Losses and Special Payments

On occasion, the Board may be required to write off outstanding debt that is assessed as no longer recoverable, make an ex gratia payment or to pay compensation for a loss incurred by a third party including patients or staff. All such payments including all clinical negligence compensation claims, in excess of the Board’s delegated limits, require the approval of the SGHSCD. The following special payments and losses have been approved by the Board and are included in the financial statements for 2018/19:

No. of

cases

£000 No. of

cases

£000

2018/19 2018/19 2017/18 2017/18

Clinical Negligence and Employer Liability claims 45 5,796 54 3,186

Other losses and ex gratia payments 319 97 458 124

Total Special payments and losses 364 5,893 512 3,310

In 2018/19 the Board was required to pay out 4 claims, £1.97 million, £1.87 million, £0.56 million and £0.25 million, in respect of clinical negligence cases (2017/18: 2 claims for £0.41 million and £0.37 million). No other individual losses or claims with a value exceeding £0.25 million were settled during the year. The Board is also required to provide for all clinical negligence and employer liability claims notified to it and which will be settled at a future date. Details of these provisions and an explanation of the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS) can be found in note 13.

Fees and Special Charges

The Board had no commercial trading activity where the full annual cost exceeded £1 million (2017/18 Nil).

Mr Grant Archibald Chief Executive 27 June 2019 Tayside Health Board


55

Independent auditor’s report to the members of Tayside Health Board, the Auditor General for Scotland and the Scottish Parliament

Report on the audit of the financial statements

Opinion on financial statements

I have audited the financial statements in the annual report and accounts of Tayside Health Board and its group for the year ended 31 March 2019 under the National Health Service (Scotland) Act 1978. The financial statements comprise the Consolidated Statement of Comprehensive Net Expenditure, the Consolidated Statement of Financial Position, the Consolidated Statement of Cashflows, the Consolidated Statement of Changes in Taxpayers' Equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as interpreted and adapted by the 2018/19 Government Financial Reporting Manual (the 2018/19 FReM).

In my opinion the accompanying financial statements:

give a true and fair view in accordance with the National Health Service (Scotland) Act 1978 and directions made thereunder by the Scottish Ministers of the state of affairs of the board and its group as at 31 March 2019 and of the net expenditure for the year then ended;

have been properly prepared in accordance with IFRSs as adopted by the European Union, as interpreted and adapted by the 2018/19 FReM; and

have been prepared in accordance with the requirements of the National Health Service (Scotland) Act 1978 and directions made thereunder by the Scottish Ministers.

Basis of opinion

I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Auditor General for Scotland. My responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of my report. I was appointed by the Auditor General on 18 July 2016. The period of total uninterrupted appointment is 3 years. I am independent of the board and its group in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the board. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Conclusions relating to going concern basis of accounting I have nothing to report in respect of the following matters in relation to which the ISAs (UK) require me to report to you where:

the use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

the board has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about its ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

http://www.audit-scotland.gov.uk/uploads/docs/report/2016/code_audit_practice_16.pdf


56

Risks of material misstatement I have reported in a separate Annual Audit Report, which is available from the Audit Scotland website, the most significant assessed risks of material misstatement that I identified and my conclusions thereon. Responsibilities of the Accountable Officer for the financial statements As explained more fully in the Statement of the Chief Executive's Responsibilities as the Accountable Officer, the Accountable Officer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Accountable Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Accountable Officer is responsible for assessing the ability of the board and its group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless deemed inappropriate.

Auditor’s responsibilities for the audit of the financial statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. I therefore design and perform audit procedures which respond to the assessed risks of material misstatement due to fraud.

A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities.This description forms part of my auditor’s report. Other information in the annual report and accounts

The Accountable Officer is responsible for the other information in the annual report and accounts. The other information comprises the information other than the financial statements, the audited part of the Remuneration and Staff Report, and my independent auditor’s report. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon except on matters prescribed by the Auditor General for Scotland to the extent explicitly stated later in this report.

http://www.audit-scotland.gov.uk/our-work/annual-audits

https://www.frc.org.uk/Our-Work/Audit-and-Actuarial-Regulation/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx


57

In connection with my audit of the financial statements, my responsibility is to read all the other information in the annual report and accounts and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Report on regularity of expenditure and income

Opinion on regularity

In my opinion in all material respects the expenditure and income in the financial statements were incurred or applied in accordance with any applicable enactments and guidance issued by the Scottish Ministers.

Responsibilities for regularity The Accountable Officer is responsible for ensuring the regularity of expenditure and income. I am responsible for expressing an opinion on the regularity of expenditure and income in accordance with the Public Finance and Accountability (Scotland) Act 2000.

Report on other requirements

Opinions on matters prescribed by the Auditor General for Scotland

In my opinion, the audited part of the Remuneration and Staff Report has been properly prepared in accordance with the National Health Service (Scotland) Act 1978 and directions made thereunder by the Scottish Ministers.

In my opinion, based on the work undertaken in the course of the audit:

the information given in the Performance Report for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the National Health Service (Scotland) Act 1978 and directions made thereunder by the Scottish Ministers; and

the information given in the Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the National Health Service (Scotland) Act 1978 and directions made thereunder by the Scottish Ministers.

Matters on which I am required to report by exception

I am required by the Auditor General for Scotland to report to you if, in my opinion:

adequate accounting records have not been kept; or

the financial statements and the audited part of the Remuneration and Staff Report are not in agreement with the accounting records; or

I have not received all the information and explanations I require for my audit; or

there has been a failure to achieve a prescribed financial objective.

I have nothing to report in respect of these matters.


58

Conclusions on wider scope responsibilities

In addition to my responsibilities for the annual report and accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice are set out in my Annual Audit Report.

Use of my report This report is made solely to the parties to whom it is addressed in accordance with the Public Finance and Accountability (Scotland) Act 2000 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.

Fiona Mitchell-Knight FCA

Audit Director

Audit Scotland

4th Floor, South Suite

The Athenaeum Building

8 Nelson Mandela Place

Glasgow

G2 1BT

27 June 2019


59

STATEMENT OF CONSOLIDATED COMPREHENSIVE NET EXPENDITURE FOR THE YEAR ENDED 31 MARCH 2019

Note

2019 £’000

2018 £’000

Employee expenditure 3a 551,655 539,621 Other operating expenditure 3b

Independent Primary Care Services 123,687 118,701 Drugs and medical supplies 187,633 191,046 Other health care expenditure 669,560 667,631

Gross expenditure for the year 1,532,535 1,516,999 Less: operating income 4 (611,121) (617,043) Associates and joint ventures accounted for on an equity basis (2,866) 741 Net expenditure for the year 918,548 900,697 OTHER COMPREHENSIVE NET EXPENDITURE 2019

£’000 2018 £’000

Net (gain)/loss on revaluation of property, plant and equipment (8,555) (12,529) Net(gain)/loss on revaluation of investments (900) 272 ______ ______ Other comprehensive expenditure (9,455) (12,257) Comprehensive net expenditure 909,093 888,440 The Notes to the Accounts, numbered 1 to 25 form an integral part of these Accounts.

Total net income includes Endowment Fund net expenditure of £4.4 million and £2.9 million relating to

three joint ventures. The joint ventures are Angus, Dundee and Perth and Kinross Integration Joint

Boards, which as a result of Board representatives comprising 50% of the voting members of the three

respective Boards, required to be accounted for on an equity basis.


60

MEMORANDUM DISCLOSURES SUMMARY OF CORE REVENUE RESOURCE OUTTURN

Note 2019 £’000

2019 £’000

Net expenditure SOCNE 918,548 Total non core expenditure (31,721) Family Health Service non-discretionary allocation (45,481) Donated assets income 2a 111 Endowment net expenditure 4,383 Associates and joint ventures accounted for on an equity basis 2,866 Total core expenditure 848,706 Core Revenue Resource Limit 848,834 Saving/(excess) against Core Revenue Resource Limit 128 SUMMARY OF NON CORE REVENUE RESOURCE OUTTURN Capital grants to/(from) other bodies 141 Depreciation/amortisation 16,707 Annually Managed Expenditure – impairments 3,900 Annually Managed Expenditure – creation of provisions (949) Annually Managed Expenditure – depreciation of donated assets 2a 551 Additional Scottish Government non-core funding 8,231 IFRS PFI expenditure 3,140 Total Non Core Expenditure 31,721 Non Core Revenue Resource Limit 31,721 Saving/(excess) against Non Core Revenue Resource Limit 0 SUMMARY RESOURCE OUTTURN Resource

£’000

Expenditure

£’000

Saving/ (Excess)

£’000 Core 848,834 848,706 128 Non Core 31,721 31,721 0 Total 880,555 880,427 128 Following a request for financial brokerage of £17.6 million and agreement to this by the Scottish Government Health and Social Care Directorate, Tayside Health Board met the revenue resource target for the year. The Notes to the Accounts, numbered 1 to 25 form an integral part of these Accounts.


61

CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 MARCH 2019

Note

Consolidated 2019 £’000

Board 2019 £’000


Board 2018 £’000

Property, plant and equipment 7c 531,330 531,306 531,771 531,747 Intangible assets 6a 312 312 595 595 Financial assets:

Investments 10 24,488 277 23,813 277 Investments in associates and joint ventures 5,626 0 2,760 0 Trade and other receivables 9 1,978 1,978 2,873 2,873

Total non-current assets 563,734 533,873 561,812 535,492 Current Assets Inventories 8 8,389 8,363 8,130 8,103 Financial assets:

Trade and other receivables 9 65,239 65,112 75,811 75,476 Cash and cash equivalents 11 5,034 170 558 393

Assets classified as held for sale 7b 861 861 861 861 Total current assets 79,523 74,506 85,360 84,833 Total assets 643,257 608,379 647,172 620,325

Current liabilities Provisions 13a (16,441) (16,441) (10,008) (10,008) Financial liabilities:

Trade and other payables 12 (83,930) (81,843) (91,918) (89,857) Total current liabilities (100,371) (98,284) (101,926) (99,865) Non-current assets plus/less net current assets/liabilities

542,886

510,095

545,246

520,460

Non-current liabilities Provisions 13a (77,275) (77,275) (94,746) (94,746) Financial liabilities:

Trade and other payables 12 (110,452) (110,452) (89,483) (89,483) Total non-current liabilities (187,727) (187,727) (184,229) (184,229)

Assets less liabilities 355,159 322,368 361,017 336,231 Taxpayers’ Equity General fund SoCTE 105,247 105,247 120,500 120,500 Revaluation reserve SoCTE 217,121 217,121 215,731 215,731 Other reserves – associates and joint ventures SoCTE 5,626 0 2,760 0 Fund held on Trust SoCTE 27,165 0 22,026 0 Total taxpayers’ equity 355,159 322,368 361,017 336,231 The Notes to the Accounts, numbered 1 to 25 form an integral part of these Accounts.

The financial statements on pages 59 to 126 were approved by the Board on 27 June 2019.

…………………………………………………………Mr Alan Gray, Director of Finance

…………………………………………………………Mr Grant Archibald, Chief Executive


62

STATEMENT OF CONSOLIDATED CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2019

Note 2019 £’000

2018 £’000

Cash flows from operating activities Net expenditure SoCTE (918,548) (900,697) Adjustments for non-cash transactions 2a 22,070 24,281 Add back: interest payable recognised in net operating expenditure 2b 8,760 9,241 Deduct: interest receivable recognised in net operating expenditure 4 (62) (41) Movements in working capital 2c 12,655 (2,722) Net cash outflow from operating activities 24c (875,125) (869,938) Cash flows from investing activities Purchase of property, plant and equipment 24c (36,536) (9,518) Purchase of intangible assets 24c 0 (247) Investment additions 10 (4,983) (2,035) Proceeds of disposal of property, plant and equipment (66) 1,327 Proceeds of disposal of intangible assets 176 0 Receipts from sale of investments 5,064 2,368 Interest received 62 41 Net cash outflow from investing activities 24c (36,283) (8,064) Cash flows from financing activities Funding SoCTE 903,407 889,011 Movement in general fund working capital SoCTE 1,043 (1,265) Cash drawn down 904,450 887,746 Capital element of payments in respect of finance leases and on-balance sheet PFI contracts

2c 21,460 (1,718)

Interest paid 273 (126) Interest element of finance leases and on-balance sheet PFI/PPP contracts

2b

(9,033)

(9,115)

Net Financing 24c 917,150 876,787 Net increase/(decrease) in cash and cash equivalents in the period 5,742 (1,215) Cash and cash equivalents at the beginning of the period (1,014) 201 Cash and cash equivalents at the end of the period 4,728 (1,014) Reconciliation of net cash flow to movement in net debt/cash Increase/(decrease) in cash in year 11 5,742 (1,215) Net debt/cash at 1 April (1,014) 201 Net debt/cash at 31 March 4,728 (1,014) The Notes to the Accounts, numbered 1 to 25 form an integral part of these Accounts.


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CONSOLIDATED STATEMENT OF CHANGES IN TAXPAYERS’ EQUITY FOR THE YEAR ENDED 31 MARCH 2019

Note

General Fund

Revaluation Reserve

Other reserve –

associates and joint ventures

Funds Held on

Trust

Total Reserves

£’000 £’000 £’000 £’000

Balance at 31 March 2018 120,500 215,731 2,760 22,026 361,017

Retrospective restatements for changes in accounting policy and material errors

21

0

0

0

0

0

Restated balance at 1 April 2018 120,500 215,731 2,760 22,026 361,017

Changes in taxpayers’ equity for 2018-19

Net gain/(loss) on revaluation/indexation of property, plant and equipment

7a

0

8,555

0

0

8,555

Net gain/(loss) on revaluation of investments

10

0

0

0

756

756

Impairment of property, plant and equipment

0

(3,900)

0

0

(3,900)

Revaluation and impairments taken to operating costs

2a

0

3,900

0

0

3,900

Transfers between reserves 7,165 (7,165) 0 0 0

Other non cash costs – IFRS 9 Impairment of Receivables

25

(28)

0

0

0

(28)

Net operating cost for the year (925,797) 0 2,866 4,383 (918,548)

Total recognised income and expense for 2018-19

(918,660) 1,390 2,866 5,139 (909,265)

Funding

Drawn down CFS 904,450 0 0 0 904,450

Movement in General Fund (creditor)/debtor

CFS

(1,043)

0

0

0

(1,043)

Balance at 31 March 2019 SoFP 105,247 217,121 5,626 27,165 355,159

The Notes to the Accounts, numbered 1 to 25 form an integral part of these Accounts.


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CONSOLIDATED STATEMENT OF CHANGES IN TAXPAYERS’ EQUITY (PRIOR YEAR)

Note General Fund

Revaluation Reserve

Other reserve –

associates and joint ventures

Funds Held on

Trust

Total Reserves

£’000 £’000 £’000 £’000

Balance at 31 March 2017 121,958 210,313 3,501 24,674 360,446

Changes in taxpayers’ equity for 2017-18

Net gain/(loss) on revaluation/indexation of property, plant and equipment

7a 0 12,529 0 0 12,529

Net gain/(loss) on revaluation of available for sale financial assets

0 0 0 (251) (251)

Impairment of property, plant and equipment

0 (2,114) 0 0 (2,114)

Revaluation and impairments taken to operating costs

2a 0 2,114 0 0 2,114

Transfers between reserves 7,111 (7,111) 0 0 0

Other non cash costs – Previous Investment in East Central Territory Hubco

(21) 0 0 0 (21)

Net operating cost for the year (897,559) 0 (741) (2,397) (900,697)

Total recognised income and expense for 2017-18

(890,469) 5,418 (741) (2,648) (888,440)

Funding

Drawn down CFS 887,746 0 0 0 887,746

Movement in General Fund (creditor)/debtor

CFS

1,265

0

0

0

1,265

Balance at 31 March 2018 SoFP 120,500 215,731 2,760 22,026 361,017

The Notes to the Accounts, numbered 1 to 25 form an integral part of these Accounts.


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NOTE 1 ACCOUNTING POLICIES 1. Authority

In accordance with the accounts direction issued by Scottish Ministers under section 19(4) of the Public Finance and Accountability (Scotland) Act 2000 appended, these Accounts have been prepared in accordance with the Government Financial Reporting Manual (FReM) issued by HM Treasury, which follows International Financial Reporting Standards as adopted by the European Union (IFRS as adopted by the EU), International Financial Reporting interpretations Committee (IFRIC) interpretations and the Companies Act 2006 to the extent that they are meaningful and appropriate to the public sector. They have been applied consistently in dealing with items considered material in relation to the accounts. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed

in section 29 below. (a) Standards, amendments and interpretation effective in current year

The following accounting standards have been applied for the first time in 2018-19:

IFRS 9 Financial Instruments The standard replaces IAS 39 and introduces a single approach to classification and measurement of financial instruments; a new forward- looking expected loss impairment model; and a revised approach to hedge accounting. IFRS 15 Revenue from Contracts with Customers The standard introduces greater disclosure requirements, as well as a new five stage model for assessing and recognising revenue from contracts with customers. Both standards have been applied retrospectively and without restatement of prior year figures.

(b) Standards, amendments and interpretation early adopted this year There are no new standards, amendments or interpretations early adopted this year.

(c) Standards, amendments and interpretation issued but not adopted this year

The following standards have been issued but are not yet effective:

IFRS 16 – Leases (IAS 17 replacement);

IFRS 17 Insurance Contracts (new). HM Treasury have advised that the application of IFRS 16, the revised standard for lease accounting, will now be effective from financial year 2020/21. Implementation of IFRS 16 will require most leased buildings, plant and equipment to be included in the Statement of Financial Position as a “right of use” asset and a corresponding liability. This is a departure from the current accounting standard (IAS 17) which differentiates between an operating lease and a finance lease with the cost of all operating leases charged annually to operating costs. Work is underway to accurately quantify the impact of adoption of this new standard which is expected to have a material impact on the value of assets and liabilities reported in the Board’s Financial Statements. This work involves the establishment of a local lease register to record the key information required by the standard and to support the calculation of the value of the right of use assets and corresponding liability on the Board’s Statement of Financial Position.


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The NHS Scotland Technical Accounting Group (TAG) has also established a national sub group to lead the development of accounting guidance and ensure consistency of application of the standard across NHS Scotland Boards, including the definition of low value and short term lease arrangements. This group will also support the Scottish Government Health Directorates and NHS Boards in the assessment of the potential budgetary impact of adoption of the new standard. The impact on the financial statements as a result of all other standards mentioned above, is expected to be minimal.

2. Basis of Consolidation In accordance with IFRS 10 – Consolidated Financial Statements, the financial statements consolidate the Tayside NHS Board Endowment Fund (Tayside Health Fund). Tayside NHS Board Endowment Fund was established by the NHS (Scotland) Act 1978. The legal framework under which charities operate in Scotland is the Charities and Trustee Investment (Scotland) Act 2005. Under the 1978 Act Endowment Trustees are also members of the NHS Board. The Board members (who are also Trustees) are appointed by Scottish Ministers. Tayside NHS Board Endowment Fund is registered with the Office of the Scottish Charity Regulator (OSCR) and is required to prepare and submit Audited Financial Statements to OSCR on an annual basis. The basis of the consolidation used is merger accounting. Any intragroup transactions between the Board and the Endowment Fund are eliminated on consolidation. The integration of health and social care services under the terms of the Public Bodies (Joint Working) (Scotland) Act 2014 and associated secondary legislation impacts on Health Board disclosure requirements in the annual accounts. In accordance with IAS 28 – Investments in Associates and Joint Arrangements, the primary financial statements have been amended for the additional disclosure required to accurately reflect the interest of Integration Joint Boards (IJBs) using the equity method of accounting. Note 24 to the Annual Accounts, details how these consolidated Financial Statements have been calculated.

3. Going Concern The accounts are prepared on the going concern basis, which provides that the entity will continue in operational existence for the foreseeable future.

4. Accounting Convention The Accounts are prepared on a historical cost basis, as modified by the revaluation of property, plant and equipment, intangible assets, inventories and financial assets and liabilities (including derivative instruments) at fair value.

5. Funding

5.1 Tayside Health Board Most of the expenditure of the Health Board as Commissioner is met from funds advanced by the Scottish Government within an approved revenue resource limit (RRL). Cash drawn down to fund expenditure within this approved revenue resource limit is credited to the general fund. All other income receivable by the Board that is not classed as funding is recognised in the year in which it is receivable.


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Where income is received for a specific activity which is to be delivered in the following financial year, that income is deferred. Brokerage is additional funding advanced to the Board by Scottish Government Health and Social Care Department (SGHSCD). The cash drawn down is credited to the general fund. Income from the sale of non-current assets is recognised only when all material conditions of the sale have been met, and is measured as the sums due under the sale contract. Non -discretionary funding out with the RRL is allocated to match actual expenditure incurred

for the provision of specific pharmaceutical, dental or ophthalmic services identified by the Scottish Government (SGHSCD). Non -discretionary expenditure is disclosed in the accounts

and deducted from operating costs charged against the RRL in the Statement of Resource Outturn. Funding for the acquisition of capital assets received from SGHSCD is credited to the general fund when cash is drawn down. Expenditure on goods and services is recognised when, and to the extent that they have been received, and is measured at the fair value of those goods and services. Expenditure is recognised in the Statement of Comprehensive Net Expenditure except where it results in the creation of a non-current asset such as property, plant and equipment.

5.2 Tayside Health Fund Voluntary income from donations, gifts and legacies is recognised when Tayside Health Fund is entitled to regard such income as receivable. Investment income is stated gross of taxation recoverable and is accounted for on an accruals basis. Expenditure is accounted for on an accruals basis and is recognised once there is a legal or constructive obligation committing the charity to the expenditure.

6 Property, Plant and Equipment The treatment of capital assets in the accounts (capitalisation, valuation, depreciation, particulars

concerning donated assets) is in accordance with the NHS Capital Accounting Manual. Title to properties included in the accounts is held by Scottish Ministers.

6.1 Recognition

Property, Plant and Equipment is capitalised where: it is held for use in delivering services or

for administrative purposes; it is probable that future economic benefits will flow to, or service

potential be provided to, the Board; it is expected to be used for more than one financial year; and the cost of the item can be measured reliably. All assets falling into the following categories are capitalised: 1) Property, plant and equipment assets which are capable of being used for a period which

could exceed one year, and have a cost equal to or greater than £5000. 2) In cases where a new hospital would face an exceptional write off of items of equipment

costing individually less than £5,000, the Board has the option to capitalise initial revenue equipment costs with a standard life of 10 years.

3) Assets of lesser value may be capitalised where they form part of a group of similar assets purchased at approximately the same time and cost over £20,000 in total, or where they are part of the initial costs of equipping a new development and total over £20,000.


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6.2 Measurement

Valuation: All property, plant and equipment assets are measured initially at cost, representing the costs directly attributable to acquiring or constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner intended by management. All assets that are not held for their service potential (i.e. investment properties and assets held for sale), including operational assets which are surplus to requirements where there are no restrictions on disposal which would prevent access to the market, are measured subsequently at fair value as follows: Specialised NHS land, buildings, equipment, installations and fittings are stated at depreciated replacement cost, as a proxy for fair value as specified in the FReM. Non -specialised land and buildings, such as offices, are stated at fair value. Valuations of all land and buildings assets within Tayside NHS Board have been reassessed as at 31 January 2019, by a consortium of independent professional valuers appointed by the Board. The valuers have stated that there will only be a nominal difference in valuation between 31 January 2019 and 31 March 2019. The valuations are carried out in accordance with the Royal Institution of Chartered Surveyors (RICS) Appraisal and Valuation Manual insofar as these terms are consistent with the agreed requirements of the Scottish Government. Non-specialised equipment, installations and fittings are valued at fair value. The Board values such assets using the most appropriate valuation methodology available (for example, appropriate indices). A depreciated historical cost basis is used as a proxy for fair value in respect of such assets which have short useful lives or low values (or both). Assets under construction are valued at current cost. This is calculated by the expenditure incurred to which an appropriate index is applied to arrive at current value. These are also subject to impairment review. To meet the underlying objectives established by SGHSCD, the following accepted variations of the RICS Appraisal and Valuation Manual have been required: Specialised operational assets are valued on a modified replacement cost basis to take account of modern substitute building materials and locality factors only. Operational assets which are in use delivering front line services or back office functions, and surplus assets with restrictions on their disposal, are valued at current value in existing use.

Assets have been assessed as surplus where there is no clear plan to bring the asset back into future use as an operational asset. Subsequent expenditure: Subsequent expenditure is capitalised into an asset’s carrying value when it is probable the future economic benefits associated with the item will flow to the Board and the cost can be measured reliably. Where subsequent expenditure does not meet these criteria the expenditure is charged to the Statement of Comprehensive Net Expenditure. If part of an asset is replaced, then the part it replaces is de-recognised, regardless of whether or not it has been depreciated separately.


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Revaluations and Impairment:

Increases in asset values arising from revaluations are recognised in the revaluation reserve,

except where, and to the extent that, they reverse an impairment previously recognised in the Statement of Comprehensive Net Expenditure, in which case they are recognised as income. Movements on revaluation are considered for individual assets rather than groups or land/buildings together. Permanent decreases in asset values and impairments are charged gross to the Statement of Comprehensive Net Expenditure. Any related balance on the revaluation reserve is transferred to the General Fund. Gains and losses on revaluation are reported in the Statement of Comprehensive Net Expenditure. Temporary decreases in asset values or impairments are charged to the revaluation reserve to the extent that there is an available balance for the asset concerned, and thereafter are charged to the Statement of Comprehensive Net Expenditure.

6.3 Depreciation Items of Property, Plant and Equipment are depreciated to their estimated residual value over their remaining useful economic lives in a manner consistent with the consumption of economic or service delivery benefits. Depreciation is charged on each main class of tangible asset as follows: 1) Freehold land is considered to have an infinite life and is not depreciated. 2) Assets in the course of construction and residual interests in off- balance sheet PFI

contract assets are not depreciated until the asset is brought into use or reverts to the Board, respectively.

3) Property, Plant and Equipment which has been reclassified as ‘Held for Sale’ ceases to be depreciated upon the reclassification.

4) Buildings, installations and fittings are depreciated on current value over the estimated remaining life of the asset, as advised by the appointed valuer. They are assessed in the context of the maximum useful lives for building elements.

5) Equipment is depreciated over the estimated life of the asset. 6) Property, plant and equipment held under finance leases are depreciated over the

shorter of the lease term and the estimated useful life. Depreciation is charged on a straight line basis. The following asset lives have been used:

Asset Category/Component Useful Life (years)

Structure 25-100

Engineering 25-70

External Plant 25-50

Medical Equipment 3-15

Catering Equipment 5-15

General Equipment 4-15

Furniture 8-12

Fire Prevention Equipment 12-18

Mainframe information technology installations 2-8

Medical furniture 7-15

Telecommunication system 3-8

Vehicles 4-17


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Initial Revenue Miscellaneous Equipment 10

Landscaping 15-30

Services 10-31

Surfacing 5-15

Fixed plant 10-25

Internal upgrade to fabric of building 12-25

7. Intangible Assets

7.1 Recognition Intangible assets are non-monetary assets without physical substance which are capable of being sold separately from the rest of the Board’s business or which arise from contractual or other legal rights. They are recognised only where it is probable that future economic benefits will flow to, or service potential be provided to, the Board and where the cost of the asset can be measured reliably. Intangible assets that meet the recognition criteria are capitalised when they are capable of being used in a Board’s activities for more than one year and they have a cost of at least £5,000. The main classes of intangible assets recognised are software licences and information technology software. Internally generated intangible assets.

Internally generated goodwill, brands, mastheads, publishing titles, customer lists and similar items are not capitalised as intangible assets. Expenditure on research is not capitalised.

Expenditure on development is capitalised only where all of the following can be demonstrated:

the project is technically feasible to the point of completion and will result in an intangible asset for sale or use;

the Board intends to complete the asset and sell or use it;

the Board has the ability to sell or use the asset;

how the intangible asset will generate probable future economic or service delivery benefits e.g. the presence of a market for it or its output, or where it is to be used for internal use, the usefulness of the asset;

adequate financial, technical and other resources are available to the Board to complete the development and sell or use the asset; and

the Board can measure reliably the expenses attributable to the asset during development.

Expenditure so deferred is limited to the value of future benefits. Software: Software which is integral to the operation of hardware e.g. an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software which is not integral to the operation of hardware e.g. application software, is capitalised as an intangible asset.


71

Software licences: Purchased computer software licences are capitalised as intangible assets where expenditure of at least £5,000 is incurred.

7.2 Measurement

Valuation Intangible assets are recognised initially at cost, comprising all directly attributable costs needed to create, produce and prepare the asset to the point that it is capable of operating in the manner intended by management. Subsequently intangible assets that are not held for their service potential (i.e. assets held for sale), including operational assets which are surplus to requirements where there are no restrictions on disposal which would prevent access to the market, are measured at fair value. Where an active (homogeneous) market exists, intangible assets are carried at fair value. Where no active market exists, the intangible asset is revalued, using indices or some suitable model, to the lower of depreciated replacement cost and value in use where the asset is income generating. Where there is no value in use, the intangible asset is valued using depreciated replacement cost. These measures are a proxy for fair value. Revaluation and impairment Increases in asset values arising from revaluations are recognised in the revaluation reserve, except where, and to the extent that, they reverse an impairment previously recognised in the Statement of Comprehensive Net Expenditure, in which case they are recognised in income. Permanent decreases in asset values and impairments are charged gross to the Statement of Comprehensive Net Expenditure. Any related balance on the revaluation reserve is transferred to the General Fund. Temporary decreases in asset values or impairments are charged to the revaluation reserve to the extent that there is an available balance for the asset concerned, and thereafter are charged to the Statement of Comprehensive Net Expenditure. Intangible assets held for sale are reclassified to ‘non-current assets held for sale’ measured at the lower of their carrying amount or ‘fair value less costs to sell’. Operational assets which are in use delivering front line services or back office functions, and surplus assets with restrictions on their disposal, are valued at current value in existing use. Assets have been assessed as surplus where there is no clear plan to bring the asset back into future use as an operational asset.

7.3 Amortisation

Intangible assets are amortised to their estimated residual value over their remaining useful economic lives in a manner consistent with the consumption of economic or service delivery benefits. Amortisation is charged to the Statement of Comprehensive Net Expenditure on each main class of intangible asset as follows: 1) Software. Amortised over their expected useful life. 2) Software licences. Amortised over the shorter term of the licence and their useful

economic lives. 3) Intangible assets which has been reclassified as ‘Held for Sale’ ceases to be amortised

upon the reclassification.


72

Amortisation is charged on a straight line basis. The following asset lives have been used:

Asset Category/Component Useful Life (years)

Software 5

Software Licences 5

8. Non-current Assets Held for Sale

Non-current assets intended for disposal are reclassified as ‘Held for Sale’ once all of the following criteria are met:

The asset is available for immediate sale in its present condition subject only to terms which are usual and customary for such sales;

The sale must be highly probable i.e.:

management are committed to a plan to sell the asset;

an active programme has begun to find a buyer and complete the sale;

the asset is being actively marketed at a reasonable price;

the sale is expected to be completed within 12 months of the date of classification as ‘Held for Sale’; and

the actions needed to complete the plan indicate it is unlikely that the plan will be

dropped or significant changes made to it. Following reclassification, the assets are measured at the lower of their existing carrying amount and their ‘fair value less costs to sell’. Depreciation ceases to be charged and the assets are not revalued, except where the ‘fair value less costs to sell’ falls below the carrying amount. Assets are de-recognised when all material sale contract conditions have been met. Property, plant and equipment which is to be scrapped or demolished does not qualify for recognition as ‘Held for Sale’ and instead is retained as an operational asset and the asset’s economic life is adjusted. The asset is de-recognised when scrapping or demolition occurs.

9. Donated Assets

Non-current assets that are donated or purchased using donated funds are included in the Statement of Financial Position initially at the current full replacement cost of the asset. The accounting treatment, including the method of valuation, follows the rules in the NHS Capital Accounting Manual. Properties held for investment by Tayside NHS Board Endowment Fund are stated at current market value and are revalued annually by professional independent valuers with any resulting surplus or deficit credited or charged to income or expenditure.

10. Sale of Property, Plant and Equipment, Intangible Assets and Non-current Assets Held for Sale

Disposal of non-current assets is accounted for as a reduction to the value of assets equal to the net book value of the assets disposed. When set against any sales proceeds, the resulting gain or loss on disposal will be recorded in the statement of Comprehensive Net Expenditure. Non-current assets held for sale will include assets transferred from other categories and will reflect any resultant changes in valuation.


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11. Leasing

Finance Leases Where substantially all risks and rewards of ownership of a leased asset are borne by the Board, the asset is recorded as Property, Plant and Equipment and a corresponding liability is recorded. Assets held under finance leases are valued at their fair values and are depreciated over the remaining period of the lease in accordance with IFRSs. The asset and liability are recognised at the inception of the lease, and are de-recognised when the liability is discharged, cancelled or expires. The minimum lease payments (annual rental less operating costs e.g. maintenance and contingent rental) are apportioned between the repayment of the outstanding liability and a finance charge. The annual finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability using either the implicit interest rate or another relevant basis of estimation such as the sum of the digits method. Finance charges are recorded as interest payable in the Statement of Comprehensive Net Expenditure. Contingent rental and operating costs are charged as expenses in the periods in which they are incurred.

Operating Leases

Other leases are regarded as operating leases and the rentals are charged to expenditure on a straight -line basis over the term of the lease. Operating lease incentives received are added to the

lease rentals and charged to expenditure over the life of the lease. Leases of Land and Buildings Where a lease is for land and buildings, the land component is separated from the building component and the classification for each is assessed separately. Leased land is treated as an operating lease unless title to the land is expected to transfer. Leasing of Board Assets to Other bodies Income received from leasing assets to other bodies is accounted for as it falls due.

12. Impairment of Non-financial Assets

Assets that are subject to depreciation and amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Where an asset is not held for the purpose of generating cash flows, value in use is assumed to equal the cost of replacing the service potential provided by the asset, unless there

has been a reduction in service potential. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non financial assets that suffer an impairment are reviewed for possible reversal of the impairment. Impairment losses charged to the Statement of Comprehensive Net Expenditure are deducted from future operating costs to the extent that they are identified as being reversed in subsequent revaluations.

13. General Fund Receivables and Payables

Where the Health Board has a positive net cash book balance at the year end, a corresponding creditor is created and the general fund debited with the same amount to indicate that this cash is repayable to SGHSCD. Where the Health Board has a net overdrawn cash position at the year end, a corresponding debtor is created and the general fund credited with the same amount to indicate that additional cash is to be drawn down from SGHSCD.


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14. Inventories

Inventories are valued at the lower of cost and net realisable value. Taking into account the high turnover of NHS inventories, the use of average purchase price is deemed to represent current cost. Work in progress is valued at the cost of the direct materials plus the conversion costs and other costs incurred to bring the goods up to their present location, condition and degree of completion.

15. Losses and Special Payments

Operating expenditure includes certain losses which would have been made good through insurance cover had the NHS not been bearing its own risks. Had the NHS provided insurance cover, the insurance premiums would have been included as normal revenue expenditure.

16. Employee Benefits

Short-term Employee Benefits Salaries, wages and employment-related payments are recognised in the year in which the service is received from employees. The cost of annual leave and flexible working time entitlement earned but not taken by employees at the end of the year is recognised in the financial statements to the extent that employees are permitted to carry-forward leave into the following year. Pension Costs The Board participates in the NHS Superannuation Scheme (Scotland). This scheme is an unfunded statutory pension scheme with benefits underwritten by the UK Government. The scheme is financed by payments from employers and those current employees who are members of the scheme and paying contributions at progressively higher marginal rates based on pensionable pay as specified in the regulations. The Board is unable to identify its share of the underlying notional assets and liabilities of the scheme on a consistent and reasonable basis and therefore accounts for the scheme as if it were defined contribution scheme, as required by IAS 19 ‘Employee Benefits’.

As a result, the amount charged to the Statement of Comprehensive Net Expenditure represents the Board’s employer contributions payable to the scheme in respect of the year. The contributions deducted from employees are reflected in the gross salaries charged and are similarly remitted to the exchequer. The pension cost is assessed every four years by the Government Actuary and this valuation determines the rate of contributions required. The most recent actuarial valuation is published by the Scottish Public Pensions Agency (SPPA) and is available on their website. Additional pension liabilities arising from early retirements are not funded by the scheme except where the retirement is due to ill health. The full amount of the liability for the additional costs is charged to the Statement of Comprehensive Net Expenditure at the time the Board commits itself to the retirement, regardless of the method of payment.

17. Clinical and Medical Negligence Costs

Employing health bodies in Scotland are responsible for meeting medical negligence costs up to a threshold per claim. Costs above this threshold are reimbursed to Boards from a central fund held as part of the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS) by SGHSCD. The Board provides for all claims notified to the NHS Central Legal Office according to the value of the claim and the probability of settlement. Claims assessed as ‘Category 3’ are deemed most likely and provided for in full, those in ‘Category 2’ as 50% of the claim and those in ‘Category 1’ as nil. The balance of the value of claims not provided for is disclosed as a contingent liability. This procedure is intended to estimate the amount considered to be the liability in respect of any claims outstanding and which will be recoverable from CNORIS in the event of payment by an individual health body. The corresponding recovery in respect of amounts provided for is recorded as a debtor and that in respect of amounts disclosed as contingent liabilities are disclosed as contingent assets.


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The Board also provides for its liability from participating in the scheme. The participation in CNORIS provision recognises the Board’s respective share of the total liability of NHSScotland as advised by SGHSCD, and based on information prepared by NHS Boards and the Central Legal Office. The movement in the provisions between financial years is matched by a corresponding adjustment in AME provision and is classified as non-core expenditure.

18. Related Party Transactions

Material related party transactions are disclosed in Note 22 in line with the requirements of IAS 24. Transactions with other NHS bodies for the commissioning of health care are summarised in Note 3.

19. Value Added Tax

Most of the activities of the Board are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of non-current assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT.

20. PFI/HUB/NPD Schemes Transactions financed as revenue transactions through the Private Finance Initiative or alternative initiatives such as HUB or the Non Profit Distributing Model (NPD) are accounted for in accordance with HM Treasury application of IFRIC 12, Service Concession Arrangements, outlined in the FReM. Schemes which do not fall within the application of IFRIC 12 are deemed to be off- balance sheet. Where the Board has contributed assets, a prepayment for their fair value is recognised and amortised over the life of the PFI contract by charge to the Statement of Comprehensive Net Expenditure. Where, at the end of the PFI contract, a property reverts to the Board, the difference between the expected fair value of the residual on reversion and any agreed payment on reversion is built up on the balance sheet over the life of the contract by capitalising part of the unitary charge each year. Transactions which meet the IFRIC 12 definition of a service concession, as interpreted in HM Treasury’s FReM, are accounted for as ‘on-balance sheet’ by the Board. The underlying assets are recognised as Property, Plant and Equipment and Intangible Assets at their fair value. An equivalent liability is recognised in accordance with IAS 17. Where it is not possible to separate the finance element from the service element of unitary payment streams this has been estimated from information provided by the operator and the fair values of the underlying assets. Assets are subsequently revalued in accordance with the treatment specified for their applicable asset categories. The annual contract payments are apportioned between the repayment of the liability, a finance cost and the charges for services. The finance cost is calculated using the implicit interest rate for the scheme. The service charge and the finance cost interest element are charged in the Statement of Comprehensive Net Expenditure.

21. Provisions

The Board provides for legal or constructive obligations that are of uncertain timing or amount at the statement of Financial Position date on the basis of the best estimate of the expenditure required to settle the obligation. Where the effect of the time value of money is significant, the estimated cash flows are discounted using the discounted rate prescribed by HM Treasury.


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22. Contingencies

Contingent assets (that is, assets arising from past events whose existence will only be confirmed by one or more future events not wholly within the Board’s control) are not recognised as assets, but are disclosed in Note 14 where an inflow of economic benefits is probable. Contingent liabilities are not recognised, but are disclosed in Note 14, unless the probability of a transfer of economic benefits is remote. Contingent liabilities are defined as:

possible obligations arising from past events whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the entity’s control; or

present obligations arising from past events but for which it is not probable that a transfer of economic benefits will arise or for which the amount of the obligation cannot be measured with sufficient reliability.

23. Corresponding Amounts

Corresponding amounts are shown for the primary statements and notes to the financial statements. Where the corresponding amounts are not directly comparable with the amount to be shown in respect of the current financial year, IAS 1‘Presentation of Financial Statements’, requires that they should be adjusted and the basis for adjustment disclosed in a note to the financial statements.

24. Financial Instruments

Financial Assets Business Model The Board’s business model refers to how it manages its financial assets in order to generate cash flows and is determined at a level which reflects how groups of financial assets are managed to achieve a business objective, rather than assessment of individual instruments. Classification When the Board first recognises a financial asset, it classifies it based on its business model for managing the asset and the asset’s contractual flow characteristics. The Board classifies its financial assets in the following categories: at fair value through profit or loss, amortised cost, and fair value through other comprehensive income. (a) Financial assets at fair value through profit or loss

This is the default basis for financial assets. (b) Financial assets held at amortised cost

A financial asset may be held at amortised cost where both of the following conditions are met:

i. the financial asset is held within a business model where the objective is to collect contractual cash flows; and

ii. the contractual terms of the financial asset give rise to cash flows that are solely payments of principal and related interest.

(c) Financial assets at fair value through other comprehensive income

A financial asset may be held at fair value through other comprehensive income where both of

the following conditions are met:


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i. the financial asset is held within a business model where the objective is to collect contractual cash flows and sell the asset; and

ii. the contractual terms of the financial asset give rise to cash flows that are solely payments of principal and related interest.

Impairment of financial assets Provisions for impairment of financial assets are made on the basis of expected credit losses. The Board recognises a loss allowance for expected credit losses on financial assets and this is recognised in other comprehensive income, rather than reducing the carrying amount of the asset in the Statement of Financial Position. Lifetime expected credit losses are recognised and applied to financial assets by the Board where there has been a significant increase in credit risk since the asset’s initial recognition. Where the Board does not hold reasonable and supportable information to measure lifetime expected credit losses on an individual instrument basis, the losses are recognised on a collective basis which considers comprehensive credit risk information. Recognition and measurement Financial assets are recognised when the board becomes party to the contractual provisions of the financial instrument. Financial assets are de-recognised when the rights to receive cash flows from the asset have expired or have been transferred and the Board has transferred substantially all risks and rewards of ownership. (a) Financial assets at fair value through profit or loss

Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the Statement of Comprehensive Net Expenditure. Financial assets carried at fair value through profit or loss are subsequently measured at fair value. Gains or losses arising from changes in the fair value are presented in the Statement of Comprehensive Net Expenditure.

(b) Financial assets held at amortised cost Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of the asset.

(c) Financial assets held at fair value through other comprehensive income

Financial assets carried at fair value through other comprehensive income are initially

recognised at fair value plus transaction costs that are directly attributable to the acquisition or

issue of the financial asset.

Financial assets carried at fair value through other comprehensive income are subsequently

measured at fair value. Gains or losses arising from changes in the fair value are recognised

in the Statement of Comprehensive Net Expenditure until the financial asset is derecognised

or reclassified.


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Financial Liabilities Classification The Board classifies its financial liabilities in the following categories: at fair value through profit or loss, and amortised cost. The Board classifies all financial liabilities as measured at amortised cost, unless:

i. these are measured at fair value on a portfolio basis in accordance with a documented

risk management or investment strategy; ii. they contain embedded derivatives; and/or iii. it eliminates or reduces ‘accounting mismatch’ that would otherwise arise from

measurement or recognition on an amortised costs basis. (a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss comprise derivatives. Liabilities in this category are classified as current liabilities. The NHS Board does not trade in derivatives and does not apply hedge accounting

(b) Financial liabilities held at amortised cost

Financial liabilities held at amortised cost are disclosed in current liabilities, except for maturities greater than 12 months after the Statement of Financial Position date. These are classified as non-current liabilities. The NHS Board’s financial liabilities held at amortised cost comprise trade and other payables in the Statement of Financial Position.

Recognition and measurement Financial liabilities are recognised when the NHS Board becomes party to the contractual provisions of the financial instrument. A financial liability is removed from the Statement of Financial Position when it is extinguished, that is when the obligation is discharged, cancelled or expired. (a) Financial liabilities at fair value through profit or loss

Financial liabilities carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Financial liabilities carried at fair value through profit or loss are subsequently measured at fair value. Gains or losses arising from changes in the fair value are presented in the Statement of Comprehensive Net Expenditure.

(b) Amortised costs

Financial liabilities held at amortised cost are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

25. Segmental Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments. This has been identified as the senior management of the Board. Operating segments are unlikely to directly relate to the analysis of expenditure shown in Note 3.


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26. Cash and Cash Equivalents Cash and cash equivalents includes cash in hand, deposits held at call with banks, cash balances

held with the Government Banking Service, balances held in commercial banks and other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within the borrowings in current liabilities on the Statement of Financial Position. Where the Government Banking Service is using National Westminster Bank to provide banking services, funds held in these accounts should not be classed as commercial bank balances.

27. Foreign Exchange The functional and presentational currencies of the Board are sterling. A transaction which is denominated in a foreign currency is translated into the functional currency at the spot exchange rate on the date of the transaction. Where the Board has assets or liabilities denominated in a foreign currency at the Statement of Financial Position date:

monetary items (other than financial instruments measured at ‘fair value through income and expenditure’) are translated at the spot exchange rate on 31 March;

non-monetary assets and liabilities measured at historical cost are translated using the spot exchange rate at the date of the transaction; and

non-monetary assets and liabilities measured at fair value are translated using the spot exchange rate at the date the fair value was determined.

Exchange gains or losses on monetary items (arising on settlement of the transaction or on re-translation at the Statement of Financial Position date) are recognised in income or expenditure in the period in which they arise.

Exchange gains or losses on non-monetary assets and liabilities are recognised in the same manner as other gains and losses on these items.

28. Third Party Assets Assets belonging to third parties (such as money held on behalf of patients) are not recognised in the accounts since the Board has no beneficial interest in them. However, they are disclosed in Note 23 to the accounts in accordance with the requirements of HM Treasury’s Financial Reporting Manual.

29. Key sources of Judgement and Estimation Uncertainty Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Board makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The Board makes judgements in applying accounting policies. The estimates, assumptions and judgements that have a significant risk of a causing material adjustment to the carrying amounts of assets and liabilities within the

financial statements within the next financial year are addressed below.


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Integration Joint Boards The Board has determined that using the equity basis of accounting is the most appropriate way to account for the three Integration Joint Boards (Angus, Dundee and Perth and Kinross) on the basis that NHS Tayside representatives constitute 50% of the voting membership of each of the respective Integration Joint Boards, and on that basis NHS Tayside jointly controls each of the entities with their respective Local Authorities. Clinical and Medical Negligence Costs The Board’s accounting policy relating to the provisions for clinical and medical negligence and other claims is described in section 17 above. Pension Provision The pension provision is calculated using information received from SPPA relating to former Board employees for whom the Board has an ongoing pension liability. The provision is calculated using information obtained from SPPA and applicable discount rates for future payments are provided by HM Treasury. Pay Accruals The holiday pay and flexible working hours accrual is based on a sample of employees’ annual leave carried forward at year end. The sample is extrapolated as a measure of the liability the Board has for annual leave and flexible working hours carry forward for its workforce. Assessment of Leases Leases are assessed under IFRS as being operating or finance leases, which determines their accounting treatment. The criteria for assessment are to a certain extent subjective, but a consistent approach has been taken through use of a standard template which sets out the relevant criteria. Valuation of Estate The land and buildings held by the Board are revalued annually by independent valuers. Judgements are made about the status of property which affects the valuation methodology. Large Hospital Set Aside Set aside amounts were calculated on the basis of activity and costs extracted from Information

Services Division datasets confirmed through NHS National Services Scotland. In line with national

guidance issued, bed day rates were adjusted to reflect a direct cost per occupied bed day.


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NOTE 2 NOTES TO THE CASH FLOW STATEMENT 2a Consolidated adjustments for non-cash transactions

Note 2019 £’000

2018 £’000

Expenditure not paid in cash Depreciation 7a 20,199 20,892 Amortisation 6 107 205 Depreciation of donated assets 7a 551 575 Impairments on PPE charged to SoCNE 4,152 2,220 Reversal of impairments on PPE charged to SoCNE (252) (106) Funding of donated assets 7a (111) (158) Loss/(profit) on disposal of property, plant and equipment 318 (67) Associates and joint ventures accounted for on an equity basis SoCNE (2,866) 741 Other non-cash costs – Previous Investment in East Central Territory hubco 0 (21) Other non-cash transactions – IFRS9 Impairment on receivables (28) 0 Total expenditure not paid in cash CFS 22,070 24,281 2b Interest payable recognised in operating expenditure

Note 2019 £’000

2018 £’000

Expenditure payable PFI Finance lease charges allocated in the year 18b 8,520 8,568 Other Finance lease charges allocated in the year 513 547 Provisions – Unwinding of discount (273) 126 Net interest payable CFS 8,760 9,241


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2c Consolidated movements in working capital

Note Opening Balances

2019 £’000

Closing Balances

2019 £’000

Net Movement

2019 £’000

2018 £’000

INVENTORIES Balance Sheet 8,130 8,389 172 Net decrease/(increase) 8 (259) 172 TRADE AND OTHER RECEIVEABLES Due within one year 9 75,811 65,239 (12,451) Due after more than one year 9 2,873 1,978 (2,073) 78,684 67,217 (14,524 Less: property, plant & equipment (capital) included in above

(779) (701)

Less: General Fund debtor included in above 9 (1,179) (136) 1,179 77,505 67,081 Net decrease/(increase) 10,346 (13,345) TRADE AND OTHER PAYABLES Due within one year 12 91,918 83,930 16,773 Due after more than one year 12 89,483 110,452 (1,866) Less: property, plant & equipment (capital) included in above

(21,767)

(948)

(16,257)

Less: bank overdraft 12 (1,572) (306) (1,551) Less: General Fund creditor included in above 12 0 0 86 Less: lease and PFI creditors included in above 12 (91,348) (112,808) 1,718 66,714 80,320 Net decrease/(increase) 13,606 (1,097) PROVISIONS Statement of Financial Position 13a 104,754 93,716 11,548 Net decrease/(increase) (11,038) 11,548 Net movement (decrease)/increase CFS 12,655 (2,722)


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NOTE 3 OPERATING EXPENSES

3a Employee Expenditure

Note 2019 Board £’000

2019 Consolidated

£’000

2018 Consolidated

£’000

Medical and dental 136,259 136,259 132,755 Nursing 219,973 219,973 215,401 Other staff 195,423 195,423 191,465 Total SOCNE 551,655 551,655 539,621 Further details and analysis of employee expenditure can be found in the Remuneration and Staff Report, forming part of the Accountability Report.

3b Other Operating Expenditure 2019

Board £’000

2019 Consolidated

£’000

2018 Consolidated

£’000

Independent Primary Care Services: General Medical Services 67,624 67,624 65,063 Pharmaceutical Services 16,801 16,801 15,367 General Dental Services 30,979 30,979 30,010 General Ophthalmic Services 8,283 8,283 8,261 Total 123,687 123,687 118,701 Drugs and medical supplies: Prescribed drugs Primary Care 81,934 81,934 86,566 Prescribed drugs Secondary Care 64,957 64,957 61,821 Medical Supplies 40,742 40,742 42,659 Total 187,633 187,633 191,046 Other health care expenditure: Contribution to Integration Joint Boards 461,993 461,993 444,381 Goods and services from other NHSScotland bodies 20,872 20,872 19,664 Goods and services from other UK NHS bodies 911 911 1,135 Goods and services from private providers 6,678 6,678 6,269 Goods and services from voluntary organisations 417 417 677 Resource transfer 56,941 56,941 53,921 Loss on disposal of assets 318 318 0 Other operating expenses 122,847 119,209 137,176 External Auditor’s remuneration – statutory audit fee 208 208 193 Endowment Fund expenditure 0 2,013 4,215 Total 671,185 669,560 667,631 ______ Total Other Operating Expenditure 982,505 980,880 977,378 During the year the Board purchased no non-audit services from its auditor, Audit Scotland (2018, £0). Other operating expenses includes depreciation £20.9 million (2018 £21.7 million), equipment £22.6 million (2018 £19.9 million), rent of premises of £19.5 million (2018 £19.3 million) and property maintenance of £13.9 million (2018 £10.8 million).


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In April 2018 the Board agreed to repay £3.6million to the Endowment Fund in respect of 32 projects that

were approved retrospectively in 2013/14 which were later deemed inappropriate. The transaction was

processed in 2018/19 and is included within Board “other operating expenses” above.

NOTE 4 OPERATING INCOME

Note 2019 Board £’000

2019 Consolidated

£’000

2018 Consolidated

£’000

Income from Scottish Government 1,325 1,325 1,210 Income from other NHS Scotland bodies 114,092 114,092 113,284 Income from NHS non-Scottish bodies 1,731 1,731 1,399 Income from private patients 22 22 34 Income for services commissioned by Integration Joint Board 454,214 454,214 444,381 Patient charges for primary care 6,942 6,942 6,642 Donations 111 111 158 Profit on disposal of assets 0 0 173 Contributions in respect of clinical and medical negligence claims

(4,536) (4,536) 10,021

Interest received CFS 62 62 41 Non NHS:

Overseas patients (non-reciprocal) 151 151 172 Non-patient care income generation schemes 1,224 1,224 3,565

Endowment Fund Income 0 2,758 1,818 Other 33,025 33,025 34,145 Total Income SoCNE 608,363 611,121 617,043

A change in HM Treasury issued discount rates in December 2018 resulted in a significant reduction to

the Board’s provision for clinical and medical negligence claims and the negative income figure included

above of £4.5 million as NHS Tayside returned funding to Scottish Government in line with funding

requirements.


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NOTE 5 SEGMENTAL INFORMATION Segmental information as required under IFRS has been reported for each strategic objective Patient

Assurance & Access

Medicine Women Children & Families

Surgery Regional Mental Health

Services

Facilities & Operational

Services

Large Hospitals

Angus Health &

Social Care Partnership

Dundee Health &


Perth & Kinross Health &


Board & Corporate Services

Endowment Fund

Joint Ventures

Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Net operating cost 2019 108,473 74,439 60,387 120,639 8,020 78,170 (41,529) 125,274 182,826 153,897 55,201 (4,383) (2,866) 918,548

Net operating cost 2018 (Restated) 105,937 73,842 59,675 123,642 7,054 74,772 (38,191) 115,579 171,736 158,516 44,997 2,397 741 900,697

The corresponding amounts have been restated to reflect structural reorganisation. The change is presentational and does not impact on the reported outturn for the previous year.


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NOTE 6 INTANGIBLE ASSETS

6a Intangible Assets (Non Current) – Consolidated and Board Note Software

Licenses IT – software Total

£’000 £’000 £’000 Cost or Valuation At 1 April 2018 1,692 680 2,372 Additions 0 0 0 Completions 0 0 0 Disposals 0 (271) (271) At 31 March 2019 1,692 409 2,101 Amortisation At 1 April 2018 1,550 227 1,777 Provided during the year 107 0 107 Disposals (95) 0 (95) At 31 March 2019 1,562 227 1,789 Net book value at 1 April 2018 142 453 595 Net book value at 31 March 2019 SoFP 130 182 312 6a Intangible Assets (Non Current) – Consolidated and Board Prior Year Note Software

Licenses IT – software Total

£’000 £’000 £’000 Cost or Valuation At 1 April 2017 1,451 693 2,144 Additions 13 0 13 Completions 234 0 234 Disposals (6) (13) (19) At 31 March 2018 1,692 680 2,372 Amortisation At 1 April 2017 1,351 240 1,591 Provided during the year 205 0 205 Disposals (6) (13) (19) At 31 March 2018 1,550 227 1,777 Net book value at 1 April 2017 100 453 553 Net book value at 31 March 2018 SoFP 142 453 595


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NOTE 7a PROPERTY, PLANT AND EQUIPMENT - CONSOLIDATED Note Land

(including under

buildings)

Buildings (excluding dwellings)

Dwellings Transport Equipment

Plant & Machinery

Information Technology

Furniture & Fittings

Assets Under

Construction

Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Cost or Valuation

At 1 April 2018 20,343 481,632 3,666 2,570 92,962 8,660 735 28,772 639,340

Additions – purchased 0 7,385 0 23 4,607 358 60 3,284 15,717

Additions – donated 0 0 0 0 111 0 0 0 111

Completions 0 21,731 0 0 857 28 0 (22,616) 0

Transfers (to)/from non-current assets held for sale 0 0 0 0 0 0 0 0 0

Revaluations 264 (2,893) (172) 0 0 0 0 0 (2,801)

Impairment charges 0 (2,291) 0 0 0 0 0 (1,861) (4,152)

Impairment reversals 25 221 6 0 0 0 0 0 252

Disposals – purchased 0 (4) 0 (203) (3,762) (23) (42) (8) (4,042)

Disposals – donated 0 0 0 0 (186) 0 0 0 (186)

At 31 March 2019 20,632 505,781 3,500 2,390 94,589 9,023 753 7,571 644,239

Depreciation

At 1 April 2018 0 29,119 5 2,123 68,730 7,189 403 0 107,569

Provided during the year – purchased 0 13,758 222 149 5,475 554 41 0 20,199

Provided during the year – donated 0 299 6 4 159 77 6 0 551


Revaluations 0 (11,134) (222) 0 0 0 0 0 (11,356)

Disposals – purchased 0 0 0 (194) (3,609) (23) (42) 0 (3,868)


At 31 March 2019 0 32,042 11 2,082 70,569 7,797 408 0 112,909

Net book value at 1 April 2018 20,343 452,513 3,661 447 24,232 1,471 332 28,772 531,771

Net book value at 31 March 2019 SoFP 20,632 473,739 3,489 308 24,020 1,226 345 7,571 531,330

Open Market Value of Land in Land and Dwellings included above

20,632

0


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Asset financing:

Owned – purchased 20,612 314,869 3,384 294 23,336 1,185 317 7,571 371,568

Owned – donated 20 12,459 105 14 684 41 28 0 13,351

Held on finance lease 0 7,375 0 0 0 0 0 0 7,375

On-balance sheet PFI contracts 0 139,036 0 0 0 0 0 0 139,036



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NOTE 7a PROPERTY, PLANT AND EQUIPMENT - BOARD Note Land

(including under

buildings)



Plant & Machinery



Assets Under

Construction

Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Cost or Valuation

At 1 April 2018 20,343 481,607 3,666 2,570 92,962 8,660 735 28,773 639,316



Completions 0 21,731 0 0 857 28 0 (22,616) 0


Revaluations 264 (2,893) (172) 0 0 0 0 0 (2,801)

Impairment charges 0 (2,291) 0 0 0 0 0 (1,861) (4,152)


Disposals – purchased 0 (4) 0 (203) (3,762) (23) (42) (8) (4,042)


At 31 March 2019 20,632 505,756 3,500 2,390 94,589 9,023 753 7,572 644,215

Depreciation

At 1 April 2018 0 29,119 5 2,123 68,730 7,189 403 0 107,569




Revaluations 0 (11,134) (222) 0 0 0 0 0 (11,356)



At 31 March 2019 0 32,042 11 2,082 70,569 7,797 408 0 112,909




20,632

0


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Asset financing:

Owned – purchased 20,612 314,869 3,384 294 23,336 1,185 317 7,572 371,569

Owned – donated 20 12,434 105 14 684 41 28 0 13,326





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NOTE 7a PROPERTY, PLANT AND EQUIPMENT – CONSOLIDATED PRIOR YEAR Note Land

(including under

buildings)



Plant & Machinery



Assets Under

Construction

Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Cost or Valuation

At 1 April 2017 20,243 476,303 3,655 2,850 93,120 8,657 664 13,511 619,003



Completions 0 721 0 0 1,939 64 0 (2,958) (234)


Revaluations 29 2,550 (99) 0 0 0 0 0 2,480

Impairment charges 0 (1,472) 0 0 (77) (15) 0 (656) (2,220)


Disposals – purchased 0 0 0 (280) (5,059) (102) (16) (96) (5,553)

Disposals – donated 0 (350) 0 0 (258) 0 (39) 0 (647)

At 31 March 2018 20,343 481,632 3,666 2,570 92,962 8,660 735 28,772 639,340

Depreciation

At 1 April 2017 0 25,324 0 2,215 67,563 6,364 418 0 101,884




Revaluations 0 (9,833) (216) 0 0 0 0 0 (10,049)


Disposals – donated 0 0 0 0 (258) 0 (39) 0 (297)

At 31 March 2018 0 29,119 5 2,123 68,730 7,189 403 0 107,569




20,343 0


92

Asset financing:

Owned – purchased 20,323 318,411 3,556 429 23,500 1,353 298 28,773 396,642

Owned – donated 20 12,428 105 18 732 118 34 0 13,455





93

NOTE 7a PROPERTY, PLANT AND EQUIPMENT – BOARD PRIOR YEAR

Note Land

(including under

buildings)



Plant & Machinery



Assets Under

Construction

Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Cost or Valuation

At 1 April 2017 20,243 475,928 3,655 2,850 93,120 8,657 664 13,512 618,629



Completions 0 721 0 0 1,939 64 0 (2,958) (234)


Revaluations 29 2,550 (99) 0 0 0 0 0 2,480

Impairment charges 0 (1,472) 0 0 (77) (15) 0 (656) (2,220)


Disposals – purchased 0 0 0 (280) (5,059) (102) (16) (96) (5,553)


At 31 March 2018 20,343 481,607 3,666 2,570 92,962 8,660 735 28,773 639,316

Depreciation

At 1 April 2017 0 25,324 0 2,215 67,563 6,364 418 0 101,884




Revaluations 0 (9,833) (216) 0 0 0 0 0 (10,049)



At 31 March 2018 0 29,119 5 2,123 68,730 7,189 403 0 107,569




20,343 0


94

Asset financing:

Owned – purchased 20,323 318,411 3,556 429 23,500 1,353 298 28,773 396,643

Owned – donated 20 12,403 105 18 732 118 34 0 13,430





95

NOTE 7b ASSETS HELD FOR SALE Properties are held for sale following the approval for sale by the Board, as they are surplus to requirements, and where the IFRS 5 conditions for classification as Assets Held for Sale are met. Completion dates held for the sales are expected to be in the next financial year. The properties classified as Assets held for Sale are Liff Surplus land and Coupar Angus Health Centre. ASSETS HELD FOR SALE – CONSOLIDATED AND BOARD

Property, Plant &

Equipment

Total Note £’000 £’000

At 1 April 2018 861 861 Transfers (to)/from property, plant and equipment 0 0 Disposals of non-current assets held for sale 0 0 At 31 March 2019 SoFP 861 861 ASSETS HELD FOR SALE – (PRIOR YEAR) CONSOLIDATED AND BOARD

At 1 April 2017 1,828 1,828 Transfers (to)/from property, plant and equipment (236) (236) Disposals of non-current assets held for sale (731) (731) At 31 March 2018 SoFP 861 861


96

NOTE 7c PROPERTY, PLANT AND EQUIPMENT DISCLOSURES

Note


Board 2019 £’000


Board 2018 £’000

Net book value of property, plant and equipment at 31 March

Purchased 517,979 517,980 518,316 518,317 Donated 13,351 13,326 13,455 13,430 Total SoFP 531,330 531,306 531,771 531,747 Net book value related to land valued at open market value at 31 March

21,395 21,395 21,106 21,106

Net book value related to buildings valued at open market value at 31 March

97 97 97 97

Total value of assets held under: Finance Leases 7,375 7,375 7,670 7,670 PFI and PPP Contracts 139,036 139,036 114,004 114,004 Total 146,411 146,411 121,674 121,674 Total depreciation charged in respect of assets held under:

Finance Leases 273 273 270 270 PFI and PPP Contracts 3,599 3,599 3,401 3,401 Total 3,872 3,872 3,671 3,671 Land and buildings were revalued by an independent valuer GVA Grimley Ltd trading as Avison Young, as at 31 March 2019 on the basis of fair value (market value or depreciated replacement cost where appropriate). The values were computed in accordance with the Royal Institute of Chartered Surveyors Statement of Asset Valuation Practice and Guidance notes, subject to the special accounting practices of the NHS. The net impact was an increase of £8.6 million (2017/18: an increase of £12.5 million) which was credited to the revaluation reserve. Impairment of £4.1 million (2017/18: £2.1 million) was charged to the Statement of Comprehensive Net Expenditure and Summary of Resource Outturn.


97

NOTE 7d ANALYSIS OF CAPITAL EXPENDITURE

Note


Board 2019 £’000


Board 2018 £’000

Expenditure

Acquisition of intangible assets 6 0 0 247 247 Acquisition of property, plant and equipment 7a 15,717 15,717 25,775 25,775 Donated asset additions 7a 111 111 158 158 HUB 0 0 0 0 Gross Capital Expenditure 15,828 15,828 26,180 26,180 Income Net book value of disposal of intangible assets 6 176 176 0 0 Net book value of disposal of property, plant and equipment

7a

174

174

115

115

Net book value of disposal of donated assets 7a 0 0 350 0 Value of disposal of non-current assets held for sale 7b 0 0 731 731 HUB-repayment of investment 0 0 0 0 Donated asset income 111 111 158 158 Capital Income 461 461 1,354 1,004 Net Capital Expenditure 15,367 15,367 24,826 25,176 SUMMARY OF CAPITAL RESOURCE OUTTURN Core capital expenditure included above 13,061 13,061 8,482 8,482 Core Capital Resource Limit 13,089 13,089 8,482 8,482 Saving/(excess) against Core Capital Resource Limit

28 28 0 0

Non core capital expenditure included above 2,306 2,306 16,694 16,694 Non core Capital Resource Limit 2,306 2,306 16,694 16,694 Saving/(excess) against Non Core Capital Resource Limit

0 0 0 0

Total capital expenditure 15,367 15,367 25,176 25,176 Total Capital Resource Limit 15,395 15,395 25,176 25,176 Saving/(excess) against Total Capital Resource Limit

28 28 0 0


98

NOTE 8 INVENTORIES

Note


Board 2019 £’000


Board 2018 £’000

Raw materials and consumables 7,487 7,461 7,419 7,392 Work in progress 202 202 186 186 Finished goods 700 700 525 525 Total inventories SoFP 8,389 8,363 8,130 8,103 NOTE 9 TRADE AND OTHER RECEIVABLES

Note


Board 2019 £’000


Board 2018 £’000

Receivables due within one year

NHS Scotland Scottish Government Health & Social Care Directorate 71 71 92 92 Boards SFR 30.0 10,723 10,723 10,399 10,399 Total NHS Scotland Receivables 10,794 10,794 10,491 10,491 NHS non-Scottish bodies 1,438 1,438 867 867 General Fund receivable 136 136 1,179 1,179 VAT recoverable SFR 30.1 798 798 1,074 1,074 Prepayments 3,944 3,944 3,638 3,638 Accrued income 4,895 4,895 5,534 5,534 Other receivables 1,608 1,481 1,455 1,120 Reimbursement of provisions 39,901 39,901 49,990 49,990 Other public sector bodies 1,725 1,725 1,583 1,583 Total Receivables due within one year SoFP 65,239 65,112 75,811 75,476 Receivables due after more than one year Accrued income 1,978 1,978 2,873 2,873 Total Receivables due after more than one year SoFP 1,978 1,978 2,873 2,873 TOTAL RECEIVABLES 67,217 67,090 78,684 78,349 The total receivable figure above includes a provision for impairments of:

1,460

1,460

1,257

1,257

WGA Classification NHS Scotland SFR 30.0 10,723 10,723 10,399 10,399 Central Government bodies SFR 30.1 1,134 1,134 1,429 1,429 Whole of Government bodies SFR 30.2 1,460 1,460 1,207 1,207 Balances with NHS bodies in England and Wales SFR 30.2 1,438 1,438 867 867 Balances with bodies external to Government 52,462 52,335 64,782 64,447 Total 67,217 67,090 78,684 78,349


99

NOTE 9 TRADE AND OTHER RECEIVABLES (Continued) Movements on the provision for impairment of receivables are as follows:

At 1 April 1,257 1,257 411 411 Provision for impairment 203 203 847 847 Receivables written off during the year as uncollectable 0 0 (1) (1) At 31 March 1,460 1,460 1,257 1,257

As of 31 March 2019, receivables with a carrying value of £1.46 million (2018: £1.26 million) were impaired and provided for. The ageing of these receivables is as follows:


Board 2019 £’000


Board 2018 £’000

Up to 6 months past due 721 721 738 738 Over 6 months past due 739 739 519 519 1,460 1,460 1,257 1,257 The impaired value of £1.46 million (2018: £1.016 million) includes £0.7 million (2018: £0.7 million) in relation to the NHS Injury Cost Recovery Scheme. This has been included in the up to 6 months past due total, and the prior year has been reclassified to provide consistency between years. This has no impact on the financial outturn. The receivables assessed as individually impaired were mainly English, Welsh and Irish NHS Trusts/Health Authorities, other Health Bodies, overseas patients, universities, research companies and private individuals and it was assessed that not all of the receivable balance may be recovered. In previous years receivables less than three months past their due date were not considered impaired. From 1 April 2019, with the implementation of IFRS 9, receivables are reviewed from the point in time they are raised based on historical loss rates. As at 31 March 2019, receivables with a carrying value of £3.631 million (2018: £2.817 million) were past their due date but not impaired. The ageing of receivables which are past due but not impaired is as follows:


Board 2019 £’000


Board 2018 £’000

Up to 3 months past due 2,299 2,299 1,575 1,575 3 to 6 months past due 780 780 937 937 Over 6 months past due 552 552 305 305 3,631 3,631 2,817 2,817 The receivables assessed as past due but not impaired were mainly NHS Scotland Health Boards and Local Authorities and there is no history of default from these customers recently. The above figures do not include the element of the Injury Cost Recovery Scheme debtor not impaired.

Concentration of credit risk is limited due to customer base being large and unrelated/government bodies. Due to this, management believe that there is no future credit risk provision required in excess of the normal provision for doubtful receivables. The credit quality of receivables that are neither past due nor impaired is assessed by reference to external credit ratings where available. Where no external credit rating is available, historical information about counterparty default rates is used.


100

Receivables that are neither past due nor impaired are shown by their credit risk below. Consolidated

2019 £’000

Board 2019 £’000


Board 2018 £’000

Existing customers with no defaults in the past 6,413 6,413 5,877 5,877 Total neither past due or impaired 6,413 6,413 5,877 5,877 Currency - Pounds 67,217 67,090 78,684 78,349 All non-current receivables are due within 9 years (2018: 10 years) from the balance sheet date. For debtors included above in the Injury Cost Recovery Scheme there is more uncertainty over the likely timeframe for recoverability. Payment dates are dependent on settlement of compensation claims, the timelines for which are uncertain. The carrying amount of short term receivables approximates their fair value. The fair value of long term other receivables is £2,765,886 (2018: £2,873,415). The effective interest rate on non-current other receivables is 2.90% (2018: 2.55%). NOTE 10 INVESTMENTS

Note


Board 2019 £’000


Board 2018 £’000

Government securities 3,044 0 1,010 0 Other 21,444 277 22,803 277 TOTAL SoFP 24,488 277 23,813 277 At 1 April 23,813 277 24,461 277 Additions CFS 4,983 0 2,035 0 Disposals (5,064) 0 (2,365) 0 Revaluation surplus/(deficit) transferred to equity 756 0 (318) 0 At 31 March 24,488 277 23,813 277 Non-current SoFP 24,488 277 23,813 277 At 31 March 24,488 277 23,813 277 The carrying value includes an impairment provision of

0

0

0

0

In respect of the Board investments comprise TMRI Limited of £1,000 and in Hub East Central Scotland Ltd of £3 which are both investments denominated in UK pounds. This also includes the subordinated debt of £276,210 for the NHS Scotland Pharmaceuticals Specials Service (NHSSPSS) project. The NHSSPSS project is being procured via a hub Design, Build, Finance and Maintain (DBFM) contract. Each NHS Board with a direct interest in the project being financed is required to commit to invest subordinated debt. Financial close for the NHSSPSS project was achieved on 22 December 2016, at which point the subordinated debt investment was made. The consolidated figures reflect the Board figures plus investments held, purchased, disposed of or revalued relating to Tayside Health Fund. The carrying value of the investments is cost, as there is no active market for the equity investments. No impairment provision is considered necessary.


101

NOTE 11 CASH AND CASH EQUIVALENTS

Note 2019 £’000

2018 £’000

Balance at 1 April (1,014) 201 Net change in cash and cash equivalent balances 6,048 357 Balance at 31 March SoFP 5,034 558 Overdrafts (306) (1,572) Total Cash – Cash Flow Statement CFS 4,728 (1,014) The following balances at 31 March were held at:

Commercial banks and cash in hand 170 393 Overdrafts (306) (1,572) Endowment cash 4,864 165 Balance at 31 March CFS 4,728 (1,014)


102

NOTE 12 TRADE AND OTHER PAYABLES

Note


Board 2019 £’000


Board 2018 £’000

Payables due within one year NHS Scotland Scottish Government Health & Social Care Directorate

2

2

Boards SFR 30.0 3,256 3,256 4,147 4,147 Total NHS Scotland Payables 3,258 3,258 4,147 4,147 NHS Non-Scottish bodies SFR 30.2 631 631 281 281 FHS practitioners 11,279 11,279 13,320 13,320 Trade payables 3,662 1,575 2,170 109 Accruals 27,666 27,666 39,057 39,057 Payments received on account 2,184 2,184 1,608 1,608 Net obligations under finance leases 336 336 317 317 Net obligations under PPP/PFI Contracts 18b 2,020 2,020 1,548 1,548 Bank overdrafts 11 306 306 1,572 1,572 Income tax and social security SFR 30.1 10,114 10,114 10,730 10,730 Superannuation 7,469 7,469 7,745 7,745 Holiday pay accrual 1,656 1,656 932 932 Other public sector bodies 12,428 12,428 7,572 7,572 Other payables 921 921 919 919 Total Payables due within one year SoFP 83,930 81,843 91,918 89,857 Payables due after more than one year Other public sector bodies Net obligations under finance leases due within 2 years

17 353 353 335 335

Net obligations under finance leases due after 2 years but within 5 years

17 1,094 1,094 1,077 1,077

Net obligations under finance leases due after 5 years

17 3,868 3,868 4,238 4,238

Net obligations under PPP/PFI contracts due within 2 years

18b 2,204 2,204 1,693 1,693

Net obligations under PPP/PFI contracts due after 2 years but within 5 years

18b 7,899 7,899 6,091 6,091

Net obligations under PPP/PFI contracts due after 5 years

18b 95,034 95,034 76,049 76,049

Total Payables due after more than one year SoFP 110,452 110,452 89,483 89,483 TOTAL PAYABLES 194,382 192,295 181,401 179,340 WGA Classification NHS Scotland SFR 30.0 3,256 3,256 4,147 4,147 Central Government bodies SFR 30.1 10,654 10,654 11,120 11,120 Whole of Government bodies SFR 30.2 11,799 11,799 7,016 7,016 Balances with NHS bodies in England and Wales SFR 30.2 631 631 281 281 Balances with bodies external to Government 168,042 165,955 158,837 156,776 Total 194,382 192,295 181,401 179,340


103

NOTE 12 TRADE AND OTHER PAYABLES (Continued)

Borrowings included above comprise: Bank overdrafts 306 306 1,572 1,572 Finance leases 5,651 5,651 5,967 5,967 PFI contracts 107,157 107,157 85,381 85,381 Total 113,114 113,114 92,920 92,920 The carrying amount and fair value of the non-current borrowings are as follows:

Carrying amount Finance leases 5,315 5,315 5,650 5,650 PFI contracts 105,137 105,137 83,833 83,833 Total 110,452 110,452 89,483 89,483 The carrying amount of payables are denominated win the following currencies:

Pounds 194,382 192,295 181,401 179,340


104

NOTE 13a PROVISIONS CONSOLIDATED AND BOARD

Pensions and similar obligations

Clinical & Medical

Legal Claims against NHS

Board

Participation in CNORIS

Other (Non-endowment)

2019 Total

£’000 £’000 £’000 £’000 £’000 At 1 April 2018 8,243 51,035 45,051 425 104,754 Arising during the year 734 4,280 9,646 336 14,996 Utilised during the year (551) (4,942) (2,758) (152) (8,403) Unwinding of discount (144) 0 (129) 0 (273) Reversed unutilised 0 (9,431) (7,748) (179) (17,358) At 31 March 2019 8,282 40,942 44,062 430 93,716 The amounts shown above in relation to Clinical and Medical Legal Claims against NHS Tayside are stated gross and the amount of any expected reimbursements are separately disclosed as receivables in Note 9. Analysis of expected timing of discounted flows to 31 March 2019

Note


Clinical & Medical


Board



2019 Total

£’000 £’000 £’000 £’000 £’000 Payable in one year SoFP 556 6,227 9,228 430 16,441 Payable between 2–5 years SoFP 2,224 7,475 31,923 0 41,622 Payable between 6-10 years SoFP 2,780 3,816 2,661 0 9,257 Thereafter SoFP 2,722 23,424 250 0 26,396 At 31 March 2019 8,282 40,942 44,062 430 93,716

PROVISIONS CONSOLIDATED AND BOARD (PRIOR YEAR)

Note


Clinical & Medical


Board



2018 Total

£’000 £’000 £’000 £’000 £’000 At 1 April 2017 8,344 44,016 39,847 999 93,206 Arising during the year 299 12,050 12,010 280 24,639 Utilised during the year (526) (2,721) (2,185) (584) (6,016) Unwinding of discount 126 0 (224) 0 (98) Reversed unutilised 0 (2,310) (4,397) (270) (6,977) At 31 March 2018 8,243 51,035 45,051 425 104,754 The amounts shown above in relation to Clinical & Medical Legal Claims against NHS Tayside are stated gross and the amount of any expected reimbursements are separately disclosed as receivables in Note 9.


105

Analysis of expected timing of discounted flows to 31 March 2018

Note


Clinical & Medical


Board



2018 Total

£’000 £’000 £’000 £’000 £’000 Payable in one year SoFP 526 624 8,858 0 10,008 Payable between 2–5 years SoFP 2,106 2,720 34,840 0 39,666 Payable between 6-10 years SoFP 2,632 3,785 1,248 0 7,665 Thereafter SoFP 2,979 43,906 105 425 47,415 At 31 March 2018 8,243 51,035 45,051 425 104,754

Pensions and Similar Obligations

The Board meets the additional costs of benefits beyond the normal National Health Superannuation

Scheme for Scotland benefits in respect of employees who retire early by paying the required amounts

annually to National Health Service Superannuation Scheme for Scotland over the period between early

departure and normal retirement date. The Board provides for this in full when the early retirement

programme becomes binding by establishing a provision for the estimated payments discounted by the

Treasury discount rate of 0.29% (2018 0.10%) in real terms. Expenditure is likely to be incurred over a

period of up to 30 years (2018: 31 years).

NOTE 13b CLINICAL NEGLIGENCE AND OTHER RISKS INDEMNITY SCHEME (CNORIS)

Note 2019 £’000

2018 £’000

Provision recognising individual claims against NHS Board as at 31 March 13a 41,372 51,460 Associated CNORIS receivable at 31 March 9 (39,901) (49,990) Provision recognising the NHS Board’s liability from participating in the scheme at 31 March

13a

44,062

45,051

Net Total Provision relating to CNORIS at 31 March 45,533 46,521 The Clinical Negligence and Other Risks Scheme (CNORIS) has been in operation since 2000. Participation in the scheme is mandatory for all NHS boards in Scotland. The Scheme allows for risk pooling of legal claims in relation to clinical negligence and other risks and works in a similar manner to an insurance scheme. CNORIS has an agreed threshold of £25k and any claims with a value less than this are met directly from within boards’ own budgets. Participants e.g. NHS boards contribute to the CNORIS pool each financial year at a pre-agreed contribution rate based on the risks associated with their individual NHS board. If a claim is settled the board will be reimbursed by the scheme for the value of the settlement, less a £25k “excess” fee. The scheme allows for the risk associated with any large or late in the financial year legal claims to be managed and reduces the level of volatility that individual boards are exposed to. When a legal claim is made against an individual board, the board will assess whether a provision or contingent liability for that legal claim is required. If a provision is required then the board will also create an associated receivable recognising reimbursement from the scheme if the legal claim settles. The provision and associated receivable are shown in the first two lines above. The receivable has been netted off against the provision to reflect reimbursement from the scheme. As a result of participation in the scheme, boards should also recognise that they will be required to make contributions to the scheme in future years. Therefore a second provision that recognises the board’s share of the total CNORIS liability of NHSScotland has been made and this is reflected in third line above.


106

Therefore there are two related but distinct provisions required as a result of participation in the scheme. Both of these provisions as well as the associated receivable have been shown in the note above to aid the reader’s understanding of CNORIS.

Further information on the scheme can be found at: http://www.clo.scot.nhs.uk/our-servics/cnoris.aspx

NOTE 14 CONTINGENT LIABILITIES AND ASSETS

The following contingent liabilities have not been provided for in the Accounts: Contingent Liabilities* 2019

£’000 2018 £’000

Clinical and medical compensation payments 6,835 12,028 Third party liability 267 261 TOTAL CONTINGENT LIABILITIES 7,102 12,289

Contingent Assets** 2019 £’000

2018 £’000

Clinical and medical compensation payments 6,165 11,555 Employers’ liability 30 45 TOTAL CONTINGENT ASSETS 6,195 11,600

*The contingent liability represents a number of claims for clinical negligence and employer’s liability

against NHS Tayside, which have not been fully provided for in Note 13, and for which the Central Legal

Office of the Scottish Government Health Directorates estimates that there is a medium or low risk of

NHS Tayside having to make settlement.

**The contingent asset reflects the corresponding entitlement to recover the costs of any claim

settlement through the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS) which is

explained in more detail in Note 13 above.

NOTE 15 EVENTS AFTER THE END OF THE REPORTING YEAR

There have been no events after the reporting period that require to be disclosed.

NOTE 16 COMMITMENTS Capital Commitments

Property, Plant &

Equipment £’000

Intangible Assets

Total 2019 £’000

Total 2018 £’000

The Board has the following capital commitments which have not been included for in the financial statements:

Contracted Other 0 17 17 139 Hub projects – enabling works & equipping services 440 0 440 65 Estate Investment Statutory Compliance & Backlog Maintenance 853 0 853 444 Non Medical Equipment – Hamo Instrument Washer 96 0 96 457 Radiotherapy CT Scanner 0 0 0 827 IVT Room Ninewells 0 0 0 126 Medical Equipment 463 0 463 0 Radiotherapy Archive System 85 0 85 0 Ninewells Infrastructure Zone 1 Advanced Enabling works 464 0 464 0 Total 2,401 17 2,418 2,058


107

Authorised but not Contracted

Property, Plant &

Equipment £’000

Total 2019 £’000

Total 2018 £’000

Scottish Trauma Network 0 0 486 NHSS PSS Equipment 188 188 1,605 Medical Equipment – Autoclave 116 116 0 CDU Washer Replacement 870 870 0 LMS Server Replacement 126 126 0 NME – Laundry Garment Folder 117 117 0 Radiotherapy Treatment Planning System 613 613 0 Radiotherapy Linac 2,927 2,927 0 Ninewells Electrical Infrastructure Zone 1 11,036 11,036 0 Other 86 86 0 Total 16,079 16,079 2,091 NOTE 17 COMMITMENTS UNDER LEASES Obligations under operating leases comprise: Operating Leases Total future minimum lease payments under operating leases are given in the table below for each of the following periods: Obligations under operating leases comprise:

2019 £’000

2018 £’000

Land Not later than one year 202 168 Later than one year, not later than two years 202 168 Later than two years, not later than five years 566 503 Later than five years 1,434 1,408 Buildings Not later than one year 3,342 3,223 Later than one year, not later than two years 2,744 2,643 Later than two years, not later than five years 8,197 7,898 Later than five years 48,067 48,875 Other Not later than one year 463 490 Later than one year, not later than two years 318 321 Later than two years, not later than five years 289 245 Later than five years 0 0 Amounts charged to Operating Costs in the year were: Hire of equipment (including vehicles) 611 617 Other operating leases 3,524 3,387 Total 4,135 4,004 Other operating leases include agreements for leased cars and commercial vehicles.


108

Finance Leases Total future minimum lease payments under finance leases are given in the table below for each of the following periods: Obligations under finance leases comprise:

Note 2019 £’000

2018 £’000

Buildings Rentals due within one year 897 845 Rentals due between one and two years (inclusive) 920 866 Rentals due between two and five years(inclusive) 2,747 2,661 Rentals due after five years 8,576 9,068 13,140 13,440 Less interest element (7,489) (7,473) 12 5,651 5,967 This total net obligation under finance leases is analysed in Note 12 (Payables). NOTE 18 COMMITMENTS UNDER PFI Contracts – On Balance Sheet The Board has entered into the following on-balance sheet PFI projects. The Carseview Centre is located on the Ninewells Hospital site in Dundee and provides in-patient facilities for Adult Psychiatry and Learning Disability. The contract start date was 11 June 2001 and the end date will be 11 June 2026, when NHS Tayside may negotiate a further contract or purchase the facility. Whitehills Community Resource Centre covers Forfar, Kirriemuir and the surrounding area in conjunction with the Council and Lippen Care. The contract start date was 21 March 2005 and the end date will be 21 March 2030, when NHS Tayside will become owners of the facility. The Susan Carnegie Centre (Mental Health NPDO Phase 1) is located on the Stracathro Hospital site by Brechin, and provides in-patient facilities and a day hospital for Psychiatry of Old Age. The contract start date was 2 December 2011, and the end date will be 17 May 2042, when NHS Tayside will become owners of the facility. The Mental Health NPDO Phase 2 is located on the Murray Royal Hospital site in Perth, and provides in-patient, out-patient and day patient facilities for NHS Tayside’s General Adult Psychiatry, Psychiatry of Old Age and Low Secure Forensic services as well as a regional in-patient unit providing Medium Secure Forensic services for patients from the North of Scotland Health Boards. The contract start date was 1 June 2012, and the end date will be 17 May 2042, when NHS Tayside will become owners of the facility. The NHSScotland Pharmaceuticals 'Specials' Service (NHSSPSS) facility is located on the Ninewells Hospital site, Dundee, and is an NHS manufacturing facility for the supply of unlicensed medicines. The contract start date was 15 March 2019, and the end date will be 14 December, 2043, when NHS Tayside will become owners of the facility. Under IFRIC 12 the asset is treated as an asset of the Board and included in the Board’s accounts as a non current asset. The liability to pay for the property is in substance a finance lease obligation. Contractual payments therefore comprise two elements; imputed finance lease charges and service charges. The imputed finance lease obligation is as follows:


109

Carseview Whitehills Mental

Health NPDO

Phase 1

Mental Health NPDO

Phase 2

NHSSPSS 2019 Total

2018 Total

Gross Minimum Lease Payments

£’000 £’000 £’000 £’000 £’000 £’000 £’000

Rentals due within 1 year

1,399 1,911 1,692 7,089 2,158 14,249 11,891

Due within 1 to 2 years

1,434 1,959 1,716 7,189 2,164 14,462 12,189


4,522 6,177 5,298 22,196 6,532 44,725 38,425

Due after 5 years

4,870 13,814 37,489 167,248 45,459 268,880 269,620

Total 12,225 23,861 46,195 203,722 56,313 342,316 332,125 Carseview Whitehills Mental

Health NPDO

Phase 1

Mental Health NPDO

Phase 2

NHSSPSS 2019 Total

2018 Total

Less Interest Element

£’000 £’000 £’000 £’000 £’000 £’000 £’000


(907) (1,540) (1,515) (6,437) (1,830) (12,229) (10,343)


(908) (1,546) (1,521) (6,472) (1,811) (12,258) (10,496)


(2,712) (4,640) (4,593) (19,584) (5,297) (36,826) (32,334)

Due after 5 years

(2,656) (8,793) (24,924) (113,422) (24,051) (173,846) (193,571)

Total (7,183) (16,519) (32,553) (145,915) (32,989) (235,159) (246,744)

Carseview Whitehills Mental Health NPDO Phase

1

Mental Health NPDO

Phase 2

NHSSPSS 2019 Total

2018 Total

Present Value of minimum lease payments

£’000 £’000 £’000 £’000 £’000 £’000 £’000


12 492 371 177 652 328 2,020 1,548


12 526 413 195 717 353 2,204 1,693


12 1,810 1,537 705 2,612 1,235 7,899 6,091

Due after 5 years 12 2,214 5,021 12,565 53,826 21,408 95,034 76,049 Total 12 5,042 7,342 13,642 57,807 23,324 107,157 85,381


110

Carseview Whitehills Mental

Health NPDO Phase

1

Mental Health NPDO

Phase 2

NHSSPSS 2019 Total

2018 Total

Service elements due in future periods

£’000 £’000 £’000 £’000 £’000 £’000 £’000


1,528 0 352 1,476 180 3,536 3,295


1,409 0 357 1,497 184 3,447 3,224


4,442 0 1,104 4,623 580 10,749 10,163

Due after 5 years 4,783 0 7,807 34,834 5,189 52,613 57,809 Total 12,162 0 9,620 42,430 6,133 70,345 74,491 Total Commitments

17,204 7,342 23,262 100,237 29,457 177,502 159,872

Note

2019 Total

2018 Total

£’000 £’000 Interest charges 2b 8,520 8,568 Service charges 3,302 3,206 Principal repayment 1,563 1,416 Other charges 1,906 1,622 Total 15,291 14,812 2019 2018 £’000 £’000 Contingent rents (included in Other Charges)

1,906

1,622

NOTE 19 PENSION COSTS The Board participates in the NHS Pension Scheme (Scotland). The scheme is an unfunded statutory public service pension scheme with benefits underwritten by the UK Government. The scheme is financed by payments from employers and from those current employees who are members of the scheme and paying contributions at progressively higher marginal rates based on pensionable pay, as specified in the regulations. The rate of employer contributions is set with reference to a funding valuation undertaken by the scheme actuary. The last four-yearly valuation was undertaken as at 31 March 2012. The next valuation will be as at 31 March 2016 and this will set contribution rates from 1 April 2019. The Board has no liability for other employers obligations to the multi-employer scheme. As the scheme is unfunded there can be no deficit or surplus to distribute on the wind-up of the scheme or withdrawal from the scheme.


111

The scheme is an unfunded multi-employer defined benefit scheme. It is accepted that the scheme can be treated for accounting purposes as a defined contribution scheme in circumstances where the Board is unable to identify its share of the underlying assets and liabilities of the scheme. The employer contribution rate for the period from 1 April 2015 was 14.9% of pensionable pay. While the employee rate applied is variable it will provide an actuarial yield of 9.8% of pensionable pay. At the last valuation a shortfall of £1.4 billion was identified in the notional fund which will be repaid by a supplementary rate of 2.6% of employers pension contributions for fifteen years from 1 April 2015. This contribution is included in the 14.9% employers contribution rate The total employer contributions received for the NHS Scotland scheme in the year to 31 March 2018 were £768.7 million. Contributions collected in the year to 31 March 2019 will be published in October 2019. The Board level of participation in the scheme is 7.4% based on the proportion of employer contributions paid in 2017-18. The new NHS Pension Scheme (Scotland) 2015 From 1 April 2015 the NHS Pension Scheme (Scotland) 2015 was introduced. This scheme is a Career Average Re-valued Earnings (CARE) scheme. Members will accrue 1/54 of their pay as pension for each year they are a member of the scheme. The accrued pension is re-valued each year at an above inflation rate to maintain its buying power. This is currently 1.5% above increases to the Consumer Prices Index (CPI). This continues until the member leaves the scheme or retires. In 2018-19 members paid tiered contribution rates ranging from 5.2% to 14.7% of pensionable earnings. The normal pension age (NPA) is the same as the state Pension age. Members can take their benefits earlier but there will be a deduction for early payment. The existing NHS Superannuation Scheme (Scotland) This scheme closed to new joiners on 31 March 2015 but any benefits earned in either NHS 1995 or NHS 2008 sections are protected and will be paid at the section’s normal pension age using final pensionable pay when members leave or retire. Some members who were close to retirement when the NHS 2015 scheme launched will continue to earn benefits in their current section. This may affect members who were paying into the scheme on 1 April 2012 and were within 10 years of their normal retirement age. Some members who were close to retirement but did not qualify for full protection will remain in their current section beyond 1 April 2015 and join the 2015 scheme at a later date. All other members automatically joined the NHS 2015 scheme on 1 April 2015. Further information is available on the Scottish Public Pensions Agency (SPPA) web site at www.sppa.gov.uk. National Employment Savings Trust (NEST) The Pensions Act 2008 and 2011 Automatic enrolment regulations required all employers to enrol workers meeting certain criteria into a pension scheme and pay contributions towards their retirement. For those staff not entitled to join the NHS Superannuation Scheme (Scotland), the Board utilised an alternative pension scheme called NEST to fulfil its Automatic Enrolment obligations. NEST is a defined contribution pension scheme established by law to support the introduction of Auto Enrolment. Contributions are taken from qualifying earnings, which are currently from £5,876 up to £45,000, but will be reviewed every year by the government. The initial employee contribution of 1% of qualifying earnings, with an employer contribution of 1%. This will increase in stages to meet levels set by government.

http://www.sppa.gov.uk/


112

Date Employee Contribution Employer Contribution Total Contribution 1st March 2013 1% 1% 2% 1st October 2018 3% 2% 5% 1st October 2019 5% 3% 8% Pension members can choose to let NEST manage their retirement fund or can take control themselves and alter contribution levels and switch between different funds. If pension members leave the Board they can continue to pay into NEST. NEST Pension members can take money out of NEST at any time from age 55. If suffering from serious ill health or incapable of working due to illness members can request to take money out of NEST early. They can take the entire retirement fund as cash, use it to buy a retirement income or a combination. Additionally members can transfer their NEST retirement fund to another scheme. NEST is run by NEST Corporation, a trustee body which is a non-departmental public body operating at arms length from government and is accountable to Parliament through the Department for Work and Pensions. 2019

Total 2018 Total

£’000 £’000 Pension cost charge for the year 55,528 57,089 Provisions/liabilities/prepayments included in the Statement of Financial Position

4,573

4,745

NOTE 20 FINANCIAL INSTRUMENTS A FINANCIAL INSTRUMENTS BY CATEGORY Financial Assets

CONSOLIDATED

Financial assets at fair value

through OCI

Financial assets at fair value through

profit/loss

Total

Note £’000 £’000 £’000 As at 31 March 2019 Assets per Statement of Financial Position

Investments 10 0 24,488 24,488 Trade and other receivables excluding prepayments, reimbursements of provisions and VAT recoverable

9

11,644

0

11,644 Cash and cash equivalents 11 5,034 0 5,034 16,678 24,488 41,166


113

BOARD


OCI


profit/loss

Total


Investments 10 0 277 277 Trade and other receivables excluding prepayments, reimbursements of provisions and VAT recoverable

9

11,517

0

11,517 Cash and cash equivalents 11 170 0 170 11,687 277 11,964

CONSOLIDATED (Prior Year)


OCI


profit/loss

Total


Investments 10 0 23,813 23,813 Trade and other receivables excluding prepayments, reimbursements of provisions and VAT recoverable

9

12,312

0

12,312 Cash and cash equivalents 11 558 0 558 12,870 23,813 36,683

BOARD (Prior Year)


OCI


profit/loss

Total


Investments 10 0 277 277 Trade and other receivables excluding prepayments, reimbursements of provisions and VAT recoverable

9

11,977

0

11,977 Cash and cash equivalents 11 393 0 393 12,370 277 12,647


114

Financial Liabilities CONSOLIDATED

Financial liabilities at

amortised cost

Total

Note £’000 £’000 As at 31 March 2019 Liabilities per Statement of Financial Position

Finance lease liabilities 12 5,651 5,651 PFI Liabilities 12 107,157 107,157 Trade and other payables excluding statutory liabilities (VAT and income tax and social security), deferred income and superannuation

12

60,733

60,733 173,541 173,541

BOARD Financial

liabilities at amortised cost

Total


12

Finance lease liabilities 5,651 5,651 PFI Liabilities 12 107,157 107,157 Trade and other payables excluding statutory liabilities (VAT and income tax and social security), deferred income and superannuation

12

58,646

58,646 171,454 171,454 CONSOLIDATED (Prior Year)

Financial liabilities at

amortised cost

Total


Finance lease liabilities 12 5,967 5,967 PFI Liabilities 12 85,381 85,381 Trade and other payables excluding statutory liabilities (VAT and income tax and social security), deferred income and superannuation

12

67,431

67,431 158,779 158,779


115

BOARD (Prior Year) Financial

liabilities at amortised cost

Total


12 5,967 5,967

PFI Liabilities 12 85,381 85,381 Trade and other payables excluding statutory liabilities (VAT and income tax and social security), deferred income and superannuation

12 65,370

______

65,370

______ 156,718 156,718 B FINANCIAL RISK FACTORS Exposure to Risk The Board’s activities expose it to a variety of financial risks. Credit risk – the possibility that other parties might fail to pay amounts due. Liquidity risk – the possibility that the NHS Board might not have funds available to meet its commitments to make payments. Market risk – the possibility that financial loss might arise as a result of changes in such measures as interest rates, stock market movements or foreign exchange rates. Because of the largely non-trading nature of its activities and the way in which government departments are financed, the NHS Board is not exposed to the degree of financial risk faced by business entities. a) Credit Risk Credit risk arises from cash and cash equivalents, deposits with banks and other institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. For banks and other institutions, only independently rated parties with a minimum rating of “A” are accepted. Customers are assessed, taking into account their financial position, past experience and other factors, with individual credit limits being set in accordance with internal ratings in accordance with parameters set by the NHS Board. The utilisation of credit limits is regularly monitored. No credit limits were exceeded during the reporting period and no losses are expected from non-performance by any counterparties in relation to deposits. b) Liquidity Risk The Scottish Parliament makes provision for the use of resources by the NHS Board for revenue and capital purposes in a Budget Act for each financial year. Resources and accruing resources may be used only for the purposes specified and up to the amounts specified in the Budget Act. The Act also specifies an overall cash authorisation to operate for the financial year. The NHS Board is not therefore exposed to significant liquidity risks. The Endowment Fund is required to remain in credit and is therefore not exposed to liquidity risk.


116

The table below analyses the financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. As at 31 March 2019

Less than 1 year £’000

Between 1 and 2 years £’000


Over 5 years £’000

PFI Liabilities 17,785 17,785 53,355 266,524 Finance lease liabilities 1,278 1,278 3,625 9,522 Total 19,063 19,063 56,980 276,046 As at 31 March 2018

Less than 1 year £’000



Over 5 years £’000

PFI Liabilities 15,186 15,186 45,557 231,744 Finance lease liabilities 1,180 1,180 3,448 9,876 Total 16,366 16,366 49,005 241,620 c) Market Risk The Board has no powers to borrow or invest surplus funds. Financial assets and liabilities are generated by day-to-day operational activities and are not held to manage the risks facing the NHS Board in undertaking its activities. The Endowment Fund invests in marketable securities which are exposed to market risk.

i) Cash Flow and Fair Value Interest Rate Risk The Board has no significant interest bearing assets or liabilities and as such income and

expenditure cash flows are substantially independent of changes in market interest rates. The Endowment Fund holds investments in interest bearing securities, which bear inherent interest rate risk.

ii) Foreign Currency Risk

The Board is not exposed to foreign exchange risks. The Endowment Fund holds foreign investments, which bear inherent foreign currency risk.

iii) Price Risk The Board is not exposed to equity security price risk. The Endowments Fund holds investments in marketable securities, which are exposed to market risk.

C FAIR VALUE ESTIMATION The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is determined using valuation techniques. Valuation is at transaction price. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair value. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current HM Treasury interest rate that is available for similar financial instruments.


117

NOTE 21 DERIVATIVE FINANCIAL INSTRUMENTS (Consolidated and Board) The Board does not hold any derivative financial instruments.

NOTE 22 RELATED PARTY TRANSACTIONS

The Board has various material transactions with other government departments, including HM Revenue

and Customs, other central government bodies, NHS Bodies and Local Authorities.

Tayside NHS Board Endowment Funds are managed by trustees who are also directors of the Board.

Total income, expenditure and outstanding balances of the Endowment Funds are as follows:

2019 £’000

2018 £’000

Income 6,396 1,818 Expenditure 2,013 4,215 Trade and other receivables at 31 March 162 526 Trade and other payables at 31 March 2,122 2,242

Dr A Cowie was a non executive director of the Board until 31 May 2018 and was also a General

Practitioner within Hawkhill Medical Practice. During the year the Board entered in the following material

transactions with Hawkhill Medical Practice.

2019 £’000

2018 £’000

Expenditure 1,459 1,407

Taycare Ltd is the Non Profit Distributing Organisation (NPDO) that provides and maintains the mental

health facilities at Stracathro and Murray Royal. The NPDO requires a stakeholder director who is a

director of Tayside Health Board. This post is filled by the Director of Finance. Payments made in the

year in respect of the unitary charge for the NPDO and non-recurring payments in relation to variations

were:

2019 £’000

2018 £’000

Expenditure 12,871 12,880 Trade and other payables at 31 March 900 882

Councillor Ken Lynn is a non executive director of the Board and is also a board member with Tayside

Council on Alcohol. During the year the Board entered into the following material transactions with

Tayside Council for Alcohol:

2019 £’000

2018 £’000

Expenditure 178 160


118

The integration of adult health and social services resulted in the creation of three Health and Social

Care Partnerships (Integration Joint Boards) established between Tayside NHS Board and the

respective local authorities. The voting members of each IJB are appointed through nomination by NHS

Tayside and each respective local authority. The voting membership of each IJB Board is split equally

between local authority and NHS Tayside representatives. Nomination of the IJB Chair and Vice Chair

post holders alternates between a councillor and a health board representative.

Perth and Kinross Integration Joint Board

2019 £’000

2018 £’000

Income 151,424 147,144 Expenditure 153,894 147,144 Trade and Other Payables 2,470 0

Angus Integration Joint Board

2019 £’000

2018 £’000


Dundee Integration Joint Board

2019 £’000

2018 £’000


NOTE 23 THIRD PARTY ASSETS These are not departmental assets and are not included in the accounts. The assets held at the reporting period date to which it was practical to ascribe monetary values comprised monetary assets, such as bank balances and monies on deposit and listed securities. They are set out in the table immediately below. 2018

Gross

Inflows Gross

Outflows 2019

£’000 £’000 £’000 £’000

Monetary amounts such as bank balances and monies on deposit

534

412

(454)

492

Total monetary assets 534 412 (454) 492


119

NOTE 24a CONSOLIDATED STATEMENT OF COMPREHENSIVE NET EXPENDITURE

Board Endowment

Intra Group Adjustment

Angus IJB Dundee IJB

Perth & Kinross

IJB

Consolidated Consolidated

2019 2019 2019 2019 2019 2019 2019 2018 Note £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Total income and expenditure

Employee expenditure 3 551,655 0 0 0 0 0 551,655 539,621 Other operating expenditure 3

Independent primary care services

123,687 0 0 0 0 0 123,687 118,701

Drugs and medical supplies

187,633 0 0 0 0 0 187,633 191,046

Other health care expenditure

671,185

2,013

(3,638)

0

0

0

669,560

667,631

Gross expenditure for the year

1,534,160 2,013 (3,638) 0 0 0 1,532,535 1,516,999

Less: operating income 4 (608,363) (6,396) 3,638 0 0 0 (611,121) (617,043) Associates and joint ventures accounted for on an equity basis

0

0

0

(2,527)

896

(1,235)

(2,866)

741 Net Expenditure 925,797 (4,383) 0 (2,527) 896 (1,235) 918,548 900,697

Other non clinical services costs of £2.013 million and other operating income of £6.396 million are the expenditure and income relating to the Endowment

Fund. The Endowment Fund Trustees are also members of the NHS Board which means that the accounts of the Endowment Fund are consolidated and

transactions between the Board and the Endowment Fund are eliminated on consolidation. Joint Ventures accounted for on an equity basis discloses the

Board’s share of any current year surplus or the utilisation of reserves for each Integration Joint Board.


120

NOTE 24b CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Board Endowment


Angus IJB

Dundee IJB

Perth & Kinross

IJB


2019 2019 2019 2019 2019 2019 2019 2018 Note £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Non-current assets Property, plant and equipment SoFP 531,306 24 0 0 0 0 531,330 531,771 Intangible assets SoFP 312 0 0 0 0 0 312 595 Financial assets:

Investments SoFP 277 24,211 0 0 0 0 24,488 23,813 Investments in associates and joint ventures

24a

0

0

0

3,008

1,383

1,235

5,626

2,760

Trade and other receivables

SoFP

1,978

0

0

0

0

0

1,978

2,873

Total non-current assets 533,873 24,235 0 3,008 1,383 1,235 563,734 561,812 Current assets Inventories SoFP 8,363 26 0 0 0 0 8,389 8,130 Intangible assets SoFP 0 0 0 0 0 0 0 0 Financial assets:

Trade and other receivables

SoFP

65,112

162

(35)

0

0

0

65,239

75,811

Cash and cash equivalents

SoFP

170

4,864

0

0

0

0

5,034

558

Investments SoFP 0 0 0 0 0 0 0 0 Derivatives financial assets

SoFP

0

0

0

0

0

0

0

0

Assets classified as held for sale

SoFP

861

0

0

0

0

0

861

861

Total current assets 74,506 5,052 (35) 0 0 0 79,523 85,360

Total Assets 608,379 29,287 (35) 3,008 1,383 1,235 643,257 647,172


121

Current Liabilities Provisions SoFP (16,441) 0 0 0 0 0 (16,441) (10,008) Financial liabilities

Trade and other payables SoFP (81,843) (2,122) 35 0 0 0 (83,930) (91,918) Derivatives financial liabilities

SoFP

0

0

0

0

0

0

0

0

Total Current Liabilities (98,284) (2,122) 35 0 0 0 (100,371) (101,926) ______ Non-current assets plus / less net current assets / liabilities

510,095 27,165 0 3,008 1,383 1,235 542,886 545,246

Non-current liabilities Provisions SoFP (77,275) 0 0 0 0 0 (77,275) (94,746) Financial liabilities:

Trade and other payables SoFP (110,452) 0 0 0 0 0 (110,452) (89,483) Liabilities in associates and joint ventures

24a

0

0

0

0

0

0

0

0

Total non-current liabilities (187,727) 0 0 0 0 0 (187,727) (184,229) Assets less liabilities 322,368 27,165 0 3,008 1,383 1,235 355,159 361,017 Taxpayers’ Equity General fund SoFP 105,247 0 0 0 0 0 105,247 120,500 Revaluation Reserve SoFP 217,121 0 0 0 0 0 217,121 215,731 Other Reserves –joint venture SoFP 0 0 0 3,008 1,383 1,235 5,626 2,760 Funds Held on Trust SoFP 0 27,165 0 0 0 0 27,165 22,026 Total taxpayers’ equity 322,368 27,165 0 3,008 1,383 1,235 355,159 361,017

Intra group adjustments of £0.035 million represent the net indebtedness between the Endowment Fund and the NHS Board, arising as a result of

transactions paid by the NHS Board on behalf of the Endowment Fund. These will be reimbursed by the Endowment Fund and are eliminated on

consolidation.


122

NOTE 24c CONSOLIDATED STATEMENT OF CASHFLOWS

Board Endowment


Angus IJB

Dundee IJB

Perth & Kinross IJB


2019 2019 2019 2019 2019 2019 2019 2018 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Cash flows from operating activities Net operating expenditure (925,797) 4,383 0 2,527 (896) 1,235 (918,548) (900,697) Adjustments for non-cash transactions 24,936 0 0 (2,527) 896 (1,235) 22,070 24,281 Add back: interest payable recognised in net operating expenditure

8,760

0

0

0

0

0

8,760

9,241

Deduct: interest receivable recognised in net operating expenditure

(62)

0

0

0

0

0

(62)

(41)

Movements in working capital 12,420 235 0 0 0 0 12,655 (2,722) Net cash outflow from operating activities (879,743) 4,618 0 0 0 0 (875,125) (869,938) Cash flows from investing activities Purchase of property, plant and equipment (36,536) 0 0 0 0 0 (36,536) (9,518) Purchase on intangible assets 0 0 0 0 0 0 0 (247) Investment additions 0 (4,983) 0 0 0 0 (4,983) (2,035) Proceeds of disposal of property, plant and equipment

(66)

0

0

0

0

0

(66)

1,327

Proceeds of disposal of intangible assets 176 0 0 0 0 0 176 0 Receipts from sale of investments 0 5,064 0 0 0 0 5,064 2,368 Interest received 62 0 0 0 0 0 62 41 Net cash outflow from investing activities (36,364) 81 0 0 0 0 (36,283) (8,064)

Cash flows from financing activities Funding 903,407 0 0 0 0 0 903,407 889,011 Movement in general fund working capital 1,043 0 0 0 0 0 1,043 (1,265) Cash drawn down 904,450 0 0 0 0 0 904,450 887,746 Capital element of payments in respect of finance leases and on-balance sheet PFI contracts

21,460

0

0

0

0

0

21,460

(1,718)

Interest paid 273 0 0 0 0 0 273 (126) Interest element of finance leases and on-balance sheet PFI/PPP contracts

(9,033)

0

0

0

0

0

(9,033)

(9,115)

Net Financing 917,150 0 0 0 0 0 917,150 876,787


123

Net increase/(decrease) in cash and cash equivalents in the period

1,043

4,699

0

0

0

0

5,742

(1,215)

Cash and cash equivalents at the beginning of the period

(1,176)

162

0

0

0

0

(1,014)

201

Cash and cash equivalents at the end of the period

(133)

4,861

0

0

0

0

4,728

(1,014)

Reconciliation of net cash flow to movement in net debt/cash

Increase/(decrease) in cash in year 1,043 4,699 0 0 0 0 5,742 (1,215) Net debt/cash at 1 April (1,176) 162 0 0 0 0 (1,014) 201 Net debt/cash at 31 March (133) 4,861 0 0 0 0 4,728 (1,014)


124

NOTE 25 IFRS9 The Board adopted IFRS 9 Financial Instruments for the first time in 2018/19. In accordance with HM

Treasury's Financial Reporting Manual (FReM), the Board has adopted the modified transitional

approach and therefore the 2017/18 financial statements are as previously reported. Under the modified

approach, the cumulative impact of initial application of the standard is recognised at 1 April 2018 with

no restatement of prior periods.

The Board has assessed the business models for managing financial assets and analysed their cash

flow characteristics. The impact to the primary financial statements of applying the standard is set out

below. The tables reconcile the carrying amounts of financial assets from their previous measurement

under IAS 39 to the new measurement under IFRS 9 as at 1 April 2018.

STATEMENT OF COMPREHENSIVE NET EXPENDITURE

Pre-IFRS 9 Remeasurement As reported 2018-19

Total income and expenditure Employee expenditure 539,621 0 539,621 Other expenditure

Independent Primary Care Services

118,701

0

118,701

Drugs and medical supplies 191,046 0 191,046 Other health care expenditure 667,631 0 667,631

Less: operating income (617,043) 0 (617,043) 899,956 0 899,956 Associates and joint ventures accounted for on an equity basis

741

0

741

Net expenditure for the year 900,697 0 900,697

STATEMENT OF FINANCIAL POSITION

Pre-IFRS 9 Remeasurement As reported 2018-19

Non-current assets Property, plant and equipment 531,771 0 531,771 Intangible assets 595 0 595 Financial assets:

Investments 23,813 0 23,813 Investments in associates and joint ventures

2,760

0

2,760

Trade and other receivables 2,873 28 2,901 561,812 28 561,840


125

Current Assets

Inventories 8,130 0 8,130 Intangible assets 0 0 0 Financial assets:

Trade and other receivables 75,811 0 75,811 Cash and cash equivalents 558 0 558 Investments 0 0 0 Derivatives financial assets 0 0 0

Assets classified as held for sale 861 0 861 85,360 0 85,360 TOTAL ASSETS 647,172 28 647,200 Current Liabilities Provisions (10,008) 0 (10,008) Financial liabilities:

Trade and other receivables (91,918) 0 (91,918) Derivatives financial liabilities 0 0 0

TOTAL CURRENT LIABILITIES (101,926) 0 (101,926) Non-Current Assets Plus/Less Net Current Assets

545,246

28

545,274

Non-current liabilities Provisions (94,746) 0 (94,746) Financial liabilities:

Trade and other payables (89,483) 0 (89,483) Liabilities in associates and joint ventures

0

0

0

Total non-current liabilities (184,229) 0 (184,229) Assets less liabilities 361,017 28 361,045 Taxpayers’ Equity General fund 120,500 0 120,528 Revaluation reserve 215,731 0 215,731 Other reserves – associates and joint ventures

2,760

0

2,760

Fund held on Trust 22,026 0 22,026 Total taxpayers’ equity 361,017 28 361,045


126

STATEMENT OF CASHFLOWS Pre-IFRS 9 Remeasurement As reported 2018-19

Cash flows from operating activities Net operating expenditure (900,697) 0 (900,697) Adjustments for non-cash transactions 24,281 0 24,281 Add back: interest payable recognised in net operating expenditure

9,241

0

9,241

Deduct: interest receivable recognised in net operating expenditure

(41)

0

(41)

Investment Income 0 0 0 Movements in working capital (2,722) 0 (2,722) Net cash outflow from operating activities (869,938) 0 (869,938) Cash flows from investing activities Purchase of property, plant and equipment (9,518) 0 (9,518) Purchase of intangible assets (247) 0 (247) Investment additions (2,035) 0 (2,035) Transfer of assets to/(from) other NHS bodies 0 0 0 Proceeds of disposal of property, plant and equipment

1,327

0

1,327

Proceeds of disposal of intangible assets 0 0 0 Receipts from sale of investments 2,368 0 2,368 Interest received 41 0 41 Net cash outflow from investing activities (8,064) 0 (8,064) Cash flows from financing activities Funding 889,011 0 889,011 Movement in General Fund working capital (1,265) 0 (1,265) Cash drawn down 887,746 0 887,746 Capital element of payments in respect of finance leases and on-balance sheet PFI contracts

(1,718)

0

(1,718) Interest paid (126) 0 (126) Interest element of finance leases and on-balance sheet PFI/PPP contracts

(9,115)

0

(9,115)

Net Financing 876,787 0 876,787 Net increase/(decrease) in cash and cash equivalents in the period

(1,215)

0

(1,215)

Cash and cash equivalents at the beginning of the period

201

0

201

Cash and cash equivalents at the end of the period

(1,014)

0

(1,014)

Reconciliation of net cash flow to movement in net debt/cash

Increase/(decrease) in cash in year (1,215) 0 (1,215) Net debt/cash at 1 April 201 0 201 Net debt/cash at 31 March (1,014) 0 (1,014)


127

Tayside Health Board

DIRECTION BY THE SCOTTISH MINISTERS

1. The Scottish Ministers, in pursuance of sections 86(1), (1B) and (3) of the National Health Services (Scotland) Act 1978, hereby give the following direction.

2. The statement of accounts for the financial year ended 31 March 2006, and subsequent years, shall comply with the accounting principles and disclosure requirements of the edition of the Government Financial Reporting Manual (FReM) which is in force for the year for which the statement of accounts are prepared.

3. Subject to the foregoing requirements, the accounts shall also comply with any accounts format, disclosure and accounting requirements issued by the Scottish Ministers from time to time.

4. The accounts shall be prepared so as to give a true and fair view of the income and expenditure and cash flows for the financial year, and of the state of affairs as at the end of the financial year.

5. This direction shall be reproduced as an appendix to the statement of accounts. The direction given on 30 December 2002 is hereby revoke

Signed by the authority of the Scottish Ministers

Dated: 10/02/06

tayside health board annual report and accounts for year

Documents