2. AAG Recommendation 2 – Financial Planning Process
"Over the next three months, NHS Tayside should subject its financial planning framework to rigorous and comprehensive review. This should help to ensure that projections and targets for future years are based on a thorough service by service understanding of cost drivers, risks and opportunities."
2.1 NHS Tayside's Assessment – Rating = Amber
"We have undertaken, in conjunction with NSS [National Services Scotland], the development and implementation of a new Business Planning and Budgeting Programme (BPB) over the past nine months to build towards a recurring, sustainable financial balance position through 2018/19, incorporating service, workforce and financial planning. We have held a Board Development Event to position the Board around the BPB and to understand their appetite for risk and service change. Under the BPB, the services are due to submit their group service plans, associated budgets and efficiency measures for budget review scrutiny in October and December 2017. Although there has been considerable support to individual groups and service teams, this is a new process and will be heavily supported to ensure that it delivers plans for achieving financial balance in the next financial year 2018/19. In the next phase, between October and December 2017, we will need to demonstrate that the service plans are realistic and achievable and can evidence affordability in the short to medium term. At this stage, as we implement a new financial planning process, the status of this recommendation is assessed as 'Amber'."
2.2 TST comment - Rating = Amber
The TST agrees with NHS Tayside's assessment that this recommendation currently has an Amber risk rating, given that the results of the revised process will not be seen until next financial year. However, from the evidence seen by the TST, NHS Tayside has done a considerable amount of ground-work to develop a more robust budget review process and embed the new processes within the various business units. For the revised process to be fully effective, it will be vital for each service area to have a good understanding of what is actually driving the higher costs. Much of this is dependent on the delivery of Recommendation 4.
NHS Tayside has set a deadline of 30 September for each service to present their initial plans. Therefore, between then and the next progress report due at the end of December, the TST would expect to see service plans built up according to the new process and the outcomes of the two Business Planning and Budgeting Reviews which are timetabled to be completed by December 2017.