eHealth funding: independent review

An independent review by Grant Thornton UK LLP on eHealth funding between eHealth, NHS National Services Scotland and NHS Tayside between 2012 and 2018.


eHealth is a national programme designed to deliver the Scottish Government and NHS Scotland’s eHealth Strategy. The Scottish Government eHealth Division support/lead a range of workstreams, working with regional and other Boards, to drive forward the eHealth agenda.

The eHealth programme is administered by NHS NSS on behalf of the Scottish Government and eHealth Leads. The eHealth activity is governed through eHealth Leads Group which includes senior IT representatives from the regional Boards, national Boards (including NSS) and the Scottish Government eHealth Division.

During 2016/17 the Scottish Government invested £73.6 million in the core eHealth national programme. This is allocated across the Boards directly by the SGHSCD.

During the year, in addition to this core funding, discrete funding allocations may occur via RRL transactions related to specific eHealth projects.

NSS Finance manages the reporting of the eHealth financial position against budget and reports monthly to eHealth Leads (and eHealth finance subgroup when in operation).

In 2012, the eHealth Leads group recognised the requirement for a reinvestment fund to be established to support future investment in IT infrastructure. The fund was generated through surplus eHealth monies generated annually through unspent budget allocations achieved through planned efficiencies and unplanned slippages. This, along with subsequent allocations for specific multi-year programmes has resulted in eHealth having balances at the end of each financial year 2012-17 that they wished to carry forward to be used in future years.

As agreed at the eHealth Leads meeting, NHS Tayside have facilitated the carry forward of unspent balances on behalf of eHealth programme since 2012. This coincided with the first year of NHS Tayside’s financial challenges, and therefore they were able to “hold” the funds within their RRL without declaring a potential surplus to be returned to Scottish Government, as they were already in receipt of brokerage.

Background (continued)

Funding allocations

In 2012, the former Deputy Director of eHealth agreed (as minuted) that the forecast reinvestment fund balance at March 2013 of £0.870 million, would be “ carried forward” by NHS Tayside.

This was on the basis that NHS Tayside had the ability to do so. This was because the Board had operational deficits which meant that additional resource allocations did result in significant overspends.

This was transacted through Scottish Government Revenue Resource Limit ( RRL) allocations with NHS Tayside receiving an in year increase in its allocation and NSS receiving an equal and opposite reduction. In 2012/13, NHS Tayside recognised this allocation as part of its Core RRL in the annual financial statements. The transaction was reversed the following year, with the funding allocation returned to NSS.

This arrangement was effectively an informal form of brokerage with NHS Tayside receiving additional resource allocations, which were effectively being used against operational spending pressures and then returned back to NSS via Scottish government through reductions in future years allocation.

In each of the following years, this series of transactions took place for sums ranging between £0.538 million and £2.582 million. In each instance, the initial allocation of the eHealth reinvestment fund has been authorised by the former Deputy Director of eHealth and processed via the SGHSCD reallocation process.

Each of the transactions were reported to the eHealth Leads group (and while in operation the eHealth Finance subgroup) through disclosure in financial monitoring reports covering the eHealth programme, albeit we note these reports are difficult to follow and that the eHealth group as an operational group did not necessarily contain suitable financial expertise. We have agreed each of the transfers to Scottish Government allocation letters.

Background (continued)

Funding allocations continued

The diagram below summarises the process for the transfer of resource allocation between NSS and NHS Tayside via the SGHSCD revenue allocations. The diagram also shows how this allocation is returned in the subsequent financial year. This process was repeated on an annual basis.

flow chart


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