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 and Scottish Government


The eHealth Leads includes representatives from across territorial health boards, national boards and the Scottish Government. From review of eHealth minutes and email correspondence from the NHS Tayside Director of Finance, NSS Head of Finance, and the former Deputy Director (eHealth) the rationale for NHS Tayside receiving the funds is inconclusive. Through discussions with the former eHealth Deputy Director and NSS Head of Finance, we have been informed that NHS Tayside were ‘holding’ the funds as that they had the capacity to do so. There does not appear to have been any challenge or scrutiny of this proposed arrangement either when it was initially established or in the subsequent years.

At the eHealth Finance subgroup meeting of 2 February 2015, the NSS Head of Finance noted at that “ there is a new Finance Director in NHS Tayside and the current arrangements may be an issue; IT to investigate this further however it was recognised that there is a Plan B in place if this is no longer appropriate” The NSS Head of Finance, eHealth Lead from NHS Dumfries and Galloway and former eHealth Deputy Director have informed us that the ‘Plan B’ was to return the funds to the Scottish Government. This option was not considered as NHS Tayside were comfortable to continue with the arrangement.

The treatment of the eHealth funds is inconsistent with Scottish government funding principles of annual resource allocations to meet annual challenges. There appears to have been a degree of naivety across eHealth leads members around the impact on NHS Tayside of ‘holding’ funds on behalf of eHealth as well as within the Scottish Government when these transfers were requested. Discussions with senior members of eHealth indicate that the primary focus of the group was the delivery of a multi-year national programme and therefore there was not a significant level of focus around financial year end balances. Furthermore, the membership of the eHealth Leads group was predominantly project and technical specialists and therefore limited financial experience.

Finding 7: From review of the eHealth committee and finance sub-committee we noted a lack of scrutiny and challenge from eHealth leads to question the nature of the arrangements in place to allow NHS Tayside to ‘hold’ the funds. This was partly due to historic arrangements with NHS Tayside and in our review a lack of NHS finance experience on the group to challenge the arrangements. It appears that decisions were being made at this forum that were directly impacting on Boards’ resource allocation but without sufficient financial representation.

eHealth and Scottish Government (continued)

Transactions continued

We have inconsistencies in key parties understanding around responsibility for eHealth funds. From discussions with the former eHealth Deputy Director as well as the NSS Head of Finance and NHS Tayside Head of Finance, there does not appear to be a clear understanding of roles and responsibilities in relation to the transfer of revenue resource allocations. In our opinion this is ultimately the responsibility of the eHealth Deputy Director.

Finding 8: The Deputy Director eHealth has responsibility for ensuring resources under his remit are expended appropriately. In our view, the approval to transfer allocations to NHS Tayside at the end of each financial year was inappropriate given the former Deputy Director of eHealth was aware these funds would not be utilised by NHS Tayside in year for the purposes intended. We acknowledge that colleagues from NHS Tayside and NSS have their own duty of care surrounding the use of these funds as well as the wider eHealth leads group. From review, there appears to be limited financial support available to the Deputy Director of eHealth with significant reliance on information provided by the NSS Head of Finance.

eHealth and Scottish Government (continued)

Scottish Government finance

The resource transfer requests are passed on by the authoriser (Deputy Director of eHealth) to officers within the Scottish Government Health directorate for processing. These funds are processed with authorisation from the relevant budget holder (eHealth Deputy Director) within the Scottish Government and the budget allocation is adjusted through revenue resource allocation process. The allocations form part of the SGHSCD standard funding allocations arrangements. While there may have been an opportunity for more robust scrutiny of these transfers centrally, there are a significant volume of allocation adjustments processed across all health boards throughout the year. In addition, negative allocations to boards are not unusual transactions and in the context of health board revenue allocations, the balances being transferred are not significant. Consequently, there is an inherent reliance on scrutiny and authorisation from budget holders to ensure that the transfer is appropriate.

We have noted that currently the narrative to support the revenue resource transfers is limited on the resource transfer request form. Therefore we would have expected greater scrutiny of the supporting email trail to enable the finance team to understand the rationale for the transfer and sense check that it was appropriate. The email trail would have highlighted the purpose of the funds transfer. In our opinion this should have resulted in concerns being escalated sooner around the appropriateness of the arrangement. Furthermore, for the authorisation of Out of Hours and CHI balances in 2016 and 2017, senior officers within the Scottish Government, including the Head of Primary Care, were included in email trails that noted that NHS Tayside were retaining funds.

Finding 9: Whilst we recognise that the revenue resource transfers are authorised by appropriate budget holders within the Scottish Government, we would expect there to be scrutiny of these within finance before processing. Given the limited information on the transfer form, our expectation would be that the supporting email trail would have been reviewed which should have highlighted that a Health Board was holding balances at the year end.

From review of the revenue resource transfers since 2012 relating to eHealth monies between NHS Tayside, NSS and the Scottish Government, we have confirmed that all but one transaction has been authorised by the Deputy Director of eHealth. During 2016/17 the return of £647,000 of eHealth resource allocations from NHS Tayside to NHS NSS via the Scottish Government did not include formal email confirmation from the Deputy Director of eHealth. However, we are satisfied that there was sufficient oversight through the initial transaction (i.e. known this was due for return) and from minutes of the eHealth Leads group that the Deputy Director was aware of this transaction. However, it still should have been formally authorised.

eHealth and Scottish Government (continued)

Governance and oversight

Whilst we recognise financial performance is discussed, we believe the quality of the financial reporting could be significantly enhanced. From review of the financial monitoring reports we identified that the £1.932 million allocation to NHS Tayside was reported as coming from the Scottish Government’s eHealth budget allocation (circa £7 million) rather than from the reinvestment fund (as described in the allocation). In addition, the tracker does not cover the additional allocations that were made to NHS Tayside for Out of Hours and CHI funds. While these fall within the overall eHealth budget they don’t form an explicit part of the reinvestment fund.

During 2016/17, the SGHSCD Financial Performance Manager met with representatives from NSS which we understand was to discuss overall national programme finance, including eHealth. While the meetings were not minuted, NSS internal audit clarified that the papers included reference to NHS Tayside retaining funds on behalf of the eHealth programme.

Finding ten: There are opportunities to enhance the current financial monitoring arrangements in place across the eHealth Leads group as well as the finance sub-committee to provide more transparent monitoring for the group of the overall programme. While we acknowledge that the Scottish Government eHealth central budget is not within the remit of the eHealth Leads group, it is important to ensure transparency of amounts reported.

Whilst we have identified opportunities to enhance the financial reporting and monitoring arrangements, discussions with various members of the eHealth Leads group and review of minutes makes it clear that there was a clear understanding that NHS Tayside were ‘holding’ the funds on behalf of eHealth. However, what was not clear or considered at the meetings was the implications for accounting for such arrangements.


Back to top