Governance of NHS Scotland: A Supplement – Sir Ewan Brown

On reading the NHS2048 submissions to Reform Scotland, I realised that my own, “Governance of NHS Scotland“, was strong on criticism, but weak on proposals that might make things better. The purpose of this supplement is to set out what is wrong with much of Scotland’s public sector governance and offer specific suggestions for improvement appropriate to the NHS.

 Suggested governance improvements 

1. Create NHS Scotland as a real entity with a strong, experienced board.
2. Split the roles of NHS chief executive and Director-General Health & Social Care and appoint a chief executive to NHS Scotland with a proven track record in running a large and complex private sector organisation.
3. Reduce the number of NHS regional boards from 14 to 4 and the number of regional board members from a maximum of 28 to a maximum of 15.
4. Detail the responsibilities of regional boards and define their relationship with NHS Scotland.
5. Investigate digitisation opportunities and the application of artificial intelligence to do more for less. Confirm availability of necessary front-end investment to realise the benefits.
6. Replace Blueprint 2 governance guidance with a prescriptive Governance Code applicable across the organisation.
7. Use mapping to clarify accountability across the whole of the NHS in Scotland and strengthen lines of communication.
8. Introduce more effective recruitment and development for chairs and non-executives. Ensure that there is diversity of thought, experience and background on all boards.
9. Each regional health board should include, in addition to the chief executive, a member of staff who is not part of the senior management team.
10. Require NHS Scotland and regional boards to have audit and risk committees comprising only non-executives.
11. Strengthen whistleblowing to give concerned staff direct access to the non-executive members of boards; and, where appropriate, provide assurance of anonymity.
12. Increase the remuneration of board members to reflect their roles and responsibilities. Replace the daily rates element with fixed fees. 

Background
My principal concerns about the present governance structure of the NHS in Scotland are:-

• The authority and discretion of the 14 regional boards, with combined budgets of c£12 billion, has been eroded by the increasing emphasis on a theoretical government entity called NHS Scotland.
• In addition to the regional boards, there are 8 specialist health boards, 3 regional structures, 31 health and social care partnership boards, other non-statutory bodies and the Scottish Government’s Health Directorate – a highly complex matrix in which double-running regional and local interests is complicated by different priorities.
• There have been recent governance failures at several regional boards including Ayrshire & Arran, Lanarkshire, Highland, Tayside, Forth Valley and Greater Glasgow & Clyde.
• When boards can be second guessed by ministers and officials, it takes a massive commitment to public service for anyone with serious career ambitions or achievements to apply to be a chair. 
• The culture and structure of the NHS are such that potential non-executives, who might wish to assert governance authority, are unlikely to be welcome.
• Audit Scotland’s withering condemnation in 2023 was that “regional NHS boards are expected to deliver services well beyond their budgets’ capacity”. This is infeasible.
• Principles of good governance would expect that NHS Scotland, which has a chief executive, should be formally constituted with a chair and non-executive board members providing oversight. This is not the case.
• The 2022 Blueprint 2 governance document, produced by a committee with vested interests, sets out “the key functions and enablers including relationships between Government and NHS Boards and also the delivery, evaluation and continuous improvement methodology underpinning governance”. However, the document has no teeth and is fundamentally flawed.
• The Blueprint document claims to provide “effective governance across NHS Scotland”, with “a primary audience of Board Members and Executive Leadership Teams”. However, it does not apply to NHS Scotland, its chief executive or those who work for her.
• For many years, the chief executive of NHS Scotland has been appointed from within the civil service. It is not clear why the Scottish Government believes that a civil servant, who may never have run a business, is regarded as the best person to head a £19 billion organisation in an executive capacity. 

The proposed integration of health and social care services – if approved by the Scottish Parliament – would add complexity and create major structural challenges. Whether there is full integration or just greater co-ordination than at present, there is the need for strong, transparent, accountable and best-practice governance. 

If nothing is done to address the over-complex, dysfunctional structure and weak governance of the NHS in Scotland, the present crisis is likely to get worse. 

Across the public sector, the Scottish Government’s approach to governance has been irregular and inconsistent. In addition to the NHS, the following examples from other parts of the sector  show a governance framework that was either badly conceived or sadly lacking:-

• Good governance requires the positions of chair and chief executive to be held by different people – otherwise there can be no proper checks and balances. The Edinburgh Tram Inquiry revealed that the Scottish Government, through Transport Scotland, supported the roles of chair and chief executive being combined in one person That person was allowed to lead the contract negotiations that resulted in many years of delay and an overspend of several hundred million pounds. 
• The Ferguson Ferries fiasco has revealed a confusion of strategy and accountability between Transport Scotland, Caledonian Maritime Assets Ltd, Caledonian MacBrayne and Ferguson Marine – all of which are owned by Scottish Ministers. There could be no better example of a government not understanding what good governance means. The outcome has been many years of delay and a monumental waste of public funds.
• The key economic drivers of Enterprise and Skills have been shackled by the Scottish Government creating, in 2017, an umbrella Advisory Board that blunts the autonomy and governance roles of Scotland’s 3 Enterprise Agencies, the Funding Council and Skills Development Scotland. A confusion of responsibilities.
• The structure of the “independent” Scottish National Investment Bank allows for direct government interference. The Scottish Government can influence the Bank through the priorities it sets and by designing its missions. This is a serious risk of politics creeping into the SNIB boardroom and compromising good governance. A recent example of political risk being ignored was the loan the Bank gave to the ill-fated deposit return scheme.
• The governance of Police Scotland involves oversight by the Scottish Police Authority, an independent body tasked with ensuring accountability and transparency. The SPA appoints the Chief Constable and sets the strategic direction for the force. However, since 2013, the SPA has had 3 chairs and an interim chair; and there have been 4 chief executives and 3 interim chief executives of Police Scotland. Together with several well-publicised controversies, this suggests that the governance framework was poorly conceived.
• Audit Scotland reported in December 2023 that there was “unacceptable spending” and “poor governance of public funds” at the Water Industry Commission for Scotland (WICS). WICS is the executive non-departmental body of the Scottish Government responsible for regulating the water and sewage industry. WICS’ chief executive resigned when it was revealed that many thousand pounds of expenditure had been unauthorised.
• Oversight of Transport Scotland, the national transport agency, is provided by the Scottish Government. It is accountable to Parliament and the public. The governance structure requires coordination with regional authorities, local councils, and the private sector. The agency’s inability to prevent the Edinburgh Trams and Ferguson Ferries debacles from happening confirms flawed governance.
• Students at Scotland’s4 Ancient Universities, which are publicly funded, elect Rectors, who preside at Court meetings. Following an ideological Scottish Government intervention in 2016, students also have a vote on who are appointed as Senior Lay Members (who have specific Court responsibilities). Where different student constituencies support persons with opposing views, there is a real risk of creating major conflicts which, in turn, stultifies good governance

Clues to how the Scottish Government consistently fails to appreciate what good NHS governance looks like can be found in the following responses it gave:-

• to a highly critical Times article on NHS Forth Valley- “We are grateful to the many people from a range of backgrounds who come forward to work on NHS boards. All candidates go through a rigorous recruitment process, regulated by the ethical standards Commissioner, and are formally appointed by government ministers”.
• to me in an email – in addition to the non-executive members, health boards contain a mix of executive members that in addition to their executive function have the same governance responsibility as other board members”.

The first response misses the point that relevant skills, knowledge and experience are essential requirements for regional boards, which have annual budgets of up to £2 billion. The second displays a fundamental misunderstanding of the role and purpose of non-executives. While all board members have the same governance responsibility, non-executives should not be appointed to constitute “a mix with executive directors”; but rather to be independent, challenging, diligent, informed – and not influenced by others.

If a purpose of regional boards is to represent, and be accountable to, local communities, why did the 280,000 people in Forth Valley not seem to care when their board was required to step aside because of “failures of leadership, governance and culture”? (Cabinet Secretary Humza Yousaf to Parliament in November 2022) 

There is a sound rationale for regional boards in terms of Scotland’s geography. Boards have a role in sustaining both national and local external relationships which are complex and important – but this should not obscure the need for skilled and transparent governance.

Strengthening governance will not fix an NHS in crisis. However, even a superficial examination of present governance arrangements throws up glaring structural and communication weaknesses that do, inevitably, result in inefficiencies and sub-optimal use of public funds.

The Scottish Government sets national objectives and priorities for the NHS, agrees delivery plans with the regional and other boards, monitors their performance and supports them to ensure achievement of these objectives. However, it is not clear what “the Scottish Government” is in this context. If it relates to the present civil servant-led NHS Scotland, there is a fundamental anomaly with the potential to produce confused governance, labour market inefficiency and a seriously flawed command and control structure.

Irrespective of policy decisions on the merging, or otherwise, of Scotland’s health and social care services, this contribution demonstrates that the status quo is not acceptable. There is an urgent need for a change of approach to governance.

Suggestions to improve the governance of the NHS in Scotland

Structural
Create a real entity that is NHS Scotland, accountable as a whole to Scottish Ministers and at arm’s length, confining Government to policy, monitoring, agreeing strategy and the business of creating, protecting health and preventing disease – and holding the board of NHS Scotland to account. This structural change would likely require a change of legislation.

Separate the roles of NHS chief executive and Director-General Health & Social Care, leaving the civil service to focus on policy and strategic direction.

Appoint a chief executive to NHS Scotland with a proven track record in running a large and complex private sector organisation.

Appoint a chair and non-executive members of the highest possible calibre and establish an audit and risk committee of the NHS Scotland board, comprising only non-executives.

Regional boards
Government statements that “regional boards are responsible for planning, commissioning and delivering NHS services in their area” imply that boards have autonomy and that the Blueprint 2 governance document will enhance their performance. The number and extent of board failures confirms that this has not been the case and that change is essential.

Audit Scotland’s withering criticism, in January 2023, that “regional boards are expected to deliver services well beyond their budget’s capacity”, confirms the need to clearly define the relationship and expectations between regional boards, NHS Scotland and the Scottish Government.

For regional boards to achieve their remits, they need direction at a high level that is clear to interpret and prescribes where accountability lies.

Government should be encouraging the best qualified people to join regional boards as chairs and non-executive members. There needs to be more effective recruitment and development for chairs and non-executives, ensuring diversity of thought, experience and background.

There are 7 regional boards in England serving approximately 60 million people. For a country with a population of around 5.3 million, Scotland has too many regional boards. Some of them serve very small areas, most struggle to identify high-quality board members and very few cover the same area as the country’s 32 local authorities. If the number of regional boards was reduced from 14 to 4, they could cover:-

• Greater Glasgow and Clyde.
• Lothian
• North of Scotland, comprising Fife; Forth Valley; Grampian; Highland; Orkney; Shetland; Tayside; Western Isles.
• South of Scotland, comprising Ayrshire and Arran; Borders; Dumfries and Galloway; Lanarkshire.

Chairs and non-executives of the highest possible calibre should be appointed to the regional boards, with their roles and responsibilities clearly defined. Boards of up to 28 members are unwieldy, face challenges with co-ordination and consensus building and are too big for effective decision making. The number of board members should be reduced to a maximum of 15.

Establish board audit and risk committees, comprising only non-executives.

Appoint chief executives to each of the 4 regional boards.

It may also be worth investigating whether the NHS structure could be further simplified and governance strengthened by combining the 8 speciality boards into a single unit.

Mapping
Stakeholders of the NHS in Scotland, which help to influence clinical and professional standards, include, but are not limited to, health and social care partnerships, local authorities, national clinical groups, Royal Colleges, local and national charities, Police Scotland, Universities, Trade Unions and patient organisations.

To provide relevant data that will assist in building a governance structure for the NHS in Scotland that is appropriate:-

• map the constituent parts of the NHS in Scotland and determine who reports to who; and why.
• map the proposed National Care Service and its relationship to align with the NHS.
• map all significant NHS collaborators and other key stakeholders. Ensure that public services such as the Police (who are collaborators in the myriad partnerships that engage and surround the NHS, with their own governance, accountability, underlying values, and culture) are aligned.
• take account of possible shift of some health care services from hospitals to the community.

Digitisation
Using experienced consultants where appropriate, investigate digitisation opportunities and the application of artificial intelligence to do more for less – and ensure that the Scottish Government finds (either from its own resources or externally), the necessary front-end investment that will be required to fully realise the benefits

Accountability
Clarify accountability across the whole of the NHS in Scotland. The Scottish Hospitals Inquiry is investigating the defective construction of Glasgow’s Queen Elizabeth Hospital Campus,  Edinburgh’s Royal Hospital for Children and Aberdeen’s Baird Family hospital. There is an urgent  need to define who carries responsibility for capital projects and make them accountable.

The Effective Government Forum, a UK non-partisan group argues that power, accountability and finance should be pushed down to the lowest possible level so that there is accountability when things go well – and also when things go badly.

Communication
External: Re-cast the notion that the NHS in Scotland is an arm of political delivery. Promote it as a service with strong values – and manage expectations.

Internal: Strengthen lines of communication across the whole of the NHS in Scotland.

Responsibilities
The Scottish Government’s Cabinet Secretary has the impossible task of being responsible for a £19 billion organisation that is larger, and certainly more complex, than most FTSE 100 companies. The responsibilities include NHS recovery & remobilisation, primary care & GPs, community care, acute services, NHS performance, workforce training, planning & pay, patient services & safety, health & social care integration, health improvement & protection, quality & improvement, person-centred care, eHealth, the NHS estate, the centre of excellence for rural & remote medicine and social care and allied healthcare services.

This huge responsibility carries with it an absolute entitlement for the Cabinet Secretary to take the credit when things go well – but if a strong and relevant governance structure is in place across the NHS in Scotland, he or she should not be held accountable for failures that properly lie at the doors of NHS Scotland or the regional and other boards – but only for failures of policy and its implementation.

Governance Code
The Blueprint 2 governance document:-

• is impenetrable. It runs to 63 pages and 50 footnotes (some longer than the document itself);
• constitutes guidance only, contains no sanctions and is not prescriptive.
• does not appear to require regional boards to submit reports on compliance.
• appears not to apply to NHS Scotland’s chief executive or her senior staff (despite referring to  “executive leadership” and “across NHS Scotland”).
• was sponsored by a regional board chair who had a vested interest in its scope.
• is fundamentally flawed because regional boards are “expected to deliver services beyond their budget’s capacity” (Audit Scotland report of February 2023).
• requires NHS boards to ensure that “robust, accountable and transparent governance arrangements are in place throughout the healthcare system” and “to add a collaborative approach to governance”. Both are beyond the power and authority of a regional board.

These governance weaknesses demand a Code of Governance that:-

• is no longer than 15 to 20 pages (similar to the Governance Code for UK listed companies).
• applies across the NHS in Scotland.
• is prescriptive.
• requires those covered by the Code to comply or explain.
• embraces the core principles of accountability, leadership, integrity, stewardship and transparency.
• adopts effective communication with stakeholders
• does not shelter key people (particularly chairs) when things go wrong (eg NHS Forth Valley).
• gives some protection to board members against civil servants and/or ministers taking decisions that offend the principles and/or the considered judgement of a chair or non-executive.

Whistleblowing
Measures include the Independent National Whistleblowing Officer (INWO). The INWO provides external review of how health boards, independent primary care contractors, and other providers handle whistleblowing cases.

Staff Governance Committees (SGCs) are required to implement the Staff Governance Standard. A function of SGCs is “to oversee the board’s whistleblowing arrangements, including implementation of the national standards, reviewing trends and learning over time and preparation of performance reports for submission to the board”.  From this, it is not clear how whistleblowers can be confident that their concerns will be heard by the non-executives on the board .

Accepted best practice across the private sector provides for the chair and non-executive directors to be made aware of whistleblowing incidents and how they have been resolved – or not. When this was first introduced, companies were worried that there would be a surge in petty and/or vexatious complaints. This did not happen. 

It should be to a board, not a government minister, that a whistleblower can express serious concerns. Arrangements akin to those in the private sector should be implemented by the NHS in Scotland – so that  concerned staff can have a line into the board – and confidentiality assured where appropriate. The board would be required to take seriously the issues that are raised; to consider whether there are any persistent themes; and to take appropriate action.

In practice, responsibility for overseeing whistleblowing would be delegated to a board’s audit and risk committee, which comprises only non-executive members.

Recruitment of board members and their remuneration
Embed better recruitment and development processes for chairs and non-executives. There has been a focus in recent years on diversity as it relates to gender and ethnicity. To be effective, health boards must also ensure they capture diversity of thought, experience and background.

Each regional board should include, in addition to the chief executive, a member of staff who is not a member of the senior management team

To attract chairs and non-executive board members of the highest quality, their remuneration should be increased to align with what is paid for similar roles and responsibilities in the private sector.

Replace the daily rates for non-executives (which, perversely, can discourage attendance at meetings), with an annual fee. Require board members to resign if they don’t attend regularly.

Conduct of board meetings
For chairs and non-executive board members to be effective and properly held to account, it is essential that they receive board papers that are concise, accurate and relevant. The chair should approve all board papers and has a particular responsibility to ensure nothing of importance (good or bad) is withheld from the board.

The Public Bodies (Admissions to Meetings) Act requires health boards to hold board meetings in public. Standing Orders allow boards to meet in private to discuss certain matters. While these arrangements would continue to apply to regional and other boards, the board of NHS Scotland should meet in private – but make public its agendas and minutes.

Sir Ewan Brown, who has served on the boards of listed and private companies, universities and charities, is the author of Corporate Ego. His book describes the spectacular fall from grace of seven prestigious Scottish companies – Burmah Oil, Ivory & Sime, Lilley, HBOS, RBS, Johnston Press and Standard Life; and he identifies major failings in governance as the common cause. Ewan contends that governance in the public sector, and NHS Scotland in particular, is not fit for purpose. 

If you would like to contribute to Reform Scotland’s NHS 2048 forum, please email [email protected]