The salaries of senior executives in charge of a widely-criticised Scottish health board have kept rising while they made severe cuts to services.
Payments to the chief executive of NHS Highland rose by seven per cent in four years to £135,000 or over in 2018. Payments to senior medical, nursing, financial and human resources directors also increased over the same period.
At the same time there were cutbacks, with care for the elderly, hospital provision in Caithness and Skye and an Inverness-based autism centre among the health services threatened. NHS Highland has been progressively reducing its spending, with a £35 million cut in 2017-18 and a planned £51 million cut in 2018-19.
NHS Highland has faced accusations in the past of weak financial management, of having a “dysfunctional” executive culture and allowing bullying.
After repeatedly spending more than its budget, the health board is now making what it calls “unprecedented” cuts across the Highlands, Argyll and Bute.
NHS Highland’s chief executive, Elaine Mead, was paid an annual salary of between £115,000 and £120,000 in 2013-14, rising to between £135,000 and £140,000. in 2017-18. She left the job in December 2018.
On top of her salary, Mead was awarded £30,000 of pension benefits in 2017-18, making her total remuneration over £165,000. According to her LinkedIn page, she also works as a visiting professor at the University of Highlands and Islands.
Medical director Rod Harvey, who is stepping down at the end of August, earned even more – at least £185,000 in 2017-18, up from £180,000 in 2015-16. His predecessor, Ian Bashford, earned £140,000 to £145,000 in 2013-14.
One senior NHS Highland employee, director of public health Hugo van Woerden has refused to disclose his salary. His predecessor earned £115,000 to £120,000 in 2013-14.
Senior employees’ pay is governed by Scottish Government rules which are implemented by a remuneration committee of NHS Highland board members.
The rules state that pay increases should vary depending on performance. “Unacceptable” performance should result in no pay rise whereas “superior” or “outstanding performance” should be rewarded with a three per cent pay rise.
An NHS Highland spokesperson said: “The NHS operates to nationally agreed pay scales and jobs are evaluated and graded according to that guidance.”
But the chairman of the campaign group Caithness Health Action Team, Bill Fernie, said: “We have not seen value for money from senior management of NHS Highland and in the far north watched the erosion of our health services to such an extent that people have been marching in the streets of Thurso and Wick. People in Highland deserve better.”
The director of the High Pay Centre, Luke Hildyard, said: “Excessive executive pay in the public sector has been driven by rampant pay inequality in private companies, where gaps between high and low earners have widened considerably in recent decades.”
Hildyard continued: “The public sector executive pay culture reflects an approach that is totally at odds with the public service ethos. It takes the view that the progress of organisations – and society as a whole – depends on a tiny handful of leaders at the top, rather than the collective efforts of all stakeholders.”
Local Conservative MSP, Edward Mountain, said he did not want to comment on salaries but added that he had “severe reservations” about NHS Highland’s previous executive management. A new chief executive took over in January 2019 and Mountain said he was “delighted” at the change.
NHS Highland has a really bad reputation for financial management. Edward Mountain, Conservative MSP
“NHS Highland has a really bad reputation for financial management,” Mountain added.
“They haven’t had a distinctive plan for the future which allows them to budget for it. It’s on a very ad-hoc basis and they swing and cut things and change things and I’m just not seeing a strategic plan which allows them to get the budget on track.”
During Mead’s tenure, the Scottish Government had to plug NHS Highland’s budget deficits twice. According to the Auditor General, the board is likely to need bailing out every year until at least 2021-22.
NHS Highland has attributed its overspending to the rising cost of drugs, changes to sick pay, an ageing population, increasing expectations, fuel poverty, inequality and the unexpectedly high cost of adult social care.
In a report published in October 2014 the Auditor General Scotland watchdog recognised that some of these factors were driving up costs. However, it also criticised “weaknesses in financial management”, particularly at Raigmore Hospital in Inverness where spending has consistently outstripped the budget.
In 2015, the Scottish Parliament’s public accounts committee also criticised what it deemed “complacency” over budget management at Raigmore Hospital and “slow progress” in addressing the problems.
NHS Highland is also paying private companies for three facilities built under Private Finance Initiative (PFI) contracts.
Under PFI, instead of the public sector paying upfront for a new building, they agree to pay a private firm an annual fee to take on the entire construction and management.
One facility built under PFI in 2000 is the New Craigs Hospital which is worth about £14m. According to 2012 UK Treasury data, NHS Highland will pay around £108m in total for it – with spending continuing until at least 2025.
The same data reveals that every year, NHS Highland is contracted to pay about £5m a year on the New Craigs Hospital contract, £1.6m a year for the Easter Ross primary care resource centre and £2.6m for the mid-Argyll hospital in Lochgilphead.
An NHS Highland spokesperson said that the money spent on these contracts includes “provision for payment of maintenance and life cycle replacement costs over lengthy concession periods” rather than just the build cost.
NHS Highland’s spending on public relations has also increased, from £360,000 in 2014-15 to £480,000 in 2016-17.
Recruiting of ‘locum’ rather than full-time staff is another drain on NHS Highland’s finances. NHS Highland says they have to employ locum staff as permanent staff are becoming increasingly difficult to recruit and retain – both due to a national staff shortage and “the challenges of rural recruitment”.
We feel the culture and leadership of the organisation is a risk to our stated values and objectives. NHS Highland non-executive board members
According to Edward Mountain though, NHS Highland is struggling to recruit and retain staff because reports of bullying at the health board are putting people off applying.
In September 2018 four doctors claimed there was a “long standing bullying culture” at NHS Highland. The doctors said that bullying led to high turnover of staff at Raigmore Hospital and Fort William’s Belford Hospital.
A spokesperson for the GMB trade union told The Ferret that the previous executive culture was “dysfunctional” and “directly contributed to the culture of bullying” that the doctors blew the whistle on.
In August 2017, the non-executive members of the NHS Highland board – those who are not in day to day charge of the organisation – passed a motion which said: “We feel the culture and leadership of the organisation is a risk to our stated values and objectives”.
A May 2018 corporate governance review recommended “externally facilitated support, such as mediation, to provide a safe and secure environment for board members to meet with (then chair of the board David Alston) and (then chief executive Elaine Mead) to discuss recent concerns”.
The Scottish Government welcomed NHS Highland’s new chief executive, Iain Stewart, engaging with staff and communities. “The board’s budget has been increased every year since 2007 and will be a record high of £627 million in 2019-20 – up by over £200 million since 2007,” said a spokesperson.
The government has commissioned lawyer, John Sturrock, to conduct an independent inquiry into alleged bullying and his report is expected to be released soon.
An NHS Highland spokesperson said: “The new chief executive, Iain Stewart, and interim chair, Boyd Robertson, will be working closely with the senior leadership team and stakeholders across Highland and Argyll and Bute to address the challenges of delivering first class healthcare within its financial resources.”
Photo of Raigmore Hospital in Inverness thanks to Richard Dorrell, via Wikimedia Commons.