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We have allocated an extra £31 million in the budget to ensure that all boards are within 0.6 per cent of NRAC parity. The largest chunk of that goes to NHS Lothian and NHS Fife.

The review group is called the technical advisory group on resource allocation. It has met three times so far, and it is drawing together work to take forward the review of NRAC. I should say that it will not be a quick process. It will take a lot of detailed work to take forward any funding formula changes or developments. The group has already started commissioning the data and information that it requires in order to look at how it could adapt the existing NRAC formula. Richard McCallum might be able to say a bit more on how it is progressing.

I will bring in Richard McCallum to talk about our work with boards on how we can share learning.

We have a formal process for monitoring all our boards’ performance, not just in terms of key targets but around financial management. We also conduct an annual review process for each of our boards to evaluate the progress that they are making; they have an in-year review as well.

One challenge that has been around for a long time—I recall this from when I was previously a junior health minister—is trying to make sure that, where there is good practice in one part of the country, it is replicated in other parts of the country. That challenge is not peculiar to health; it is a challenge within the public sector overall. It is always a source of frustration to me that, in a country of 5 million people, we struggle at times to make sure that good practice is replicated and that where it is established, it sticks.

We have a number of different mechanisms through which we seek to do that. One is that we regularly bring our board chief executives together to focus on particular areas of challenge and, where they have taken new approaches, to share that practice. We do the exact same thing with the NHS chairs of the boards. I meet them every six weeks or so; we have the opportunity to focus on key areas where there is good practice or on areas where there are challenges, in order to try to encourage good practice.

We are also making much greater use of the centre for sustainable delivery, which is based at the Golden Jubilee National Hospital special NHS board. The centre was established to look at key areas where there are opportunities for efficiencies and improvement in service delivery. It takes that forward with individual boards and it can model what the impact would be on an individual board if it were to deliver something differently. It can also do specific work with individual boards.

Over the next couple of years, the centre will probably be the key mechanism that we will use to try to get greater consistency, to make sure that we are getting better adoption of good practice where it has been identified, and to bring new ideas to boards.

I will ask Richard McCallum to say more about what we do on finance with the boards.

We are taking forward a range of work to encourage the adoption of good practice where it has been established in one board.

Okay. Through the spending review 2022, we tried to set out an indication of budget for a three-year period. The problem is that we get only an annual budget, so we do not know what next year’s budget will be. The challenge is the way in which the UK fiscal environment operates—it works annually. It is very difficult to give a commitment on what will happen during the next financial year when we do not even know what our budget will be for that year.

However, I agree with you that if we could get into a cycle in which we were able to provide a much clearer indication, during a three-year period, to allow organisations to plan more effectively, that would probably be a much more efficient way to manage services. It would give them certainty. However, the principal challenge that we have is that we have an annual budget, so we do not know what our budget will be the following year, which makes it almost impossible for us to make commitments into the following financial year. I agree with the premise that if we could do that, we should. However, fiscal change at UK level would be required to give us certainty during a three-year period.

Boards have been expected to make recurring savings for some time now, so it is not new to them and they are well practised in it. It is key to ensure that there is a focus on efficiencies in boards. We discuss that with boards regularly, at executive and non-executive level, to ensure that they are looking at expenditure to achieve efficiencies where they can. That is no different during this financial year, and in some cases it is more important than ever, given the very tight financial environment in which we are operating.

Given the level of expenditure that boards have—more than £14 billion of taxpayers’ money—it is important that we apply targets to them to ensure that they are driving efficiencies in the system where they can. That is not money that is lost to the system; it is money that is used in healthcare, but it allows us to ensure that we are getting as much efficiency out of the investment that we are making as possible. It is important that boards are given that challenge.

It is probably fair to say that such co-operation is variable. Some boards jointly commission services on a planned basis where they think that it is in their mutual interest to do so. That is on a voluntary basis—the boards can choose to co-operate in that way if they wish to do so—and there is a mechanism in place that they need to go through if they want to provide backroom functions such as human resources functions on a shared commissioning basis. I am making that approach mandatory. A range of boards probably could do more in relation to sharing some of their backroom functions, and we have already indicated to the boards that they are required to take that approach.

Good morning, convener, and thank you for the invitation to discuss the Scottish budget and what it means for Scotland’s health and social care services. The budget includes funding of more than £19.5 billion for the continued recovery of the national health service—our health and social care system. The budget provides an uplift that exceeds front-line Barnett consequentials. It means that resource funding for health and social care has more than doubled since 2006-07.

Despite that investment, the system is under extreme pressure as a result of the on-going impacts of Covid, Barnett, Brexit and inflation, and United Kingdom Government spending decisions have also resulted in hard choices, as greater efficiencies and savings will need to be made. However, investing in Scotland’s NHS is non-negotiable for this Government. The budget settlement gives our NHS a real-terms uplift in the face of UK Government austerity. Crucially, it includes more than £14.2 billion for our NHS boards, with an additional investment of more than half a billion pounds.

The budget supports investment in excess of £10 billion for the NHS pay bill, rewarding our dedicated and skilled NHS staff for their work in recent years. There is more than £2 billion for social care and integration, which means that, two years ahead of our original target, we are delivering on our programme for government commitment to increase social care spending by 25 per cent over this parliamentary session. It provides an additional £230 million to support delivery of the pay uplift to a minimum of £12 per hour for adult social care workers in the third and private sectors from April 2024, representing a 10.1 per cent increase for all eligible workers.

We continue to invest in quality community health services to support our prevention and early intervention priorities. That includes investment of more than £2.1 billion for primary care and supporting spending in excess of £1.3 billion for mental health.

We will continue to work with partners to address the challenges that the settlement brings and to take forward the reform that is essential for the delivery of a sustainable health and social care system as well as high-quality services. I am happy to respond to any questions that members have.

I have heard that argument a few times, but I do not quite follow it. There are other professional regulatory bodies that cover supplementary groups; for example, in pharmacy, the regulator covers groups other than just pharmacists. I do not follow the argument that, in some way, the GMC taking on the role of regulating PAs and AAs will cause public confusion around the role of the GMC. If you have a complaint to make about a PA, an AA or a doctor, and their responsible regulator is the GMC, you take the complaint to the GMC. I do not follow the argument that, for some peculiar reason, it will become confusing if the GMC regulates two other groups besides doctors, given that other regulatory bodies do that and it does not appear to cause any difficulty for the public when pursuing a complaint or an issue with the relevant regulatory body.

The total budget for social care in 2024-25 is just over £1 billion and, in 2022-23, it was £879.6 million. That is a £200 million-plus increase, which is a reflection of the additional investment that we are putting in to increase pay in social care.

I do not think that I have a figure on what we inherited. I would have to come back to you with that, because that goes back to the 2006-07 budget.

NHS Grampian is taking the project forward. Through NHS Scotland assure, we will provide the health board with as much support and assistance as we can to ensure that it gets these things right and addresses any changes that have to be made. However, I am afraid that there is no additional headroom in the capital budget, given the cut to that budget by the UK Government. That has a direct impact not only on capital projects relating to health, but on capital projects right across the Scottish Government, so any additional costs will have to be met within the overall project budgets.

I am not sure whether we have enough flexibility. That brings me back to the point that Carol Mochan made about the challenge that we face in giving organisations budgets to take programmes forward over the year that then have to be adapted and changed in year when we get information about something coming on to the market. I will have to think about what more we can do to allow some flexibility in that respect.

With regard to vaping, the sector has grown to quite a marked degree—indeed, it has grown exponentially—over the past number of years. It is associated not only with health issues but with environmental consequences, and there is a need for stricter regulation around it. In fact, we are taking forward the joint consultation with the other nations to look at what further restrictions should be put in place. There is no doubt in my mind about the need for proactive action on the part of Government in the preventative space.

I will take away your point about in-year flexibility, but I am conscious of some of the challenges that we face with regard to the way in which we fund organisations if we are looking for them to adapt in the course of a financial year.