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Y Pwyllgor Cyfrifon Cyhoeddus

Public Accounts Committee

16/07/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Adam Price AM
Lee Waters AM
Mike Hedges AM Yn dirprwyo ar ran Rhianon Passmore
Substitute for Rhianon Passmore
Mohammad Asghar AM
Nick Ramsay AM Cadeirydd y Pwyllgor
Committee Chair
Vikki Howells AM

Y rhai eraill a oedd yn bresennol

Others in Attendance

Andrew Griffiths Prif Weithredwr Gwasanaeth Gwybodeg GIG Cymru
Chief Executive, NHS Wales Informatics Service
Dave Thomas Swyddfa Archwilio Cymru
Wales Audit Office
Dr Andrew Goodall Prif Weithredwr GIG Cymru/Cyfarwyddwr Cyffredinol Iechyd a Gwasanaethau Cymdeithasol, Llywodraeth Cymru
NHS Wales Chief Executive/Director General, Health and Social Services, Welsh Government
Frances Duffy Cyfarwyddwr, Grŵp Iechyd a Gwasanaethau Cymdeithasol, Llywodraeth Cymru
Director, Health and Social Services Group, Welsh Government
Huw Vaughan Thomas Archwilydd Cyffredinol Cymru
Auditor General for Wales
Mark Jeffs Swyddfa Archwilio Cymru
Wales Audit Office
Simon Dean Dirprwy Brif Weithredwr GIG Cymru, Llywodraeth Cymru
NHS Wales Deputy Chief Executive, Welsh Government
Steve Elliot Dirprwy Gyfarwyddwr, Grŵp Iechyd a Gwasanaethau Cymdeithasol, Llywodraeth Cymru
Deputy Director, Health and Social Services Group, Welsh Government

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Claire Griffiths Dirprwy Glerc
Deputy Clerk
Fay Bowen Clerc
Clerk
Owen Holzinger Ymchwilydd
Researcher

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 13:45.

The meeting began at 13:45.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

I welcome members of the committee to this afternoon's meeting of the Public Accounts Committee. Headsets are available for translation and sound amplification. Please ensure that phones are on silent, and, in an emergency, follow the ushers. We've received two apologies today, firstly from Rhianon Passmore, and can I welcome Mike Hedges who has, once again, returned to the committee to substitute? And also an apology from Neil Hamilton. Do Members have any interests that they'd like to declare? No. Okay.

2. Papurau i'w nodi
2. Papers to note

We've got a couple of papers to note before we have our first evidence session. First of all, you'll see in your pack a report from the auditor general on 'Speak my language: Overcoming language and communication barriers in public services'. Are we happy to note that report and also to consider passing it on to an appropriate committee? I would suggest either the Health, Social Services and Sport Committee or the Equalities, Local Government and Communities Committee?

Secondly, we've had a letter from the Welsh Government, from Tracey Burke, who has written following the evidence session on 25 June with information on gaps in Welsh Government data collection and further information on the importance of evidence in the measurement of the impact of interventions. Are you happy to note that letter?

Yes, Chair, but I think it is a little out of date. When Tracey Burke came before us, I specifically asked her about the position of Construction Excellence in Wales, to which she twice said that she would take it away and discuss it with colleagues, but there's nothing in the letter about it.

Do you want us to get back to her and ask her to fill that gap?

Tracey Burke has also written following the evidence session on 25 June, on the twenty-first century schools and education programme, with a number of action points. The Welsh Local Government Association have written as well with additional information on the mutual investment model, following their attendance on 11 June. The information in both letters was considered when drafting the letter to the Welsh Government on twenty-first century schools, which we will consider in our additional meeting tomorrow. Happy to note those letters? Okay.

3. Gweithredu Deddf Cyllid y GIG (Cymru) 2014: Sesiwn dystiolaeth 4
3. Implementation of the NHS Finance (Wales) Act 2014: Evidence session 4

Item 3, and welcome to our witnesses. Would you like to first of all give your name and position for the Record of Proceedings?

I'm Andrew Goodall, director general for health and social services, and the NHS Wales chief executive.

Steve Elliot, deputy director of finance for the health and social services gorup.

Simon Dean, deputy chief executive, NHS Wales.

And, Chair, could you accept apologies from Alan Brace, who is our director of resources but was unable to attend today? So, Steve is here representing him.

Good. Thanks for being with us today. This isn't directed at anyone in particular, but we've got a large number of questions to ask you. So, if witnesses and Members could be succinct, or as succinct as possible, that would help me massively as Chair.

The first question is from me. Broadly, before we get into the detail, how concerned are you that, in 2017-18, four health boards again failed to meet the financial duty to break even under the Act, and how does this fit in with the references in your written evidence about the 2017-18 year being a year of stabilisation and improvement?

I'll start with, perhaps, the system and my take on that, and then I'm happy to drop into the individual organisations. I think, in part, from my personal experience of tracking over the last four years, because we've made some deliberate attempts, supported by the three-year planning framework and, obviously, the finance legislation in place to bring more discipline within our overall system—. So, as we've tracked things over the last three or four years or so, one of our concerns has been health boards and trusts embarking at the start of the year with a very high degree of deficits being declared, which we've seen reducing, and I share that not just in respect of 2017-18 but it's also the year ahead of us at this stage. We've seen the need to focus on the balance between recurrent and non-recurrent savings, and, although there were some concerns a couple of years ago on seeing a greater prevalence of non-recurrent savings, certainly in 2017-18 we've seen some recovery of that to a level of recurrent approaches. 

Obviously, we've had some benefit from Welsh Government commitments to allocations that we've been able to see through at this stage. But I think a lot of our system, in terms of the improvements, has been about our level of acceptance about organisations that are struggling with their respective financial positions, and sometimes associated with other performance areas. One thing that we've done over the last two or three years in particular is that if we feel that organisations could have done better on finance, if we have got concerns around them, we do call it out. We do make that visible and we do set our expectations for improvement at this stage. But, certainly, as we're looking to 2018-19—the current financial year that we're in—we are seeing at the starting point a reduced deficit from within the NHS in general terms. We're seeing that our MEG looks as though it is in a better position. We've already been able to declare a couple of earlier decisions, not least in terms of performance funds that have come from within the MEG, which I think shows that we feel that there is more resilience within the system. 

For those individual organisations, we've seen, out of the four that have reported a financial deficit at the end of last year, that two of them actually were able to come within the control totals that we set through last year. Two of them did not do that, but at least we saw some recovery from the worst-case positions that they'd demonstrated to us at this stage.  

13:50

So, on the issue of those controls that have been set, do you think there's a danger, or how would you respond to the accusation that the Welsh Government could almost be legitimising failure by setting those controls to start with? And is that really addressing the problem at root? 

There could be a potential concern about that, but I think the fact that we have moved into the subsequent financial year setting other expectations for ongoing improvement and recovery—. Again, I take some confidence that early in this financial year we have Cardiff and Vale University Local Health Board and Abertawe Bro Morgannwg University Local Health Board both declaring that they feel that they will already be in a better position. I don't think that the control totals are there to accept the underlying position, and that's why we use a lot of our own data intelligence about what organisations can get to and the level of savings that we feel are able to be achieved. But I do think that we need a discipline within the system.

One of my worries, if we weren't declaring the control total, would be an emphasis on organisations calling the wrong kind of decisions that I think would adversely impact on some of the quality and access to services in their own areas. So, it's really important, I think, that we work our way alongside that even if the individual organisations still hold that ultimate accountability. So, I think one of our tests is the extent to which we are able to see other organisations recovering or not, and certainly at the outset of the financial year we're in we are seeing at least three of those organisations giving us more confidence about issues. But I've been particularly pleased with certainly Cardiff and Vale and Abertawe Bro Morgannwg, which are declaring some change. I know you took evidence from them, but we see some underlying resilience from them as a system. 

You didn't mention Hywel Dda Local Health Board then. In the case of Hywel Dda, you didn't make an adjustment. Do you think that that could be storing up bigger problems for that board in the future?

I think there was a one-off big exercise that was necessary for Hywel Dda through last year, which was the zero-based approach that we took to their budget. It was an external commission that we put in place to make sure that we had that external rigour. It would have been artificial, I think, to have landed additional funds for them during the course of 2017-18. What we have done very early on, through an announcement from the Cabinet Secretary, is to put in funding that recognises the level of spend that was outwith the gift of the health board in terms of the analysis around its demographics and its pressures. That means that the residual deficit that they have at this stage is more within the gift of Hywel Dda to deploy, although not all of that will occur within a period of a year. We still see that that will take a little bit of time for them to work through. Partly, as well, it is a sign of confidence in the team at Hywel Dda about a range of areas that they are going at. So, for example, there is a balance in terms of their approach that although finance has been a very dominating issue in the Hywel Dda area, and has been so for some time, actually we have also seen some really good progress being made on delivery, not least on a range of their performance areas. So, they do have a track record that's been building up over the last two years of continuous improvement.  

Just before I bring Lee Waters in, the short-term focus on year-end financial targets has been likened to landing a jumbo jet on a postage stamp. Do you think that the NHS Finances (Wales) Act 2014 addresses the problems that we've seen? 

I think that the need to be able to land a very small surplus on our overall MEG is certainly significant when you're overseeing £7.5 billion-worth of public money. So, I think the analogy of demonstrating how precise you have to be to balance the budgets—. I took, in good heart, during this last year, that there were at least two organisations that were able to break even at the end of last year but had already passed over some potential surpluses to Welsh Government, which I think shows a sign of some organisations being prepared more to overstretch. In the past, those sorts of monies wouldn't necessarily get passed back to the organisations if they achieved a surplus. We actually committed that as a principle this year, so they would be able to actually utilise that in the current financial year.

But, certainly, I think we have moved our focus away from an annual process. We have got a three-year planning framework in place. I think the legislation has allowed us to look forward beyond just an annual period of time. Those organisations that are mature, which have had approved plans, obviously we see their practice developing alongside that. Those organisations that remain in escalation are struggling more so to do it. But, irrespective of that, we have organisations like Cardiff, which has given us a very clear 10-year plan for the future. Our challenge for them is more whether they can give us the clear milestones for what the next three years would look like. So, I don't think we are only chasing the in-year position. I think we are genuinely standing back and using the financial flexibilities to see how the future can be brought forward.

13:55

It's been striking in the last couple of sessions we've had the mixed picture that there is. So, we had Cwm Taf, which was highlighted to us as being good practice. They seem to be well run with good governance, stability of leadership, and then we had ABMU, which, prior to the current leadership taking over, was a bit of a mess, frankly. You have four of the organisations in some kind of escalation. So, what's your reflection on why there is such a mixed picture within the Welsh NHS?

Well, firstly, I think that large organisations can have a financial discipline. I'm pleased to say that, ahead of me coming into my national role that my own organisation was able to discharge that as a health board in my old patch, and we've actually seen that maintained in there. So, I do think that we have good examples from organisations like Cwm Taf and Aneurin Bevan, which have had the same pressures and demands and struggles in both the performance environment or not, but I think there has been a clarity about their approaches. I think we've seen organisations that have changed their response to the way in which they manage finance. So, if I can argue it in this way: to move away from just dealing with it functionally as a budgetary issue to rather being more of an enabler for the organisations. And I would certainly advocate that those organisations that have got control of their finances have actually identified over these last two or three years greater flexibility, more headroom—we give them more discretion on areas like capital—and it allows them to stretch out into other arenas, more into the prevention agenda, for example, and housing.

I do think that leadership is one of the issues, and perhaps if I can just set aside the Hywel Dda experience, which for me has been a long-standing budgetary issue, which is why we wanted to do the zero-based review, but if you look back on the financial positions of organisations over the last four, five years or so, three of those that have got pressures with this at the moment—ABMU, Cardiff and Vale, and Betsi Cadwaladr—were organisations that, in the past, were able to demonstrate that they could manage their financial position in-year, but they all had periods of deterioration that occurred that were very significant and which they are still recovering from. So, that's why I didn't want to have the overnight recovery, as much as that would help our overall budget. We wanted to ensure that there is a better landing place. And, as I said, Cardiff and ABMU more so are in a better position; Betsi Cadwaldr certainly has more challenges in terms of the issues. Everybody will argue their own position in respect of costs or demographic growth or the pressure of technologies. I think what we've tried to steer from a national basis to give some stability is—. When The Health Foundation did its review and advocated the kind of level of inflationary pressure we should acknowledge within the system, we've run with their guidance and advice so that, at the start of every year, all organisations know that they'll be receiving a minimum 2 per cent to mitigate those. 

But leadership within organisations—there are those that have really taken advantage of the new planning and financial flexibilities and those that have struggled, I think, with some of their local circumstances.

Yes, and the evidence would bear that out, but what I'm trying to understand is why there is such a mixed picture of leadership. Because the Welsh Government has a role here—the Cabinet Secretary appoints the chairs to the health boards; you sit on the interview panels for the chief executives. Do you think the balance is right between the central control and discipline and the local autonomy, given the fact that there are four in escalation and, as you say, leadership is a key part of that?

I think that partly, when the parliamentary review was highlighting a recommendation about trying to bring together the executive function, that was probably recognising that, within a tighter system, the extent to which organisations run with their own sovereignty, which remains the basis of our system, needed to be changed. I think what we've been trying to do in the escalation and intervention support is get alongside organisations more and hold them to account and be assured by progress. We do see different examples of that. Irrespective of Hywel Dda's bigger financial pressure that they have within their system, they have demonstrated to us the ability to work through potential plans for their local community, to work on their performance, to demonstrate the ability to make progress on their referral-to-treatment times target, to perform better on cancer targets et cetera. We do spend time as a team sitting alongside these organisations in the escalation meetings. We do make judgments on the progress as well, but certainly we are looking to have leadership that is able to lead both a local organisation and participate in the broader NHS Wales family at the same time.

And yet Betsi Cadwaladr health board is still a bit of a basket case.

I think, with Betsi Cadwaladr, they were an organisation financially that was breaking even four years or so ago, and they had a year where they stripped to an unacceptable position. Part of that did lead to our declaration that they needed to be placed in special measures, albeit that it was alongside other issues as well. We've been looking to stabilise that organisation, to improve its finances and its outlook. I still feel that, looking at its broader allocation, there are still opportunities for them to recover within their gift. I think that they've been slower than other organisations to pick up what I would describe as a 'turnaround methodology' within their organisations. We've seen other organisations like Cwm Taf and Aneurin Bevan generally build that into the way they do things.

14:00

But they've been at the highest level of escalation for some years. In their written evidence to us they list a lot of the problems they face, but very little on what they're actually going to do to them. How much more intervention can there be?

We've introduced the Deloitte's financial governance review. That was to lead to actions rather than just reflections from the team. I do think we've got a responsibility to come alongside them with some areas of capacity and support that they need, and I'm struck that—. For example, at the moment, we're just rehearsing with them some of the levels of operational support, both clinical and management, in their structures, which is there to support their delivery component. That's been a reflection from the structured assessments that are done by WAO, also from the financial governance review, and it's something that has been highlighted as an area where they probably, in terms of their finances, would not be able to find the local funds and the discretion to do that. So, at the moment we are just recommending and developing some proposals for the Cabinet Secretary, but we do think some of that operational structure also needs to be revised, not just what they're doing centrally within the organisation.

I'll do a very broad line. Given the fact the four organisations that are in continued financial duress and financial difficulty are the ones that are actually being helped by the centre in various levels of intervention, doesn't that actually really bring into question the whole model of special measures at whatever level? Is there any evidence that it actually works?

I would argue that, looking back on when we put in these escalation arrangements, these have not been long standing over many years. We've put in these arrangements over the course of the last three years. It was actually on the back of a Public Accounts Committee recommendation, and we have been implementing it within the system. We've had to learn and develop our responses along the way. I do think that if we track through the organisations in terms of some of the performance delivery that's happened, not only on the financial grounds, we've been able to demonstrate that organisations have managed to get there. So, for example, Cardiff—14 consecutive quarters of delivering their referral-to-treatment target; they've been able to demonstrate improvement on their cancer position, so they are typically performing over 90 per cent on their performance, and we are seeing improvement on their finances as well. But the moment is: when can it be declared that an organisation has given us sufficient confidence that, looking forward, they could merit an approved plan? Or when could they be de-escalated on the escalation grounds?

So, the escalation discussion is around a debate beyond just us as Welsh Government. We obviously work with Healthcare Inspectorate Wales and also with the Wales Audit Office on those proposals. There has been an organisation in Wales that has been de-escalated—the Welsh ambulance services trust, which was dealing with very difficult performance issues and concerns around finance. So, I think it's demonstrated at that level that organisations can drop down. At the moment we have ongoing operational discussions with, certainly, two of those in escalation, and I would say that, probably, out of the two, Cardiff feels as though that is maybe the closest to having at least a discussion about an approved plan, and a possibility of being dropped down on escalation. But that won't only be our decision to take. We'll be looking for assessments from other colleagues, whether regulators or auditors, as well. So, I do think we can make progress, but we are only still three years into actually using the escalation frameworks, and obviously there is an intensity of support that is necessary around those individual organisations.

Mike Hedges, briefly, before I bring in Vikki Howells.

If you look at the four, two are health boards that have major regional hospitals—Swansea and ABMU and Cardiff and the Vale, where they've got the Heath and Morriston, which act as regional centres. The other two are made up of a series of hospitals that have very limited interaction, and somebody living on Ynys Môn does not get up in the morning and say, 'I'm going to go to hospital. Shall I go to Wrexham Maelor or shall I go to Ysbyty Gwynedd?' Don't you think there are two problems—(1) that the finances do not take into account the regional hospital performances and provision, and, secondly, don't you think the structure of Hywel Dda and Betsi Cadwaladr not only hasn't worked, but is impossible to work?

I think every organisation advocates its own special and unique reasons why it should have more money. I know that's a reflection around allocations and how we work, and we do try to have a balance between rural population and areas like deprivation, so therefore it's no surprise that an area like Cwm Taf will have the highest funding that comes through on our allocation when we look at some of the local deprivation in that area. I believe that it is possible for large organisations, even with a complexity of both geography and also of the relationships that they have to form, to be managed. Whilst you may not argue it was a geographic issue, in my time in Aneurin Bevan we actually had the complexity of dealing with five local authorities at that stage. 

I think, when we did the zero-based review for Hywel Dda, actually, the balance of the services that existed across the individual sites and whether rural access was one of the issues was one of the areas that was explored in the criteria, and, actually, that wasn't the most significant issue in terms of driving the reasons for its spend, so we have looked at some of its particular pressures, perhaps more uniquely, about its demographic spread—so, a higher proportion of the older population in that area. But the zero-based review, actually, indicated a number of areas that were still there to be reflected on within the Hywel Dda area. Clearly, there is some cost associated with some of the balance of services that are available, but there were certainly operational efficiencies to still be developed and responded to within that area.

So, I start from the perspective of not least giving my personal experience, but also with my oversight of Wales, that organisations, even of complexity and of size, can still be managed and can manage within resources and can still deliver on their performance. I think there are some outstanding issues in the way in which, perhaps, they need to connect with their communities. Some of the operational support that we're reflecting for Betsi Cadwaladr at the moment is probably something to do with the balance of how those sites are organised and the extent to which that is overseen by the board, and that's probably why we will have some sympathy for some of those emerging proposals. But I speak in part from my personal experience, given the organisation that I was running before. 

14:05

But with a complexity around relationships that needed to be in hand and with the same demands and challenges and pressures that were ahead of it. And, hopefully, as you were rehearsing some of the general choices that organisations were making when you had the Cwm Taf evidence—there is something about making sure that we know the pattern of why individual organisations developing good practice are doing better and transforming. And one of the things that I would say with Cwm Taf's experience, perhaps, rather than my own in my previous organisation, is they had moved from just budgets and functions into discussions around services, which, I think, has allowed them a high level of recurrent savings to be available, and then that leads to much great flexibility, and, I think, for other areas, there may be some outstanding areas of service improvement and efficiencies—

As I said earlier on, we've quite a tight schedule: we do need to make some progress. I look to Vikki Howells for that progress. 

Thank you, Chair. The Welsh Government's resource allocation review clearly has the potential to really change the funding landscape. When do you anticipate that it will be completed? Would it be, perhaps, in time for the 2019-20 allocation round?

Perhaps, if I start, then I could bring Steve on a more technical basis in terms of the responses there. So, we've completed phase 1 of allocations and have been trying to apply different approaches to our funding allocation, certainly for growth funding over the course of the last couple of years. So, that allows us to make sure that we aren't just looking at pure population; we're allowing some of the local circumstances to emerge. But, as I said earlier, one of the tricks with how we look at allocations is, if we go to a full change of all of the allocation, we could end up destabilising, actually, some of the financial progress that we've made with a number of the organisations and six out of 10, actually, were able to demonstrate that they could break even.

So, whatever steps we take next, it's really important to make sure that we don't throw all of the cards up in the air on this. Nevertheless, there are still some outstanding issues as part of phase 2 that we need to work on. I do think that the zero-based review commission for Hywel Dda has helped us a little bit. It's given us a structure and a framework to use. We are actually exploring some of the good practice that is around in terms of how other countries have approached this, so particularly taking account of, yes, within the English system, but what Scotland are doing and, certainly, in the international sphere, some helpful insight into what New Zealand have been planning at this stage, and we do think that we could work it through.

I think it will be a tall order for us to be looking to apply it for the 2019-20 financial year. I think that would be early if we could get there, but we'll certainly see how we can develop that, because we do have opportunities for any growth funding coming in the system to be applied through new guidance and allocations. But I am genuinely concerned that every organisation will determine that it's got its own issues—so, for Hywel Dda, maybe more rurality; Cardiff will describe about specialist services; Cwm Taf will talk about the deprivation prevalent within its community—and we have to stand back and have an oversight of all of those different aspects and still pull something that can deliver our financial agenda. But it just may be worth a couple points, Steve, just on the technical aspects of the allocation. 

Yes. The current formula we're using is the Townsend formula. It was developed back in the early 2000s, and that took about a year to develop. It was quite unique in the sense that it used direct needs data from the Welsh health survey and other sources to determine how we should distribute funding. That isn't used by other countries; they tend to use more indirect indicators of need. So, we need to go around that loop again, I think, and check whether more indicators, such as demographics, deprivation, et cetera, would be more appropriate as a basis for distribution than the current needs-based distribution that the current formula is based on. So, that will take a bit of time. We are going to establish a piece of work that the chief medical officer and Alan Brace will be jointly leading. I think the ambition was to get there for 2019-20, but I think the reality is that, probably, that will be for the following year.

14:10

We do think that perhaps some areas like—. We've been using the Welsh health survey. Perhaps the data sources that we need to draw in at this stage probably need to be stronger in their basis rather than just only working with some of the more subjective assessment that comes through the survey. But, again, that will be part of the process that we go through.

Yes, certainly, and, in fact, my next question was going to be about the data that you're going to use for this, because, obviously, with so many aspects that you're trying to cover to make a holistic assessment, and with so many health boards with different areas that they feel make them special and unique for requiring more funding, clearly the quality of the data underpinning the decisions is key to ensure that the decisions taken are seen as fair. But we have taken some evidence here of health boards who are concerned about the quality of that data. So, has the Welsh Government identified appropriate datasets to you, and how often is it envisaged that this new formula will be updated?

Well, I think that's the piece of work we need to do now. I think we need to be able to rely on data sources that are more regularly updated, and more widely available, such as demographic data, but that would be for the technical piece of work to do.

And we do need to work through some of the implications. We may have individual health boards talking about population growth as one of their most significant issues. Population growth, from our assessments, is something that will be happening across the whole of Wales. In some areas, we'll see an expansion of that around older people, not least as people are living longer, and we'll be looking to balance that. Other areas will be just more inward migration, certainly of younger people. So, if we look at Cardiff, for example, typically some of the population growth is likely to be in a much younger category than perhaps some of the areas in Hywel Dda Local Health Board that we would see in terms of people choosing to move to that area in terms of retirement. So, we just need to judge those issues. But we also need to throw in some robust options on the funding. Where I would have some sympathy in terms of getting alongside Cardiff, as an organisation—and you've highlighted this already in terms of some of the regional services; there are inherently some costs that will be associated with that higher level of provision when it's being done for a much broader population. I would hope that, somehow, within any future funding allocations, we can at least try and find a way of handling that better. At the moment, it's very reliant on discussions that happen around the Welsh Health Specialised Services Committee, but I do think the formula actually may allow us to at least recognise those for some of those more tertiary-based organisations.

And, once these changes to allocations have been worked through, clearly there may be some health boards who receive a fall in their allocation. How would that be managed in order to ensure that health boards can maintain their financial and operational stability?

It may just be worth talking through how we've handled this in the past with organisations, but certainly it's why, as we did some of the last adjustments, we applied it to the growth in funding, rather than lifted up the whole of the historical budgets that were in place, because that would potentially destabilise the system. I think we also need to bring a bit of a practical perspective to the way in which we assess and analyse these things. So, if, for example, we change the formula and two health boards that had a very strong track record of delivering their finances were suddenly placed in a very different position, at a very pragmatic level we'd need to ask ourselves the question as to whether that felt right in terms of the balance of services that are there. But when we've done the previous adjustments, Steve, some of the approaches that we've taken to neutralise some of the impact—it may be worth people knowing.

Yes. Certainly, when we were implementing the Townsend formula, back in the 2000s, we used differential growth. So, areas that were under target would get slightly more growth funding than areas that were over target. So, no-one lost money from their baseline, but there was just a differential application of new money to try and move organisations closer to their target position.

Sorry, just one other point to pick up, which goes back to Mr Hedges's point, is that there's also an ambition to try and develop a formula that will work below a health board level—whether it's at cluster level or a slightly higher locality basis—so that you can identify distributions within health board boundaries as well as between health boards.

Yes, certainly, and, with the rationalisation of services, cross-boundary funding flows can be a sticky issue as well. So, is there a plan to review that to ensure that cross-boundary funding flows are consistent and fair across health boards?

Well, we've tried—just by adopting a planned system approach over these last number of years—to avoid some of the over-contact that's happened amongst health boards: this ability for a health board to stand back and not being interacting with others, so that you sit there as a board in charge of a health board area and you have to call your own decisions. Hopefully, we've suppressed some of that. It's inevitable that we still have organisations planning and contracting services around how they may want to access services—in Powys, for example, from the University Hospital of Wales in terms of tertiary services. But I do think we need to be mindful of not creating too complicated a system across individual health board areas and, yes, we have some responsibilities for overseeing that financial framework.

14:15

Okay, one final question from me, then, Chair. The transfer of the population of Bridgend from Abertawe Bro Morgannwg University Local Health Board to Cwm Taf Local Health Board is likely to pose significant operational and financial challenges for both health boards and, obviously, prior to the completion of the funding review as well. So, how will you make sure that neither health board loses out financially as a result of that?

So, this is a more unique set of changes. In the past, we've tended to aggregate up individual organisations and vice versa in terms of the way in which organisational structures change. So, this will be the first time that we are dealing with something quite different in terms of a large part of an individual organisation transferring across. I think in respect of the early assessments that have been done between Cwm Taf and ABMU, that's probably around a quarter of ABMU's resources that will be moving across. I think, as a matter of principle, we've asked both organisations to go in to constructively work together. This has been on the back of a consultation. It makes some sense in terms of where future public services may well be orientated in terms of the social care balance, for example, and we understand that, but our starting point is to make sure that neither organisation feels that it will lose out at this stage. 

The complexity, however, is that this isn't just dealing with Bridgend as a locality and area and all of the staffing in it. Obviously, ABMU has a whole series of corporate departments, structures and overheads in place, and it's not going to be possible to necessarily separate out the third of a person that would not, for example, transfer on those. 

I think there's also a danger that people will worry about all services changing overnight. That is absolutely not the case from this. This is an administrative oversight and change, and any future change that could happen as part of normal business around services would be something that would need to be consulted upon. But, certainly we've advocated that there should be a neutral impact, so I would worry either way if Cwm Taf, as a well-delivering organisation on finance, ended up suddenly having a problem financially in the first year that it receives these services; that would be a worry. If ABMU, in terms of an organisation now recovering and improving on some of its financial position, ended up taking 10 steps back, I think that would be a problem. But we've also allocated some provisional funding that will allow them manage this as a very specific project, and we felt that that shouldn't be something that was owned only by the organisations. We felt that there should be a level of central support that was provided for that, because this is quite a large task that they're embarked upon.

Thank you. One of the issues you've identified is the issue of identifying potential savings, where they're not just one-off savings or savings that occur year on year. Still health boards, about a third of their savings are—sorry, only about a third are non-recurrent; the rest are one-off savings, which has been picked up by a number of the bodies. What are you doing to make sure that the savings being made are more strategic, and not just looking for low-hanging fruit? 

One of the first areas that I would outline is that there's sometimes a danger when we're looking at our savings programme each year to believe that these are the same savings each year just re-occurring, and a discipline around them. Obviously, these are cumulative savings that are taking place within the NHS environment year on year. So, a new set of savings in a year to be achieved from an individual organisations is on top of the savings that they delivered last year, and a test for me about the maturity of an organisation and the progress that it's making is its balance of recurrent to non-recurrent savings. 

The worry three years or so ago was we'd seen some reduction on that. I think we'd gone down to as much as only 60 per cent of savings being seen to be recurring. There has been some improvement on that in 2017-18 where it was somewhere around 71 per cent, so at least there was some reduction over this last couple of years. Prospectively looking into 2018-19, the current financial year we're in, it does look as though, on the basis of the savings being highlighted at the moment, that there should be a higher degree of recurrent savings, and that's why probably my view is that I do think we've got a stabilised and improving system in financial terms, because the higher the level of savings, the more confidence that you can get in terms of what's delivering. 

I do think we need to help organisations with where they can save, though—the variety of mechanisms for doing that. We obviously get intelligence and insight from how we're handling individual organisations—those that are in escalation and those are outside. There are opportunities to share some of the assessments that have been done through the financial monitoring. We've introduced an efficiency framework also, which we'd overseen on the value board that I chair, which also has provided some opportunity to drive a different level of services across organisations. So, best practice, if you like, on functional budgetary areas, but increasingly trying to be more transformative. I think, looking forward in this current financial year, if we were the first time over 80 per cent in terms of the balance of recurrent funding, I think that would be a really good platform for our subsequent two or three years.

14:20

Looking at the potential for system change to achieve savings—I don't want to stray into the next session we're going to be having on NWIS—the potential to use digital and particularly automation and artificial intelligence to transform the way we do back-office functions, it doesn't seem to be on the radar of thinking at all.

If we look back over the last two or three years, that would have been a limited area with probably two or three of the organisations starting to break through in a different way. I've seen proposals coming through, for example, about electronic patient flow, which is people wanting to simply understand the patients who are in their system at any one time immediately, to underpin clinical decision making and to make progress. I think the prospective opportunities on AI are enormous. We haven't quite pinned down all of those at this stage.

I do think there has been a danger—again, without encroaching on the next session—for digital to be seen as the ICT budget, when increasingly I think we need to approach it as a general approach to savings, but certainly underpinning service and clinical practice transformation. So, if we're looking forward over the next two or three years, and I think this was enhanced by the parliamentary review recommendations, this is absolutely where things should be going, alongside of course changes to service models, but we do need to make sure that digital is enabled in a very different way, looking forward from where we've been over recent years.

I think there are two triggers, explicitly, at this stage. One is around the parliamentary review, a rather salutary presentation of where we were at that stage, but it really outlined the opportunities. Secondly, in terms of landing it, the commitment under 'A Healthier Wales' to make sure that we'll go for the digital aspects, but it will require us to think differently in respect to some of the funding arrangements that we have in place.

So, as an example, we did an assessment, and I tried to oversee this in an open way across the system, that said, 'Don't tell me what you can do with the budgets that you feel you've already got locked down, but tell us what is possible if you were thinking more broadly about the type of opportunities that could be discharged through a digital approach.' We had two very large figures, therefore, from the service when we added these things up: a request for around £180 million-worth in capital funds, and then an assessment that probably we needed to drive with about £280 million-worth of additional revenue on the digital side. So, that shows the scale of the challenge. Some of that I don't feel has been fully costed but, if you like, as broad principles, they've at least moved the discussion on about the budget that we had to spend, but what would we genuinely need to transform.

Over the last couple of years, retrospectively, we've tried to address some of that. We were able to put in about £40 million extra capital over the last two years, including 2017-18, which is part of this session, and prospectively there's probably around £80 million that we've now allocated over the course of the next three years, which will help us on that capital agenda as well. But, I think whilst we need to make money available, I think the biggest set of recommendations that we're going to have to make to the Cabinet Secretary over the course of the next two to three years will be what additional funding we can draw into the digital arena. As long as we can go in thinking that this is about clinical practice and service transformation and that kind of methodology, I think we will be able to make progress with both allocations and the development of funds, like the transformation fund, for example. 

Going back to some of the issues we discussed earlier about the structure, it does strike me that the atomised way that NHS Wales is run may impede this. NHS Wales central services—sorry, I've had a mental blank, what are they called? 

Shared services.

Shared services, thank you very much. NHS shared services seem to me to have great potential to release far more savings, but because of the way they are reliant on being commissioned, essentially, they're not always being given the opportunity to do that. I've quoted before the example of using digital services to speed up the recruitment of nurses, which NHS shared services has identified multiple millions of pounds of potential savings from, but the system seems to be frustrating those kinds of savings being identified and driven through.

In the last 12 months—. Two things on that. On the one hand, the governance oversight of shared services as a sub-committee of the health boards and trusts for them to manoeuvre, albeit that it's hosted within Velindre, there is a matter there for the governance being discharged across the NHS and within structures. Secondly, I would say that this would be an area that we look at it terms of the plan, 'A Healthier Wales', the response to the parliamentary review on executive function and how we see some of these national areas. But, over the last 12 months, and certainly with some of the shared service opportunities, as I've been chairing the efficiency and value board, there has been an opportunity to draw out some of these potential areas within shared services, so that we start to articulate these much more strongly about consistency for the whole of Wales and acting to commission some of those ourselves. So, as an example, at my next value and efficiency board meeting, there is a scoping paper that has been done by shared services that highlights a number of areas that they think could be delivered as matters of improvement that could have some savings and financial consequences. And rather than leave it only to the committee structures, I've determined that I want to take that through the efficiency and value board, hopefully to fast track some of those areas, and maybe some of them are more invest-to-save mechanisms where Welsh Government can, actually, step in to support them as well. So, that's deliberately to support, but also to co-ordinate differently within the system.

14:25

Is invest-to-save the right vehicle to use to do this? Because, you need to have a fairly—. Because you have to repay that money, don't you, as I understand it? And health boards are often reluctant to do that when there's some risk that the savings might not be achieved.

It's one part of the choices there. So, I wouldn't want you to feel that I was articulating that as the only source of funding. The transformation fund concept that we've put in place is, actually, double-running, pump-priming transition funding that wouldn't necessarily be repayable by organisations. So, we are trying to adopt some different methodologies on here. And they've been very helpful. So, shared services, both through the head of procurement and also through the managing director for shared services, do sit around the value and efficiency board and they add value themselves around that.

So, you're going to drive that more—[Inaudible.] 

I think where we've tried to be pushing things over the last 12 months, it's with a greater need for central co-ordination and also the emerging development of the executive function that we need to discharge over the next 12 to 15 months.

I'll be driving that more, yes.

And the example I quoted about nurse recruitment. Is that part of the work that you're going to be doing?

Yes, we'll do that. Actually, shared services did a lot of work supporting health boards around the recruitment timetables that were in place. And there was some residual work that, even as I was a health board chief executive, they'd responded really well to, to collapse down these areas. But I agree with you: there is more to go at on these areas. This should be down into matters of days now—it does not need to be extending to matters of weeks. And we can do better on that, and digital is part of that solution.

In terms of the letter that you've sent to the committee about areas that the governance reviews have picked up of potential for savings, performance management—we touched on this a little bit last week with Tracy Myhill—this tends to get lost in the big-picture look at this. How confident are you that your performance management systems are robust enough to be able to really, truly, make sure you're getting the most out of people?

We have to track performance management right through a whole system. So, one of my personal tests, if I can put it in that way, is the extent to which you can track individual performance management happening from front-line staff, those with responsibility for services and departments, up through the organisation and then to the oversight that we deploy from a Welsh Government perspective.

I think we've been much clearer about the set of objectives to be pursued and mechanisms in place there, which includes the challenge and responsibility from the Cabinet Secretary to chairs on areas of expectation. I think our mid-year and end-of-year review processes, which is where we cover off all organisations, are mechanisms for us to discharge this. We have quality and delivery meetings that are in place which we oversee. And certainly, for those organisations in escalation, we are having to really step into a level of detail around some of the performance and outcomes. And we have seen some response from some of those. At the same time, we've tried to make sure that there is, perhaps, some understanding of some of the pressures that people are under. So, when we got to the end of this year in respect of waiting times, for example, we're actually able to report for the NHS Wales system that, for referral to treatment times, it was the lowest position for four years; for diagnostics, it was actually the lowest position since 2009—

—so we do need to track it at a high level, but it does need to work through to individuals.

I'm not asking you about the high level. What I'm trying to understand is at the more mundane levels. So, for example, when you take a new member of staff on, is it still the case there's no probation period? 

For NHS Wales. A new member of staff joins NHS Wales—do they have a probation period?

There won't be a probationary period naturally in place. That's part of the local employment for those organisations.

Right, well, that's very unusual, isn't it, in most organisations, not to have a probation period?

It's not unusual from an NHS perspective in terms of securing candidates to come in. Obviously, people's performance, as they go through the year, is subject to review, and there are mechanisms in place to do that, which include the end-of-year review at this stage.

So, you're taking somebody on without a probationary period. So, if there are issues within their first three months, you don't, really, have the tools to properly address that. As I understand it, as in keeping with much of the public sector, if you're going to try and manage somebody out of an organisation, you're talking at least a two-year process. 

Yes, performance management processes can be difficult to get into. So, the NHS, openly, will work with an assumption that, through a process that's in place, we are appointing the right kind of candidates. I'm not speaking personally now, but through the organisations themselves. There will be a balancing factor for me to think about if we were to pursue those arenas, which is actually the attraction of candidates in the first place for roles. And, obviously, we've seen individuals who've moved, actually, across countries, internationally so, let alone across individual organisations and across individual boundaries within the Welsh context.

Given the financial pressures you're under and we've been discussing, and then looking at all options for improving performance, it does seem to me, at a quite basic level, that there is an issue around performance management in not having probationary periods to review, if you've got the right candidate, having recruited them. Because, as we all know, as people who have employed people, it doesn't always work out as you'd like it to. And then to address underperformance, you've got such a bureaucratic process that many managers simply don't have the energy to pursue it. So, the system is then carrying dead wood, and your dashboard is not going to be picking that up.

14:30

We do have mechanisms in place for individual performance reviews that are discharged. We obviously oversee that at the system level rather than in the individual organisations. There are policies that are in place that are under agreement between employers and unions in respect of changes that are made, so they are a negotiating aspect in terms of moving terms and conditions from the previous world to whatever's new, and—

So, are you satisfied you've got this right at the minute?

I think the tradition that we have does not necessarily include the probationary periods, but I'm very happy to take that away to reflect on from an NHS Wales perspective, in terms of whether that could be some additional opportunity for us within the system.

And the whole performance management review—whether or not that supports managers enough to be able to deal with underperformance.

Indeed. I can reflect on that for you at the same time.

You mentioned the service transformation fund, Lee Waters mentioned invest-to-save, and we have innovate-to-save as well, its sister project, which possibly embodies a greater appetite for risk and failure as part of the innovation process. Overall, at a global level, how much do you think the NHS in Wales is investing in broadly what could be termed as innovating or service transformation, or whatever the language—essentially, not investing in delivering as of today, but actually trying to move towards a different model in the future?

I think we've got a system that is caught between those organisations that have been able to demonstrate their financial maturity and the ability to manage within the budget, and those that are still struggling, even whilst there is some improvement happening. So, we need to see a pattern, within those organisations that have been able to demonstrate their ability to land their financial position, to be more lateral thinking, and to perhaps be less risk averse in some of the choices that they're going to make about some of the funding avenues. Perhaps their approach to service transformation, as well, is actually of a higher level of potential. So, again, it's no surprise that, perhaps, Cwm Taf and Aneurin Bevan have been talking through some quite large system changes, which they have actually been directly implementing over the course of the last four or five years. I think we need to find more discretion for organisations to do better in this area. The more we can help land individual organisations doing better within their own system, the more flexibility we actually have within the general MEG, which is overseen by Ministers, to actually deploy it. I think we've stepped in with some examples. So, the technologies fund that we've pursued previously, we found a way of pump-priming through that. Certainly, the transformation fund, from a service model perspective, is a wish to be more innovative in our approach. So, although we have a worry that a £50 million a year commitment for the next two years is not going to be the answer to everything in Wales, it at least gives a level of pump-priming and transition, and I would actually hope that, over time, with some flexibility within our system and some resilience, those funds perhaps have the potential to be grown in terms of their offer to transformation.

I'm just wondering—. I know that time is brief. If there is no answer to this question, then that's also in itself interesting. Have you, at the very, very broadest level—? I mean, private sector companies and organisations have a benchmark level of investment in innovation in order to bring forward the next wave of products et cetera. Obviously, the context is very, very different in the public sector, but have you benchmarked yourselves against other public service systems that have achieved a systemic change? What proportion of your current budget, based on that kind of review, needs to go into innovation, and how close are we?

I don't think we're able to provide that information at this stage. We would have examples of how we're trying to innovate, but that's been within the constraints of the overall budget and funding that we've had to date. I think, looking forward, we have an opportunity to do that, and I think both the plan, 'A Healthier Wales', and the parliamentary review, have probably helped us to do that. I think, however, that's a useful exercise for us to go through, just about landing those areas. And certainly, for the successful organisations, their description of the balance between what they're investing in turnaround, as opposed to what they're investing in transformation—we have got one or two organisations able to show the shift that they've been through over the last three or four years—I think that would be a good methodology for us to utilise, and perhaps if I can reflect on how we could do more with that.

14:35

I'd appreciate that. I'd be very interested to follow that up. I'll turn to more immediate matters, and the three-year plan aspiration. The four escalated health boards have not been in a position to develop approvable three-year plans. What do you see as the main barriers to them? What's the reason for that? 

I think they all have different issues, but it tends to bring a range of different perspectives together. So, certainly, the trigger for an organisation being at a high level of escalation is not finance on its own. But, as we look at the four organisations currently in a high level, finance is a factor, and I think they can be driven from both individual concerns about services—we know in Betsi Cadwaladr that some of the triggers around mental health services and maternity were a factor there—and performance worries and the ability to give us a sense of a future plan for the way in which they will both perform and deliver. Simon, I just wondered whether you'd want to reflect from your oversight of the system. 

For me, the key is that organisations need to have an ambition for the future so they can describe where they are trying to go in service terms. We focus on money; the financial position is an expression of something and it's an expression of service challenges, workforce challenges or other difficulties. So, the key for me is for the organisations to be able to set out the road map of where they want to get to, know what they need to do on that journey, and then the financial position either makes that harder to do easier to achieve. 

I think you've anticipated my next question. Whether or not you're in a position to approve a three-year plan, it certainly would be beneficial for them to produce a three-year road map or whatever towards break-even and financial sustainability, yes? 

Yes. So, if you take Cardiff as an example, they've got a 10-year strategic vision and they've got immediate actions they're taking, which, as Dr Goodall has said, are improving performance. What they lack at the moment is the bridge between the present and that longer-term vision. Because we know we need to get alongside them with, for example, provision of capital, because they will need to invest in capital. We want to understand the sort of decisions that we need to sit alongside them on that. It links in to the transformation agenda and the innovation agenda. I would argue that innovation goes on at many, many levels throughout the NHS, whether that's from individual practice, through team, through unit, to organisation. So, the organisations that have approved plans can show us where they're trying to go in the long term, they can show us the milestones on the way and we can then have confidence that they are addressing the challenges and taking advantage of the opportunities that they face. 

Just before we do that, did you have a very quick supplementary on that, Mike?  

A very quick question. I would have thought, following what Adam Price said about the private sector—. We know, whatever way round it is, that in Anglesey and Wrexham, a child is twice as likely to have their tonsils removed in one of them than the other. Why don't we have anyone looking at outriders on these sorts of things? As you also know, the auditor general, several years ago, produced a report identifying health interventions that either did no good or did harm. That's very interesting, and I'm sure it's propping up a number of tables somewhere and gathering dust, but nothing seems to have happened to either of those. We keep on saying, 'Keep on giving more money to health.' I'll just finish on the last point: we know that slightly raised blood pressure is not a problem. There's no evidence to show it reduces life expectancy nor does it lead to anything at all if it's slightly raised, but we still treat it. We still give people millions of pounds' worth of tablets to treat it even though not treating it would do no harm. 

I think there's absolutely something in that, and actually it gives me a chance to say that, although not contained in the evidence base about what we've got, we've absolutely been going at those areas. Our prudent healthcare principle is absolutely grounded out in this. Actually, we've seen a reduction in the procedures of limited effectiveness, which is the exercise that you spoke about, and they have reduced over the last four years we've been progressing this. Some of that has been taken up by prudent healthcare. Actually, on the analysis of the variation that exists across individual areas, as well as health boards, we've got some good intelligence and information about that. So, through our financial delivery unit we've actually got both a methodology and also a toolkit that is available and that we've built on. It's our efficiency framework, and that outlines a lot of analysis of the variations across the whole of Wales to challenge people on areas that they could improve.

Also, as I was saying earlier, the value and efficiency group has allowed me to step in with some oversight of the system. We have genuinely looked at variation across Wales on areas like biosimilars, for example, and the use of particular drugs that could be changed. We've actually seen the ability to deliver around £8 million-worth of savings on the back of those, which were not being necessarily taken forward by the individual organisations. Because we did exactly what you said: we looked at the outliers and we asked them questions about it. So, I think there's a whole series of opportunities there, but what we will be expecting, I think, with the efficiency framework, is to do more about it, not just as a helpful tool for local analysis, but rather it helps us to direct more of our expectations for NHS Wales. So, your point is absolutely sound, and I'd like to reassure you that we have ingrained that over the course of the last two or three years, not least, I recall, in previous Public Accounts Committee evidence, of course. 

14:40

Thank you. That was an interesting and thought-provoking diversion, but does it suggest that, actually, there are different models of learning as well? I mean, the escalation model comes a little bit with the baggage of top-down or from-the-centre-out, as it were, whereas what you seem to be describing there, potentially, is kind of peer-to-peer learning, taking the best, and actually each health board will probably have—and indeed you even have within-hospital variance, don't you? So, there will be individual departments that actually are really at the higher end of innovation and effectiveness. So, there's a different model of efficiency and innovation that you seem to be hinting at. 

I think we're not trying to put everything through one methodology. We've been really mindful that the escalation approach could simply be a top-down technical exercise, not listening to some of the underlying pressures and demands. I think that there are times when we have to act with expectation, and I think there are times when we have to act alongside and support organisations. The value and efficiency board that I chair has probably started more on the identification type, to promote the things that could really help organisations to take away. I think some of that does need to be twisted to have some expectations set on some of the areas. And prudent healthcare as a philosophy, which we've tried to make about being as relevant to front-line staff as it is to individual boards, has been growing more about the principle and the culture that we approach on these areas rather than just being seen to be some kind of imposed top-down exercise. So, I agree with your point that we need to find different ways of blending all of these things. Sometimes they will suit the individual organisational culture. However, at the same time, some organisations will need a little bit of a push in terms of some of our expectations.

Just very quickly, otherwise the Chair will start to glare at me—and it's my first day back, as well—in terms of what some of the health boards say in their defence, it would be interesting to have your reaction to those. It would be easier for them if they received the planning guidance earlier in the year—would you accept that as relevant, and possible?

If I start, but Simon may want to finish in terms of oversight. So, for the year in question, I would say that they probably have the clearest set of guidance out at this stage in the sense that we gave 'A Healthier Wales' out in June, which gives them a really early start rather than waiting for any technical guidance to follow. It's going to outline some of our broad expectations. I think we've made the exercise earlier and earlier each year. I think, mostly, there are just changes at the edges with the guidance that happens, so most organisations are going to really know 99 per cent of what they need to get on with anyway.

Yes. I think I'd make two points. I think that there is sometimes an unfortunate distinction between writing a plan and doing planning. They're not quite the same thing. The important thing is doing the planning, shaping the future of the organisation, setting out a map forward and at another point in time writing down what you're going to do. That's the function of the plan. So, the purpose of the integrated medium-term plan is not to write a document. It's to take a snapshot at a point in time of where the organisation is on its own journey.

If I reviewed the planning framework over the last two or three years, I would find, as Dr Goodall says, 99 per cent consistency. So, if I look at last year's framework compared to the year before, the differences are degrees of emphasis. So, in the framework last year, we emphasised regional planning more strongly than we had done the previous year, but the messages about priorities, access, quality, unscheduled care, access to treatment, mental health, workforce, money—they are the same, because they all exist within the policy framework for NHS Wales, which hasn't actually changed. So, it is about degrees of emphasis. So, I understand the comment, but I don't subscribe to the view that, until one has the planning guidance, one can't do planning. I simply don't accept that, having been both a person who produces the guidance and, at other times in my career, the person who leads planning for organisations.

That's a straw man argument, or whatever. What about the other argument that they don't have certainty about future funding allocations, so how can they plan when they don't have that kind of certainty from the centre? What would you say to that?

14:45

There are some limitations, of course, because we have to work within the general approach to Welsh Government approaching its budget and signing things off. At least, over this last couple of years, we've had a prospective budget that's taken us through to 2019-20; so, that's given us some level of broader certainty about some of the expectations for what budgets should look like. I think we have tried to change over the last couple of years—decisions that maybe were stalled to the last quarter, to bring them forward an awful lot. I think the latest evidence of that was the Cabinet Secretary announcing a performance fund to be made available. That allowed us to focus our time on waiting times across Wales much earlier in this financial year, but most of the allocations are actually outwith organisations pretty early on these days. So, I would accept that analysis maybe as a reflection of where we were three years or so ago, but we've really tried to get as much out of there as possible. Inevitably, there will be some sources of funding that we retain centrally, where we're looking for some oversight or delivery of a very specific issue, and, again, we've tried to minimise that level of funding that's available. But I do think we've genuinely changed the system over the last two to three years.

Finally, can we turn to the Welsh Government's rejection of the suggestion that the bodies in question should receive additional guidance, essentially, on how to get to a break-even position? I find this a little bit curious, really, because, through the escalation, you're there, effectively consulting, advising them, but then the one big elephant in the room, which is how they get out of the financial hole, you say that they don't need additional guidance from you. But we're still stuck.

I think, in part, you've probably captured our views by what you've described there. So, firstly, the guidance is there, and also, when we had the first year of reporting happening, we had put in place guidance, and we had agreed that, alongside colleagues, to be out in the system. So, we think that there is guidance that exists that is clear, but I think our practical assessment of this is that a lot of the need to clarify or interpret can be based on the individual circumstances of organisations as well as broader principles. Often it's within the context of the escalation meetings that we're having to help organisations understand what the ask is. So, from a perspective of what organisations and how they need to approach the deficits that they've accrued, the guidance is very clear that those are expected at this stage to be paid back, that they need to have an assessment about what that would look like within an organisation, and have to have mechanisms in which we clarify. I think that fits with some of the three-year planning approach, because it allows us to to look to how it's spread. In practical terms, though, which is what we're covering off in the escalation meetings, my worry is that, just at the point when an organisation demonstrates some financial stability and it's living within its monthly or annual budget, to end up pushing an organisation too far so that it potentially feels compromised, is a decision that we need to try to take in the round. These are judgments that would need to be taken by the Cabinet Secretary. But the principles are clear because they were laid out within the original legislation.

If I can just paraphrase, so, formal guidance—you don't see that that would be particularly helpful in terms of, I don't know, a written document et cetera, but you provide informal advice through the escalation meetings, and you interpret, effectively, into the specific context what the formal guidance is. Does that actually provide them with a trajectory, or a broad sense of the direction of travel that they need to go along? Whether it's formal or informal, I think, is by the by.

Firstly, the guidance does exist, so we're not denying guidance. We're just saying that, from our perspective, the guidance is there to be used, but certainly it's clear that organisations have to take a perspective look at the way in which they feel that, as a system, they could look to pay back their finances. Now, we would want to have confidence, certainly, based on in-year financial positions, that organisations were able to do so at this time, but organisations laying out a three-year plan have to set out their mechanisms for discharging that within the plan, not least for its approval.

The key, first, for the organisation is to know how it's going to get to get to a break-even position. Dealing with an overspend, at its simplest, is simple: you simply close things, you shut things, you stop doing things. And that would bring with it implications that are obviously very significant. So, we need to have an eye to that in making the right decisions. It's the same premise as the control total debate. If we set the bar so high for an individual organisation, we may get some decisions that we would all regret.

So, is your worry—? I'm just trying to understand why you are reluctant to give additional guidance. Is it because that that additional guidance then would supplant the original guidance, and, what, that would have some unintended effects, or that would remove the responsibility from—? I mean, I'm just trying to understand—.

Well, for the first year of the reporting on the cumulative position we had to issue the guidance anyway, so didn't feel the need, as a mechanism, to refresh it or change it. I think, certainly learning from the experience of applying the guidance and making sure that things are clear cut, one of the first tests for us is: can we actually move one of those organisations that are questioned here, and it's one of the four organisations that are in a high-level escalation—? At the point where they feel that they can drop down to demonstrate the performance that I and Simon have outlined—that's the moment, I think, to see whether the guidance helps us in an explicit enough form.

14:50

Just to go back to where I started, Innovate to Save—I should declare an interest, because I was involved in Nesta at the time these ideas were initially promoted—it's seen as a bit of a model, actually, internationally now. But I think it's in its second wave—£5 million, et cetera. Shouldn't we be expanding that to a level where it could really have impact? Because I imagine that part of the problem sat where you are is, if you have an innovation fund, by necessity, innovation has a very high proportion of failure, and of course it's touched on in the auditor general's valedictory; in the current climate still, of course that means headlines in the Western Mail—look at this project that didn't work, didn't deliver, et cetera. So, presumably, actually a higher level of innovation fund across Government would also enable service transformation within the NHS, et cetera. Because it's difficult for you to justify, when there are such pressing demands, particularly where some of those demands, of course, are life and death demands. But having an innovation fund across Government actually could be a useful complement. 

Absolutely, it could be a useful mechanism. I wouldn't want to remove that the biggest innovation fund we can bring to bear is the total allocation that we have available, both for NHS Wales and for social care. Certainly in the context of 'A Healthier Wales', that's what we're trying to do, but I accept that there is a need for some enabling funding. There probably has been some hesitation over the years on this. Firstly, I hope that we've been able to provide a more resilient NHS Wales financial position over the last couple of years, because we've been able to balance the main expenditure group and discharge it. Even if we've had individual organisations struggling, actually, some of the discipline has been applied to our overall approach. I think there are dangers that, once investment is made, people see it there as fixed for all time. I was quite pleased that, when we developed the intermediate care fund guidance and in our experience of it, as well as maintaining approaches that were successful, actually we were always clear in our methodology that it was about standing down those examples that didn't work, and it felt that we'd been able to open up a different kind of discussion to say, 'We've tried some things, but, simply, the funding isn't going to be the right way forward on these areas'. I do think that, looking forward for both NHS Wales but also the health and care system, we do need greater flexibility to deploy more innovation, more stimulation, and to allow ourselves to, hopefully, have many good examples of success. But, inevitably, coming alongside that there'll be some examples where it hasn't quite worked as intended. 

We are virtually out of time, but I know Oscar—Mohammad Asghar—had a question he wanted to ask.

Thank you very much. Dr Goodall, the thing is, I was looking at some of the old figures before you came in, and the recent ones since you are the head, and they are pretty good figures—to me, anyway—and pretty encouraging. The thing is that, in your own written evidence that you have given to us, different health boards like Aneurin Bevan, they are working on cataract and knee surgery and prostate cancer, and ABMU LHB is working on a review of continuing healthcare expenditure, and Betsi is doing some work on medical agency nursing and other areas. So, those are your views on certain areas where financial management and savings can be achieved, and you have already mentioned in your very first statement that the NHS could have done better in finance. That was your very first statement, as we already have said. How effective do you feel the national efficiency healthcare value and improvement group has been at helping health boards to identify and realise savings?

Firstly, the accountability and the responsibility lies with the individual health boards and trusts, but one of our advantages in Wales should be that we can have closer oversight, but also we can develop our expectations for the system in a different way. This particular board was an attempt to raise some of our expectations, but to give people the tools, the methodology and the analysis to pursue savings, whichever health board or trust they were in. So, I do think we've had some success. So, I was really pleased that—. We hosted the original approach to bank and agency work for medical staff across Wales; this has been a position that had been deteriorating year on year, but in 2017-18 we have been able to identify nearly a £30 million improvement in medical bank and agency work. In fact, in our prospective figures for the current financial year, we look to improve that by an additional £20 million again. So, that means £50 million recurrently being freed up to be utilised in a different way from just the variable pay around these very high-cost areas.

I think that some of the approaches you've outlined there are about our approach to pathways. In my experience, the better organisations are lining up discussions around finances with their broader staff and particularly with our clinical workforce. And, certainly, we have some opportunities in Wales: we're linked to some of the international outcomes work that's happening, and Wales is actually seen to be developing some expertise in these areas—so, yes, with some individual organisations like Aneurin Bevan, but, increasingly, we're rolling that out as a methodology across Wales. So, I've seen ABMU take that up recently, and I know even a few weeks ago Betsi Cadwaladr actually did a session on value and outcomes that was very well-attended by its clinical staff up there. So, there are opportunities on the methodology as well as some of these more traditional areas of saving.

14:55

Thank you very much. Just a little question—we're looking at the last one, I think—

How is the group ensuring that value-based healthcare principles are being adopted by NHS bodies to secure real changes in clinical practice?

I think, firstly, it's about highlighting the successes that have happened—so, the ability to have clinicians presenting their own experiences of doing this. Secondly, it's about us adopting some of these approaches on a more national basis—so, the cataract pathway work; we've tried to grab what's been done in one health board and started to describe that that should be a general methodology and approach. And, thirdly—not least because I think that value is an area that absolutely supports the principles of prudent healthcare—that we've ingrained an approach to value focusing on delivering savings, but you deliver what matters to patients, as part of our general approach under the new health and social care plan, 'A Healthier Wales'. So, we've got both the strategic approach on the one hand, but also our practical approach to get alongside individual organisations as well, and we can't just leave that to individual organisations any more. We have to have a role to help them in delivering that.

Thanks, Oscar, and, before we break, did you have a very quick question, Lee?

Yes. It's just, in your letter to us, you talk about the progress you've made in producing a locum agency rate cap since last November, where the total expenditure on medical, dental, locum and agency workforce at the premium rate has been reduced in the last six months by just over £13 million. What work are you doing to look at a more strategic approach to dealing with short-term staff shortages rather than relying upon freelance locums?

I think it's a range of different areas. So, what we had to do in the first place was to introduce some different calls, which is why that ended up being a policy change in Wales around the way we were overseeing it. And, as I was just articulating, that remains a very material way of freeing up some of that approach, by co-ordinating across health board areas. People were setting different rates for different staff, which meant that you could pick and choose a little bit where you wanted to go across Wales for different levels, and we've been able to, I think, discharge that in a good and professional way. But, absolutely, despite the fact that we can improve some of these areas, we want to have an approach where this is about growing our substantive staff. That might just simply be replacing locum doctors with local doctors who are committed to the local organisation or it may be about how we approach the skills that need to be in place, or even the emergence of different roles in different ways, so, the extent to which—. Are all doctors' duties to be carried out by doctors? Can they be discharged elsewhere? How do we get the multidisciplinary teams working in a GP setting? How much can be discharged by other professionals, like pharmacists, coming in to support rather than just an ongoing growth of some of the GPs in a difficult market?

And, finally, we have to continue to try to make Wales appeal to individuals who want to come and work within our system. So, we've done some of that through our 'Train. Work. Live.' approach, but that's a much more long-standing approach, I think, to track the next three years or so. The final thing that I think that clinicians are looking for is, increasingly, they want to be part of a broader team, they want to have some flexibility in some of the roles that they deploy, and I do think that we need to alter some of our approach to employment. So, some of the feedback from GPs, for example, is that perhaps some new GPs coming into the system would rather mix up some of their different experiences through the week with different sessional commitments, some of which is about being in the practice, some might be operating in pathways in the community, might be tied up with out-of-hours work, or it might include a clinic being done in a hospital environment and, I think, traditionally, we've probably only really—other than at the edges—offered them one opportunity only. So, I think a lot more flexibility—and, increasingly, listening to our staff, of course, which is why we do things like the staff survey.

On that note, we will thank you, Dr Andrew Goodall, and our witnesses. We will take a short, five- minute break, because I know that you're remaining with us for the next session on informatics as well, so you probably need a bit of a breather before we launch into that. But thank you to the other witnesses for being with us today. We'll provide a transcript of today's proceedings.

Chair, thank you very much. Diolch yn fawr iawn.

Gohiriwyd y cyfarfod rhwng 14:59 a 15:08.

The meeting adjourned between 14:59 and 15:08.

15:05

Ailymgynullodd y pwyllgor yn gyhoeddus am 15:08.

The committee reconvened in public at 15:08.

4. Gwasanaethau Gwybodeg GIG Cymru: Sesiwn dystiolaeth 4
4. NHS Wales Informatics Services: Evidence session 4

Can I welcome Dr Andrew Goodall back, and also our other witnesses, for item 4, which is evidence session 4 on NHS Wales Informatics Services? Would you like to give your—? Well, we know who you are, Andrew. Would you like to give your name and positions for the Record?

Yes. Andrew Griffiths, I'm the chief information officer for NHS Wales and the director of NWIS.

I'm Frances Duffy, and I'm director of primary care and innovation in the Welsh Government health and social services group.

And Dr Andrew Goodall. We've got a number of questions for you, so, as with the previous session, if I'm moving things along, it's just so we can get through the maximum amount. The opening question is from Lee Waters.

Thank you very much. On 24 January and 21 March, there were two major incident failures. Mr Griffiths, why didn't you mention that to us when you gave evidence to us on 16 April?

Well, I don't know if we were asked particularly that. We were asked about the Welsh Audit Office report and the recommendations being made, so I didn't think it was relevant to the questions being asked at the time, and they're operational issues that we were working through and were satisfied were in hand.

No. I wasn't asked a question about that, and I didn't feel that it was relevant, given the scope was the Welsh Audit Office recommendations and how we were taking those forward.

Well, clearly, the auditor general didn't agree that it was not within the scope because he wrote to us to highlight it as something that required urgent attention. Do you normally take such a narrow and legalistic view of the questions that you're asked?

15:10

No, that wasn't my intention at all. My intention was to answer your questions honestly and straightforwardly.

Because as well as having that letter from the auditor general requesting this extraordinary extra session, which I don't remember happening before, there was another issue that arose as well. You said to us that, on the question of double running—running two systems in parallel because the new system wasn't quite ready—. You submitted a table to us, in fact. We then, just to check your workings out, ask the health boards to sense check that table, and they found that your figures were not accurate. In fact, the director general had to write to us again, so we're now on our third table and each table has a different set of figures. So, the information that you gave to us was false.

No, I wouldn't accept that it was false. I would accept—

Well, I would accept that there were two issues with the figures, which relate to how those figures have changed from one year to another, and one was with some figures we'd had from ABMU and another was with the number of interfaces for GP Links software, where we believed there was one interface when in fact there were two.

The original figures

'provided by NWIS underestimated costs by a total of £27k'.

That's what Andrew Goodall told us in his letter. So, they weren't right, were they? You gave us information that was not accurate.

Well, I gave you information that I believed was accurate based on the figures that we'd had previously. One of them, as I say, was reflecting the cost there had been the previous year, and the other one was that there were two interfaces and not the one.

Because, given your first answer about only answering questions that you were directly asked, there is an issue about the scope of this table because it's only referring to strict double-running of systems. It doesn't cover the other scenario where the health board may feel the need to go out and get a new system because the system you're developing is running behind. We know that over two thirds of the projects you are running are running behind. So, in terms of the broader picture of money being spent on things because your systems are running behind, do you have an accurate figure on that that we can have?

No, we don't have a figure on that.

But you'd anticipate that it's higher than the £545,000 double running. 

Clearly, the figure that you're referring to there is specifically around the costs for those systems that we are anticipating retiring when the laboratory information management system is fully implemented.

But are you aware of health boards incurring additional costs to make up for the fact that your systems are running behind?

Well, there are already legacy systems in place, and clearly those systems, at some point, will be retired and new systems will take over from them.

Yes, that wasn't quite the question I was asking. Are you aware that health boards, in waiting for you to bring the new systems online, are having to invest money in other systems to keep the show on the road?

Well, I think that all of those decisions are made jointly with health boards in our planning—

Sorry, my question is: are you aware? Is this happening?

Well, I am aware where there are systems in place that are using functionality that will be replaced by national systems coming in.

But you're not aware of health boards having to spend extra money, which they otherwise wouldn't have had to do, to get systems on board because your projects are running late.

I'm not aware of any systems that have been procured in the in-between time. I'm aware that there are systems in place that will, in a phased approach, be retired. I'm not aware of any that have been bought in the in-between time.

Because my worry is the question of trust. You saw from the initial fieldwork that the auditor general did that the euphemistic phrase used by the auditors was that there was lots of 'frustration' in the system towards NWIS. We were told there were issues of trust. The auditor found himself that your reporting of

'progress and performance to the Welsh Government and the public has tended to be partial and overly positive.'

You rejected that when you were before us in April. Since then, we've had the auditor tell us that there were more problems than you were letting on, and then we've had the figures you've provided us with proven to be inaccurate. So, you can see why my concern has not been abated, and the fact that you're not willing to acknowledge that there is a problem heightens my anxieties further.

Well, I think that what we're seeking to do is be straightforward. I'm not trying to hide anything at all, but it is a complex environment, so what I'm seeking to do is come here and explain as best I can.

But you were just saying that you're not trying to hide anything, and yet I've just given you two examples of things where, inadvertently or not, you have been hiding things. You're not giving us the true picture.

Well I think, particularly on the double-running costs, you can see from the explanation that that wasn't us seeking to hide anything; it was not having the most up-to-date information for ABMU's figure for the current year, and the other issue being the two interfaces, not the one. So, it was a straightforward, honest mistake.

15:15

I want to ask Dr Goodall: the Francis report into the situation in Mid Staffordshire talked about the NHS now having a duty of candour. How do you feel the duty of candour is being applied to NWIS?

I think it's really important that our NHS has an openness and transparency about what's happening. I think, in part, that occurs through the organisational approaches in place, the extent to which health boards and trusts—. I think, looking at my previous evidence here, I've said that I acknowledge that there is the potential, as we look at a national executive function, where NWIS would fit alongside that, how we would oversee some of the national informatics, and that we have a chance to alter, I think, some of the broader governance that is there. I think, certainly, I've tried to discharge some of that more openly around my approach to the national informatics board, which I chair, over the last 20 months or so, and to create some balance so that risks are clear and understood. But actually, we have a system-wide overview of those areas that are within the responsibilities of NWIS, but those are actually within the responsibility of organisations.

Okay. I'll come back to some questions later, if I may, Chair.

Good. In terms of the sort of wider strategic issues, your letter states that the new health and social care plan, 'A Healthier Wales: our Plan for Health and Social Care', includes a commitment to an increased investment in digital. Are you able to give any indication as to the extent to which you hope that digital will be expanded?

Firstly, 'A Healthier Wales' has been out just over four weeks or so now, and has responded to the parliamentary review and recognised the role of digital. Without repeating some of the references I made earlier, I think the change of approach that we need within our system is to allow our approach to digital to not be about the latest additional set of funding to go into an information technology budget, but to be seen as a real enabler about how we change clinical practice around front-line services, and also the opportunity to improve our approaches within our broader systems.

I think where we are at this stage is still to work through how we all discharge some of the levels of funding that need to be achieved at this stage. I think the first important exercise that's been done over the last 12 months anyway is that we had an open discussion with the service across the national organisations, but also the local health boards and the trusts, about the extent to which, if they were not confined only to their existing budgets, they would wish to grow and develop the budgets for the future. That's given us an assessment, which are ballpark figures—a very big commitment on the capital side—of around £180 million or so, and on the revenue side for the future, and ask, if you like, over five years for £288 million. I don't think all of those figures are validated, but the first important part of that exercise—.

They were referred to in the auditor general's report.

Indeed, and what I would say on that is that I commissioned that genuinely to be an open process of assessment. So, rather than for us to spend months and years working through all of the technical detail of it, but what was the picture in the service—. I don't think all of that responds necessarily to the parliamentary review or our plan, 'A Healthier Wales', yet. It was done in the run-up to the parliamentary review findings. We already knew from the analysis last summer that this would be quite a strong feature of the parliamentary review. However, on the capital side, I'm pleased that we've already made some progress on that. Probably, over the last two years, and then for the prospective three years, actually we've managed to increase some of the capital allocation into Wales by around £120 million anyway. I'm not saying all of that directly correlates to the £188 million, but it means that we've already made good progress to be around two thirds of the level of spend that was there. But I think I need to allow the system to stand back and ask whether we are investing that in the right areas for the future, and whether they would be the right areas of development to take us through. That includes some funding for some areas that we know are having difficulties in our systems in Wales at the moment, so it does include some flexibility around some of the risks that we are even reporting now within our system. But the revenue side, I think, needs to take advantage of not just a specialist digital fund, although that could be one of our outcomes, as we were sharing with the health and social services committee last week, but actually how we utilise the overall allocation and in particular how we are able to use any growth in those funding approaches and the transformation fund over the next couple of years.

And you're confident that an increase in transparency will result from your plans.

Yes, I think we've dealt with that openly around the informatics board table. We've allowed health boards and trusts to call it out to us. It does mean that the resolution of the funding needs to come from a combined approach. I would say that that doesn't remove all of the individual organisations' own responsibility for running ICT. About 50 per cent of our current information technology spend in Wales, in summary terms, is through NWIS, but the other 50 per cent is actually conveyed and supported through the individual health boards and trusts themselves. But I do think that we are going to have to describe and allocate the funding that will allow the digital agenda that was outlined in both the parliamentary review and the plan over the course of these forthcoming weeks, and we will need to keep that under review, not least on behalf of the Cabinet Secretary.

15:20

Thank you, Chair. Again, good afternoon, Dr Goodall. Turning to the reason—my question is around the role and responsibility for serious incidents in NHS Wales, please; that's what it is. Turning to the recent serious incidents, are the accountability and responsibility arrangements for such incidents sufficiently clear? Dr Goodall, are you clear in your own responsibility and also, similarly, Mr Griffiths, are you clear on exactly who you are reporting to whenever these serious incidents occur?

Perhaps if I could start that, Frances may be able to just help me with some of the areas, but I think, in terms of our existing system, we can be clear about the reporting approaches on this. In terms of serious incident reporting, we expect to receive it within Welsh Government. We have mechanisms around both our monthly and quarterly mechanisms in place to oversee that, but the technical response and where, organisationally, this is located is actually via the hosting arrangements within Velindre NHS Trust, which oversees those mechanisms and arrangements. That doesn't remove our own oversight or our assurance processes in terms of the system.

One of the areas that I don't think has, perhaps, worked as well, if we look at a range of incidents recently from the WannaCry outbreak, right through to some of the recent data outages, has been some of the communications aspect. So, although we oversee the system and leave the technicians to deliver, actually we have seen the need for a different role and a clarification of responsibilities on the communication side.

I think that some of this feels to me as though it's confused, to some extent, by having a chief executive with a lead role for informatics in Wales. I don't think that removes at all my expectations in terms of acting as the accounting officer for NHS Wales. I have other chief execs who act with other areas of leadership. These are soft leadership approaches that help them to bring some expertise and oversight on behalf of the system, but do not bring with them an accountability. So, Steve Ham's responsibilities are in respect of the hosting mechanisms and then he has an interest in acting as a lead chief executive for Wales.

NWIS do have a responsibility to oversee that. We have mechanisms in place. We have our national infrastructure board. I think, importantly, when that oversees what we are doing with these various instances and the individual events, that's actually chaired by the service, so it has actually been chaired by colleagues from health boards at this stage, so that there is a different approach to the information and isn't actually within the NWIS auspices. I think we have had to make some adjustments over these recent months, not least in respect, as I said, of the communications approach that I felt was not delivering what was necessary.

I think it's fair to say that when we've looked at ICT incidents and then, more recently, some of the cyber security incidents, we've got a well-established process within NWIS and within the health boards and the infrastructure management board that Dr Goodall was referring to that is actually chaired by the health boards. That has tended to look at the technical issues: what's happened, what were the issues, how do we fix it, what do we do next. It's been very focused on that.

In late 2016, we were having a look at whether that actually really drove down into the impact on patients, and so, looking at our Putting Things Right legislation and the serious incident reporting that we had, it was felt that the reporting of these types of incidents didn't quite fall easily within that process. So, as well as the technical response that you really need, and that's the immediate response of how do we fix it, et cetera, are we really learning the lessons and looking at the impact on patients? So, we asked the delivery unit to go in to NWIS and work with the health boards to work up what were the issues there and how we could put a better process in place. That's clearly the responsibility of Velindre as the host organisation, as the accountable body under the Putting Things Right legislation. So, the delivery unit went in, worked with the teams, came up with a set of recommendations in early 2017, and that's being worked through. I've written out to Steve Ham in his role, originally in 2017, asking him to ensure that action was taken on the delivery unit report, and then again in June this year, in the context of some of the noises around the cancer network information system Cymru, to ask what was happening and whether we were making progress on that.

Now, the key feature of that is that it's a joint investigation between NWIS and the health boards, and it's important, when we look at issues and the impact on patients, that's not something that NWIS can necessarily follow through themselves. They will highlight the areas where there could be an impact on patients, but we really need the health boards to look into that in some detail. So, a new framework has been developed. I understand from Steve Ham [correction: Steve Ham's team] that that's been issued to chief executives on 3 July. That sets out very clearly what's the process, what are the responsibilities, and what's the process for lessons learned from that. So that's improving the process and that brings the ICT world a little bit more into a normal governance of serious incidents, and looking primarily at the impact on patient care and safety.

The third aspect was the aspect about general communications. Again, starting from a premise that you were looking at the technical incidents, and NWIS reporting up into health boards through the infrastructure management board, one of the concerns we had was whether these messages were being fed up directly through the organisations themselves, or more importantly, whether we were getting the right public message. I think that was more important, as we've seen in recent times where, when something happens, some users are quite quickly onto social media, and then you get confused messages. I remember seeing that with some GP practices in January when there was an outage in the data centre, but they were immediately tweeting, and worried—was it cybersecurity, was it WannaCry? So we felt there was a bit of a gap in what we'd been doing on trying to manage those communications. So again we've put in place a small group from NWIS communications, our communications teams, communications teams in health boards, to develop a framework for me, to set out, again, processes. Who calls who? Who does what? That was put to the national informatics board at the beginning of June and we have issued that protocol—I think on 14 June we set it out. We set it out in what we call the beta framework, so, in others words, this is the design of it, now we've got to trial and test it in a live environment and it will come back to the national informatics board in six months. Is that system working? Is it achieving what we expect it to achieve? So that was an overview of how we have tried to—

15:25

Thank you very much. Is there scope for confusion where Velindre NHS Trust is the responsible body under Putting Things Right regulations and reports incidents to its board, but seems to have no responsibilities for the wider incident responses?

I think there can be some confusion, but I do think the situation is clear in terms of the balance between the hosting arrangements. The bit that probably just adds to some of the confusion is, by coincidence, as well as being the hosting chief executive, Steve Ham is also the chief executive who is leading on the area of ICT from a system perspective across Wales. That probably is the area that is clouding those issues at this time. But we have hosting mechanisms in place for other organisations in Wales too, so with shared services, with the Welsh Health Specialised Services Committee, and those mechanisms are clear even though they are through hosting mechanisms as well. So, I think probably that's where the confusion comes. I would hope that, as we respond to the plan and the ask within the parliamentary review—and it did raise issues itself about some of the governance as well as the WAO report—that we should be looking to reflect and make sure all of that accountability is very clear.

Thank you very much, Dr Goodall. You said that the Velindre trust reports serious incidents to the Welsh Government through its quarterly reviews. Are you not getting these reports directly from NWIS anyway, given that you are responsible for managing NWIS delivery and performance?

Yes, we do receive them. So, the quarterly review mechanism is a formal ability to stand back and review the systems and the progress and on the check. But certainly our monthly meetings take place with NWIS, and the monthly report that we have also includes the incidents that happen, and of course, as an incident is emerging, we are part of the communication around that, and as Frances was just outlining, we have some different responsibilities now that we have described in respect of the communication. So, we do have roles to oversee these mechanisms, and we are looking for assurance from that, both in terms of what NWIS is delivering, but at the same time what health boards and trusts are delivering themselves. I think that's why that national mechanism of the infrastructure board becomes quite important in how it brings those different experiences together, and isn't actually chaired by NWIS.

Thank you very much. Should the chief executive of ABMU have gone directly to you with her concerns rather than Steve Ham, given that his response shows that Velindre is not responsible for these areas? If so, is that a message you will be communicating to the service?

If there's any confusion on that, I'm happy to be very clear with colleagues. If I was giving that example around a range of other areas, whether it was shared services, whether it was the Welsh health specialised services, I would expect the chief exec to know that they would in the first instance write to the managing director for the specialised services committee, they would write to the ambulance commissioner for the emergency ambulance services committee, and my first request on that would be that there should have been direct communication with NWIS. But, absolutely, in terms of system escalation, that could have been something that came through me or through my delegated responsibility to Frances. If that is unclear to chief executives, I'll make sure that I discharge that, and I can pick that up quickly tomorrow in the NHS executive board. 

15:30

Thank you. And finally, Dr Goodall, your letter says that when there is an outage, in your words,

'Welsh Government immediately sought assurance that investigations were underway to ensure prompt action'. 

Is it enough to just seek assurance while the service is looking for leadership and clarity around what is going on and how to respond?

We have a role to oversee the performance and delivery of the system around informatics, whether it's through health boards and trusts, or whether it's through NWIS itself. We don't have the technical oversight of that in terms of stepping into that territory, so assurance is where we start, I think as Frances was outlining. Certainly, in the arena of communications, whatever was being expressed technically across the different organisations, we don't think that that was sufficient. A lot of our learning, actually, was coming from the original WannaCry experience, where we needed to move some of the oversight of that as an ongoing issue, which was over a matter of days, more into our general escalation processes that are in place, as we oversee our system of services at this stage. But I think there is still a need to perhaps be clearer for the future about those arrangements, but our general approach is that we are responsible for the oversight of the performance and delivery side, but what we can't do is—. We don't have the expertise to interfere in the technical delivery; we see that as being between NWIS and the service, although we'll have an oversight role. 

I think it is important, as you say, that there is leadership there in dealing with the issue, and I think Andrew Griffiths himself picked that up by writing directly to chief executives just recently, giving that further commitment to ensure that he updates them immediately, rather than just through the infrastructure management board, to make sure that those messages are going right up to the chief execs so that they have assurance that the work is being carried out to fix whatever problems that have arisen. 

Thanks, Oscar. We need to make some progress. Do you have a very quick supplementary, Lee, before I bring—

I would like to have a couple of quick questions, if I could. Can you be clear how many outages there have been now, this year? 

So, there's been—. I think it's important to clarify the different types of outage. So, there have been three what I would describe as data centre outages, where they affect all the systems within the data centre. There have been then specific application outages. The two of greatest concern are CaNISC and the Welsh laboratory information management system, and those are principally because they are harder to failover to the other data centres. So, the incident that we had in January was a case where both data centres were affected by the issue, which meant that we couldn't failover, so we lost those systems for a number of hours. The other two incidences were the data centre outages. We were able to failover those services to the other data centre, so they continued to run. Where that is more difficult is with CaNISC and with the WLIMS system so, consequently, there's a bigger impact on those two systems. 

So, those two systems, I think—. I can come back with the specific figures, but I think it's seven times that the WLIMS system has been down, and around about 11 times for the CaNISC system.  

What's concerning about Andrew Goodall's letter to us about the root causes of the three major ones is that they've all got different reasons for going down, so, clearly, there are multiple points of vulnerability in the system around your major data centres. So, maybe you can tell us a little bit about how concerned you are about the implications of that and the other ones you've just mentioned. That's a significant number to be down when we're already in July, and we know from CaNISC that the system is unlikely to be in place for some 18 months, two years; that's assuming it's on time—nothing else is. 

In terms of one of the potential solutions for this, just reflecting on the point Frances Duffy made earlier about this being seen as somehow outwith the normal reporting incidents—I think the phrase you used was you said you were bringing the ICT world into some of the more normal ways of incident reporting—it seems to me that there is a broader issue here because of the way that digital is regarded. It's seen as an IT supplier somewhere over there, rather than as a key part of the senior chief executive overview of what's going on. And from the chief execs we've had in here, they've all been a bit confused about what's been going on; they don't feel they fully know, they don't feel they've had a fully to their satisfaction explanation from NWIS for the reason for it. When I asked the chief executive of ABMU, rather than having data centres, which are old-fashioned pieces of kit—and I understand you might be building a fourth one—why weren't we moving over to the cloud, where these are routinely being provided, she said that she probably thought we should, but she wasn't an expert in this. Whereas I'm sure if I asked another chief executive—I'm not picking on her; it's just as an example—of any other part of this extremely complex system, they'd have a view. But it seems somehow okay for ICT, or digital more properly—they don't feel confident to be able to challenge and to be the expert client. So, I guess my question is about the sense of how resilient these systems are, knowing how unstable they've been and their points of failure recently, but also, more broadly, about whether or not the leadership of NHS Wales, in its broadest sense, is fully on top of what can no longer can be seen as the IT department; it now must be a core part of your delivery.

15:35

If Andrew could respond maybe to the data outages and its resilience and I'll pick up the broader issue. 

I would say that the data centres have been designed to be resilient. I think when we purchased the laboratory information management system, there was an expectation about what that resilience meant and what the system was able to cope with. I 100 per cent agree with you that digital should become more mainstream, should be higher up the agenda, and I think what we're seeing is an increasing reliance on digital to deliver services, and as we're getting that increasing reliance, there's less—'tolerance' perhaps is the wrong word, but you understand what I mean—tolerance to the systems being unavailable. And I think that is also true in the workforce more generally. People's expectations are higher of digital and it's important that we make that investment into systems to make sure they are as resilient as people will expect them to be, and, indeed, as I would like them to be. 

As far as what our plans are to increase that resilience, we have no plans to build another data centre. We are looking at options about what is the next stage in data centre design, again for a lack of a better word. Whilst we're fully embracing cloud and looking at the possibilities that gives us, I think it's important to say that cloud is another data centre somewhere else and it comes with its own different issues. And we've been exploring those to look at how can we best use cloud infrastructure as a methodology to increase our resilience. So, if I take LIMS as a good example of that, we've got two data centres where we run LIMS. There is a failover time that is greater than we would want it to be, so an option for us there is to bring additional what I would regard as data centre capacity into that equation, to help with that problem. There are obviously a number of ways of doing that. One would be building another data centre. That isn't on our agenda at all. Another option would be to utilise another data hall within an existing data centre that we currently contract with, and a third option there is to make that wider and use cloud services. We're currently looking at the Microsoft cloud offering. We are currently using that for Office 365 in a pilot, and we've also built a link into the Azure cloud so that we can trial those services for additional server capacity. If we get confidence in using that, then that is one option for increasing that data centre resilience. 

In terms of cloud-based approaches, in the informatics board, I think it was in the June [correction: April] meeting that we signed off our approach to understanding all of this, so that we have some choices to make. As you look more broadly at cloud-based services, irrespective of the fact that Welsh Government have transferred to it, and public services are using it, there seems to have been a broader hesitation across the UK in terms of moving and migrating patient data into the cloud. So, we've just been trying to link in to some of the sites that have been more leading in this area, but we're quite limited; I think it's areas like Maudsley Hospital, for example, in south London, that have started to do it. But it's at the very early stages, even if it's seen to be more accepted practice, and it's the patient data knock-on effect and consequences. So, hopefully, with examples like that—I think we're working with the Welsh ambulance service trust at the moment to trial some of that usage—we'll be able to make some progress on that for choices. 

On your broader question on leadership, I think there is genuinely something about the confidence of those working in the system about the way in which we use digital. Perhaps it has been in the past a bit more of a back-room service that people take assurance of rather than something that is at the forefront of the enabling work. I think that was the push from the parliamentary review, to say that there is more to go at at pace, and perhaps that has supported some of the slowness of the roll-out that we've seen over previous years; it's not been seen to be enabling the clinical practice and service transformation that seemed to be the next level of roll-outs across Wales, owned by technicians rather than by the organisations. 

So, I think we need to help the capacity within the organisations to do that, including starting at the board and the chief executive level, down to those who will have some service expertise and who are front-line staff. I think we need to raise our general skills, but we have also tried to expose some of the opportunities of this. So, two years ago, we did have a team Wales event. It was focused only on informatics. It showed the range of innovations that were happening across Wales, as well as further afield, to just try to stimulate some of these areas. And as I said earlier, my worry—and I'm sure the Cab Sec will avoid this—is that we don't want to have digital transformation only enabled by traditional budgets being enhanced; I want to try to find a way of using the overall allocation, some of which is within the discretion of the individual organisations. And it will raise the question about our level of funding in here. We're currently at around 2 per cent; really, we should be anywhere between 2 and 4 per cent to feel that we are keeping up with some of the developments at the moment. But, to answer your question, I do think that there is some hesitation from those working within the system, and we need to make sure that they feel much more confident.

15:40

Thank you, Chair. Just two of the seven health boards provided impact statements for the serious incident report, despite being asked three times to do so. Dr Goodall, my question to you as CEO of NHS Wales is: is that acceptable? And, Mr Griffiths, is this the sort of response rate that is par for the course? Does it frustrate you that NHS bodies complain about lack of answers, but then, when there's an investigation, seemingly don't co-operate in that?

It may tie a little into what I was just reflecting on there, in terms of the oversight of digital at the centre of our approaches for the future. I personally don't feel that is acceptable; we'll be looking to address that within the system. And, as Frances was outlining, it would be to have the same discipline that we apply in our broader incident reporting processes at this stage. And, as much as that can be asked for from NWIS, absolutely I have a responsibility to make sure chief execs understand they need to respond on that, and within the time frames.

Can I just add on that? As was referred to earlier, that was the work of Velindre and NWIS, on a revised working protocol with health boards, emphasising the need for that joint investigation, and that's the framework that has now been submitted to the chief execs, on 3 July. So, hopefully, that's raising the awareness of the processes there, and also raising it to chief execs themselves, the importance of their contributions.

I would say that we are very keen that, if an incident happens, we investigate that fully, and that includes the patient safety side of things. I think sometimes we've been probably slow to close off those investigations, sometimes waiting for further information, as in the example that you quoted. So, we've looked as well, as Frances has said, at a revised way of doing that, and bringing some of that to a close sooner, and highlighting the fact that those responses haven't been received. So, it is a frustration, as part of the evidence gathering, but hopefully we are able to move forward by closing the timescales on some of that, and providing the feedback directly to chief execs on those issues.

So, the fact that you're looking to overhaul that system, then, that suggests to me that that sort of response rate—two out of seven—has been par for the course then, has it, with other investigations?

I think there's been an issue, as Frances alluded to, that people think that if it's an IT issue, it's an IT issue, not recognising that, actually, it's about the effect on patients. So, I think highlighting that has been useful. There is a new process in place for that. We have tried to make sure it aligns with all the other patient safety processes, which it does, and just making sure those two strands are being brought together more quickly than they have, which allows us to conclude the reporting.

Thank you. Taking your point there about the focus on patients, I have a question to Dr Goodall: your letter emphasises that no patients came to harm as a result of these outages, however both the Velindre paper and the serious incident report describe negative patient experiences like delays and postponements. How can you know that a delay or a postponement hasn't caused harm to a patient, especially, for example, cancer patients, where we know that the timelines for decisions and interventions can really be essential?

I think, partly, it's why, as we do for other serious incident reporting, we want to drive, which wasn't always the case, the impact on patients, in terms of whether that is a broader number of patients or individuals who are passing through our system. My concern in the past is we've not necessarily captured that. So, I do take in part the assurance, or the comments, that have been made by individual organisations. However, having said that, it would be quite right to say that, as our information basis, and our informatics approach, becomes the core way in which we are supporting the operational management of services, we have to look at these things in a different way. So, again, from my experiences as an operational manager in the NHS over many years, the incidents that you're dealing with on a daily basis could well be about the inability to access a health record or to track it down from a main department, or it could be in an office. You may end up with short-notice staff sickness. There may be a waiting time, actually, for a particular procedure, which could have some knock-on effects as well. So, it's important that we make sure that these are now understood to be in the operational setting in that way.

But firstly, let's make sure that health boards and trusts actually are able to report it, which is what has started over the course of this last 12 to 15 months, and let's try and make sure that we can address some of those issues. The more technology replaces the way we've practiced, whether it's with paper or just people dealing with patients, the more it'll be subject to some of the normal operational pressures. My final comment would be that's why it's been really important to have business continuity arrangements in place across different organisations. They may be in place ranging from adverse weather to an ICT incident, but people did deploy that through these recent processes. Certainly, when we were overseeing the WannaCry concerns and managing the system more at that national level, people were giving us a lot of confidence that they had mechanisms in place, and hopefully, as you received advice from other health boards in their evidence, you were able to see some of their local approaches to business continuity as well.

15:45

Thank you. Finally, in regard to clinicians, Velindre board's paper that they submitted to us was certainly the most emotionally charged piece of evidence that I've ever read, and it was clear from that that there's been a great deal of stress placed on clinicians and a huge damage to their morale as well as a result of these outages. Do you recognise the harm that these outages do to clinicans' confidence in the system and what more could NWIS be doing to amend and sustain good relations with clinicians?

Perhaps if I could start, but maybe you could just give a response from the NWIS side. It's really important to make sure that we have the clinical voices as part of it—so, that reporting end of people describing it. There will also be concerns when equipment may fall out of use, for example, because of maintenance issues, whether that's a radiotherapy facility or whatever, and I really appreciate the efforts that people go to to make sure that there is a genuine focus on patients and getting them back within the system. But absolutely, these kind of areas will knock some of the confidence in the system. From a data centre perspective, the three outages that we've had this year are the first that have happened on a national basis in Wales, so we do need to make sure that, while one incident may have been accepted, they have some response on the resilience of the systems. You may want to comment on the clinical council, for example, and some of those mechanisms, Andrew.

We established a Welsh clinical informatics council to bring together clinicians from across Wales. We've also been trying to establish the role of chief clinical information officer within organisations, really to give a focus for the digital agenda and how we move that forward. I absolutely agree that having good clinical engagement is absolutely key to this, and the clinical council looks at what's going on within the digital agenda. What we're seeking for them to do is take ownership of that and also to be recognised within their own organisations as leaders within digital transformation. So, it's very important to us, and I understand that the impact of any outages does have a damaging effect—I absolutely understand that—which is why I think it's key that we engage with those folks and understand their concerns, and that we're able to address them. 

Velindre board's paper also lists several incident reports that NWIS was due to produce but were delayed. Several were due in autumn 2017. How long should it take to produce an incident report? When you've produced it, how do you use it? And how, having used it perhaps not just to file it so everybody's got a copy, do you actually use it to improve and stop it happening again? How do you learn from those incidents to try and stop a repeat incident?

Perhaps, Andrew, you can start with NWIS, but it may just be worth picking up the broader system learning as well. 

What we seek to do is we seek to do a full investigation of the incident, and I think it's fair to say that what we recognised over the last period is that we need a shorter timescale to get an initial report out, partially to address the confidence concern and the sense of transparency. So, what happens is a full investigation is done, and there are two main parts of that: a technical evaluation and also the patient safety side. That goes through the infrastructure management board, which makes sure they're on top of the technical issues. There's also a lessons-learnt and an improvement report produced as part of that, so that that report goes to other areas of the system so they can also learn any lessons that come out from any incident.

What I've sought to do recently is to say that, within two weeks, we will send a report out that gives all the information that we have currently got, recognising that there may be further root-cause analysis or further information required to come to any definitive issues. As far as the organisation is concerned, we've participated in a load of quality audits and, in particular, the ISO 20000 audits. So, we regularly have those audits done. We look at all of our processes and make sure that the service boards produce and see all of the incident reports, pull together any lessons learnt and then we're able to make sure that that is carried forward in a way that the service is run. 

15:50

I do think there's a wider issue. Certainly, a lot of time and effort has been put in recently to improve the reporting, to improve the speed of the investigations, so that we can see the root-cause analysis. But there is a question about how you take a step back and understand what that's telling us as a system as a whole. So, partly to address some of that, we're using the national informatics management board and particularly the infrastructure programme delivery group [correction: informatics planning and delivery group], who meet every six weeks [correction: monthly] to have a look at the risks within the system. These issues and reports will feed into that. Are we truly understanding? If there are more outages, for example, is that a greater risk to the system? What does that do then to feed into the discussions at the national informatics board, particularly on prioritisation, and what we should be focusing on next? So, it is a challenge to make sure that you take that step back into that wider system learning but that's what we're trying to do, then, through the national informatics management board. 

Surely, with outages, it is not only the number, is it? It's where it's occurring and how long it's out for. Something that happens for 30 seconds four times a week is less serious than something that goes down for three days. 

Which is why, then, the technical assessment of these issues is fed into the sub-groups around the informatics management board. So, these are the technical experts who wil be able to make some assessment of whether this is a short-term issue or whether this is something that's giving us an underlying problem that we might want to address. 

There are criteria about the grades of incidents that allow us—to do with the issues that you've said there. As you said, some very limited impact from something that's happened and addressed very quickly will be handled very differently from something over a period of hours. 

Sorry, I'll finish on this, but you'd expect in any ICT system short outages to occur fairly regularly, if only because you have too many crashes in the network. So, ICT has to be reset and work its way around again et cetera, so, you'd expect that. It's when things are more serious—.  

Yes, I agree. 

I agree. 

I presume you'd like me to rattle through these fairly quickly now. 

Okay. In your paper to the executive board—the NWIS paper to the executive board—you say that there needs to be a greater focus on routine maintenance. So, can we take it from that that you will be increasing the proportion of expenditure that goes on that? 

Yes, absolutely. Yes, we're very keen that we put the routine maintenance first, above anything else. 

Right, so you'll be spending more than you did previously. So, that will be at the expense of expenditure on new projects.

Well, we're trying to work with Welsh Government to make sure that we can get additional funding in order to make sure that we are not taking away from new projects. 

And it fits with my earlier description of how we manoeuvre the funding with some of the requests made over Wales and how we link it to our plan, which I think we'll need to develop a broader overview of. Having said that, there have been some individual examples where we've chosen to invest in, for example, a hardware failure that needed funding to be allocated over and above NWIS' budget. So, whether that's been capital or sometimes on the revenue side, we have tried to deploy funding flexibly.  

Am I right though in saying, whether you're successful in achieving additional funding or not, that what you said in the paper is a tacit admission that you got the balance wrong in the past between routine maintenance and other investment, including new projects? 

Yes, I think that what we've sought to do is to push new developments. What we've tried to do is have an infrastructure plan that recognises an ageing estate and to fund that appropriately. I think I would agree with you that we need greater emphasis on making sure that that infrastructure is kept up to date. So, yes, I'd agree.  

Just to be clear, and you touched upon this, the £1.3 million upgrade for—how do you say the acronym? WLIMS?—that will be additional.  

That was an additional commitment arising out of the incidents that were occurring and a recognition that that needed to be extra into the system. So, yes. 

15:55

Right. So, you're not—. That's not at the expense of anything else.

We felt that needed to be an additional investment into the system, and there will be other examples of that order where, I think, Welsh Government needs to step in to make sure the budget and the funding are available.

So, this picture, then, of ageing ICT infrastructure—have you been able to evaluate what proportion of the infrastructure, however described, is beyond its reasonable lifetime?

Do you want to give a general sense, Andrew?

I think, by and large, most of the infrastructure is current. There are some elements in the data centre that are seven years old, which we are currently replacing. There's nothing else older than that. There are some issues as, I think, we've described, around CaNISC and some of the underlying infrastructure for that. We need to balance the software that's running on that infrastructure with the actual updating of the physical infrastructure. 

So, seven years old is the benchmark for being beyond its lifetime, basically, in IT terms, you would say. Yes?

And what proportion—? What share of the overall infrastructure?

Of the overall, I'm guessing, but, as an indication, I would say 5 per cent, 10 per cent, possibly.

Okay. And the cost of replacing that—have you got a figure for that?

We've done some analysis on that. I can't recall the actual figure for that.

Shall we offer to send a note on that that just gives you a feel for that in terms of how we've addressed the backlog? Certainly, there have been examples over the years and, I'm looking at the last decade, where, whatever organisations have done to replace this backlog, there have been times where we've stepped in nationally for other changes, whether it's Microsoft upgrades or replacing some of the core equipment that is out there.

I have a very quick one. You say 5 per cent to 10 per cent. Is that by value or by volume?

Well, I'm thinking by value, I think.

And, in terms of the continuity arrangements, one strategy is to invest in routine maintenance, the other one is to look at back-up infrastructure. So, are you satisfied that you have the balance of investment right there, or do you need to invest further in that as well?

If I could pick that up, generally, I think we need to develop an approach around some of the maintenance issues within the system, but, I think, increasingly, we have to allow ourselves a third category, which is the future development—the innovation that needs to break through, in terms of existing applications and systems and just keeping pace with the level of change that is happening. So, I think there is a third category to go at. But, certainly, we've demonstrated we've had to step in alongside some of them for national and local needs. We've given NWIS access to more discretionary capital—about £13 million—over these last few years, for example, just to try and help out with some of these issues. But, sometimes, it will be about health boards and trusts also resolving their situation and asking for capital support as well. 

ABMU had the joint emergency services interoperability principles adopted, which helped them to minimise the effects upon them. Should that be rolled out right across the NHS in Wales?

We do need effective business continuity arrangements. Frances, do you want to take this?

We are aware of that one in AMBU and we expect each health board to have a look to see what's their best business continuity arrangements. I thought that was an interesting development with ABMU. They talked about it when we had a discussion about business continuity arrangements some time ago at NIMB. I know their medical director was keen to share that learning, and I'll just follow that up to make sure that, in fact, it has been shared and see if that is best practice for other people to use. But I know that they did mention that a few months ago when we discussed these issues at NIMB.

Just a couple of questions. First of all, on your statement, Mr Griffiths, about the cloud being embraced by NWIS. Could you give us just a short note on that, just to show us exactly how that's working out?

Just on CaNISC, I was struck last week that CaNISC stopped being supported by Microsoft in 2014, making it vulnerable to attack. It wasn't until November 2016 that the Government announced a plan to replace it. And we're now some 18 months, two years away from it actually being replaced. Meanwhile it's been shown to be quite vulnerable. The board regarded it as being a red risk. Are there any other red risks around the system that aren't yet programmed to be replaced?