Fail­ing NHS board raided £2.7m from charity fund

Cash-strapped Tay­side took pub­lic dona­tions to pay for of­fice com­puter sys­tem


HOS­PI­TAL bosses dipped into their charity fund and trans­ferred mil­lions of pounds usu­ally spent on pa­tient com­forts such as chil­dren’s toys or arm­chairs to prop up its ail­ing fi­nances.

Cash-strapped NHS Tay­side used money do­nated by the pub­lic to bankroll a back of­fice com­puter sys­tem in 2014 af­ter run­ning out of money, The Her­ald can re­veal.

NHS Tay­side is al­ready un­der fire af­ter it emerged ex­ec­u­tives “cooked the books” for six years from 2012 by trans­fer­ring money ear­marked for ehealth – an um­brella term for dig­i­tal health­care – to a gen­eral fund to im­prove the look of its bal­ance sheet.

How­ever, in a move likely to plunge the health board into deeper con­tro­versy, it has now emerged at least £2.71 mil­lion was also plun­dered from its charity pot to cover gen­eral NHS run­ning costs.

Iron­i­cally, bosses used £2.3m of the charity cash to re­plen­ish the ehealth project they had al­ready raided.

It is un­der­stood the money was spent on a new IT sys­tem.

The charity cash was trans­ferred from a pot of money known as an en­dow­ment fund, which is made up of dona­tions from the pub­lic or be­quests in wills. It is ring-fenced for spend­ing on ex­tras such as toys for chil­dren’s wards, re­fur­bish­ing day rooms or buy­ing med­i­cal equip­ment not avail­able on the health ser­vice.

Us­ing it for rou­tine costs that should be funded from the core NHS bud­get is highly controversial, although NHS Tay­side has form for this prac­tice. In 2004, it was con­demned for tak­ing £400,000 from its en­dow­ment fund to buy new nurses’ uni­forms.

Pro­fes­sor Alan Boyter, a re­tired NHS ex­ec­u­tive who served on a num­ber of health boards in­clud­ing NHS Loth­ian – but never Tay­side – said: “One of the golden rules about en­dow­ment funds is you don’t ever use char­i­ta­ble dona­tions to fund Ex­che­quer spend­ing. The idea of the en­dow­ment fund re­ally is that it pays for the ‘ex­tras’ the NHS can’t pay for it­self.

“It pays for the Im­pe­rial Leather rather than the car­bolic, so to speak. [An IT sys­tem] is not an ap­pro­pri­ate use of the en­dow­ment fund.”

Pa­pers re­veal that when NHS Tay­side was “faced with a fund­ing deficit” in 2013-14, the trustees of the fund “were asked to ret­ro­spec­tively fund projects al­ready ap­proved by the [health board]” to the sum of £2.71m.

This was banned un­der the rules set out in the board’s own con­sti­tu­tion. As a re­sult, the con­sti­tu­tion was sus­pended for one month to en­able the trans­fer to go ahead.

Cur­rent chief ex­ec­u­tive, Les­ley Mclay, was in charge at the time and is un­der­stood to have sat in the meet­ing where this was signed off.

The Her­ald un­der­stands sev­eral trustees were “very un­com­fort­able” and chal­lenged the re­quest.

How­ever, the is­sue is com­pli­cated by the fact all ex­ec­u­tive and non-ex­ec­u­tive mem­bers of the health board au­to­mat­i­cally dou­ble up as trustees of the en­dow­ment fund. As the en­dow­ment funds are reg­is­tered char­i­ties, trustees have a le­gal re­spon­si­bil­ity to act in its best in­ter­ests.

How­ever, one NHS source close to the events said trustees came un­der pres­sure to put the board’s deficit first. The source said: “The trustees of the en­dow­ment fund are the same

peo­ple who sit on the board of NHS Tay­side. Although they try to wear a dif­fer­ent hat when they’re sit­ting there, ba­si­cally they were told on the day they au­tho­rised this trans­fer that if they didn’t, beds would be get­ting closed, wards would be get­ting closed.”

The source added the ac­tual sum signed off was £4.3m, but only £2.71m of it was spent in 2013-14.

The case also ex­poses a po­ten­tial frailty in the au­dit­ing of NHS Tay­side’s ac­counts. Another NHS Tay­side source said in­ter­nal au­di­tors from NHS Fife and Forth Val­ley ques­tioned how en­dow­ment fund cash was be­ing used, but were warned they risked los­ing their con­tract with NHS Tay­side un­less they backed off.

A spokes­woman for Scot­tish charity reg­u­la­tor, OSCR, said it would “con­sider” the case.

The cur­rent chair­man of NHS Tay­side, Pro­fes­sor John Con­nell, said, “I would stress the projects sup­ported were ap­pro­pri­ate for en­dow­ment fund­ing but the ret­ro­spec­tive de­ci­sion mak­ing el­e­ment of this will form part of the planned ex­ter­nally-led re­view of NHS Tay­side’s fi­nan­cial gov­er­nance.”

Pic­ture: Ste­wart Attwood

„ The cash came from dona­tions, which are of­ten raised by peo­ple tak­ing part in sport­ing events and chal­lenges.

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