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Errors made in payment to former NHS Tayside boss Lesley McLay

Lesley McLay Image copyright Scottish Parliamentary Corporate Body
Image caption Lesley McLay was replaced as NHS Tayside chief executive in April

NHS Tayside has admitted errors were made in settlement payments to its former chief executive.

Lesley McLay received a package worth £90,000 after she was replaced earlier this year.

But a report for Scotland’s public spending watchdog said Ms McLay was paid for six months’ notice instead of the three months in her contract.

This meant she received £64,211 for her notice period rather than £32,105, the report said.

The auditors also said the health board mistakenly paid £19,135 in pension contributions to cover Ms McLay’s notice period, which she was not entitled to and which the health board will now attempt to recover.

NHS Tayside has also acknowledged that the decision to pay six months’ notice to Ms McLay should have been referred to its Remuneration Committee before being agreed.

The committee only approved the payment in November after auditors raised the issue with the health board.

Sick leave

The health board’s top management team was replaced in April after it emerged cash from a charity endowment fund had been used to pay for projects including a new IT system.

Ms McLay immediately went on sick leave before leaving the health board in July.

In its report, Audit Scotland said Ms McLay’s contract of employment included a notice period of only three months, but a decision was taken to increase this to six months when her employment ended.

The report stated: “The Assistant Chief Executive/ Strategic Director of Workforce and current Chief Executive believed this was required to bring parity with other chief executives across the NHS, but the board cannot provide evidence to substantiate this.”

The auditors said it had since been confirmed that the current chief executives of three territorial NHS boards and four special boards have contractual notice periods of three months, with the others having contractual notice periods of six months.

The report added: “The board’s assumption that the former chief executive’s notice period needed to be changed to bring parity with all other boards was, therefore, not correct.”

However, the report said NHS Tayside was correct to seek a negotiated settlement with Ms McLay, as the potential costs would have been higher if she had been sacked and responded by taking legal action.

Worsening performance

NHS Tayside has received Scottish government “brokerage” loans of £50.2m in the past six years, and is facing a potential budget deficit of £18.7m for 2018/19.

Audit Scotland said urgent action is needed to tackle worsening performance and finances at the health board, noting that it achieved just seven out of 20 national standards in March 2018 – down from nine the previous year.

The auditor general, Caroline Gardner, said: “NHS Tayside financial position has been unsustainable since 2013 and urgent action is needed to turn around the organisation.

“Changing the ways services are delivered will be critical in reducing NHS Tayside’s operating model and comparatively high staff costs.

“However, to date there is limted evidence of this happening, increasing the need for effective leadership to drive home the board’s plans for change.”

NHS Tayside chairman John Brown said he was “very disappointed” that the report “fails to recognise the progress” which had been achieved since April.

Mr Brown and acting chief executive Malcolm Wright were appointed to run NHS Tayside in April after the health board was put in “special measures” by the Scottish government.

Mr Brown said that, compared to last year, “improvements are evident” in financial management, leadership, governance, planning, and partnership working.

He said: “It is no secret that NHS Tayside has been through an extremely challenging period over the last few years.

“That is why I must take this opportunity on behalf of the board to pay tribute to all our staff who have diligently made sure that patients and service users have always come first.”

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