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DRAFT MINUTE of MEETING of the ENDOWMENT FUNDS COMMITTEE
Board Room, Assynt House, Inverness / 8 August 2011–11.30 am

PresentMr Ian Gibson, NHS Board Vice Chair (In the Chair)

Mr Bill Brackenridge, Non Executive Director

Ms Pam Courcha, Non Executive Director

Mr Garry Coutts, NHS Board Chair (from 12.30pm)

Mr Mike Evans, Non Executive Director

Mr Malcolm Iredale, Director of Finance

Mrs Gillian McCreath, Non Executive Director

Mr Okain McLennan, Non Executive Director

Dr Vivian Shelley, Non Executive Director

Mr Ray Stewart, Employee Director

Ms S Wedgwood, Non Executive Director

Mrs L Wormald, Staffside Representative (from 12.00pm)

In AttendanceMr Iain Addison, Head of Area Accounting

Mr Crawford Howat, Catering Manager

Ms Donna MacKay, Project Director, RaigmoreHospital

Mr Colin McEwen, Senior Building Officer

Ms Elaine Mead, Chief Executive

Mr Brian Mitchell, Board Committee Administrator

Ms Alison Rodgers, Finance Manager, RaigmoreHospital

1APOLOGIES

There were no Apologies received.

2MINUTE OF MEETING HELD ON 4 JULY 2011

The Committee Approved the Minute of the Meeting held on 4 July 2011.

3MATTERS ARISING

There were no matters raised under this Item.

4APPLICATIONS FOR APPROVAL

4.1(a)Cafe Initiative, RaigmoreHospital

Mr I Gibson gave a brief introduction as to the previous deliberation of the Endowment Funds Committee in relation to the circulated application seeking loan funding in the sum of £241,000 to be used to fund the upgrading of the existing catering outlet at the main entrance of RaigmoreHospital. It had been agreed at the last meeting that in order to take an informed decision the Committee would need to consider the relevant business case, available options, and associated risks. There would also be a need to consult with all Endowment Funds Trustees on the proposal.

Ms D MacKay advised a recent survey of staff, patients, and members of the public had indicated issues in relation to food standards, ambience, and seating arrangements. All groups surveyed had indicated they would utilise the facility more frequently should there be improvement in these areas. There had also been received a number of suggestions for improvements indicating a high degree of interest in this proposal. Ms A Rodgers stated the current facility generated income of approximately £90,000 per annum. Consideration had been given to leasing the space to an independent provider however on balance it had been considered appropriate to maintain control over product choice and employment aspects. Both approaches had similar cost implications. Mr C Howat emphasised the proposal also sought to enhance the entrance to Raigmore, and that a recent environmental health inspection had highlighted issues requiring to be addressed in relation to ventilation and food storage temperature. The in-house approach would allow for more extensive menu choice. Mr C McEwen stated the facility was last upgraded in 2001 and as such the current timber unit and tile decoration was no longer fit for purpose. Given the need for remedial work the opportunity was taken to consider a comprehensive upgrade of the cafe and hospital entrance. Ms A Rodgers summarised by stating the current proposal offered the best option in terms of maintaining internal control and that the anticipated additional income would allow for repayment of the loan sum over a period of five years, at no cost to RaigmoreHospital. Discussion continued with Aroma on the possibility of the new facility being provided on a joint hybrid basis as an alternative to the completely in-house option.

During wide ranging detailed discussion, there was reference to a number of elements of the circulated Outline Business Case (OBC) and associated documentation. It was advised that the projected income had been based on conservative data provided by Aroma and the proposed longer opening hours. The view was expressed that as Trustees,Committee members were required to consider the proposal solely on the basis of the OBC presented and that at this time there were a number variables to be clarified including the service model delivery through an in-house, hybrid or outsourced approach. There was a need for clarification as to the underwriting of investment return, reliability of footfall projections, and the associated knock-on effect on the hospital Dining Room. Whilst it was acknowledged that a survey had been undertaken in relation to the proposals further consultation and deliberation was required through the Raigmore Governance Committee, and Local and Highland Partnership Fora. A number of Committee members suggested that a social enterprise model should also be considered. On the point raised relating to extended opening hoursit was stated that this would incur additional staffing costs of approximately £35,000 per annum. On the issue of projected income and loan repayment, Ms E Mead sought assurance that the stated payment profile could be achieved and was advised that those involved in the project were confident that the specified projected income had been conservatively estimated at this time.

Mr C Howat, Ms D MacKay, Mr C McEwen and Ms A Rodgers left the meeting at this point and members thanked them for their attendance and response to issues raised.

There followed discussion by Trustees on the general principle of investment of this nature and in particular the issue of risk versus return. There had been circulated, as a guide, a paper providing historic data on return on investment of NHS Highland Endowment Funds, this showing an average return rate of 7.8%. There was surprise among Trustees that an investment route had been chosen for this project as opposed to a straightforward bid for funding. However it was pointed out that as Trustees of the charity the Trustees are required to consider this potential investment within the parameters of making the best decision for the Endowment Funds as a separate entity from NHS Highland. There was general agreement of the need for upgrading of the existing cafe facility however clarity was required in relation to the guarantee of return.

After discussion, the Committee:

  • Agreed there be no approval of the proposal at this time.
  • Agreed the Raigmore Governance Committee, and Local and Highland Partnership Fora be consulted on the relevant proposals/Outline Business Case.
  • Agreed that the revised proposal must be clear as to the preferred option.
  • Agreed the need for clarification in relation to the guarantee of return.

4.1(b)Upgraded Chemotherapy Electronic Prescribing and Administration System, RaigmoreHospital

There had been circulated two applications seeking funding in the sum of approximately £101,000 from Restricted Funds within Raigmore Hospital to be used to fund the upgrade of the existing Chemotherapy Electronic Prescribing and Administration System. Mr I Addison advised that confirmation had been received that Fund RAICAN15 (Oncology New Suite Fund) could be utilised for this purpose. On the point raised it was confirmed that plans were in place/being established for reduction of the remaining Fund sum. On the issue of ongoing support costs it was stated that this would not be an appropriate use of Endowment Funds.

The Committee:

  • Approved funding from Restricted Fund RAICAN15.
  • Agreed further consideration be given to meeting ongoing support costs from outwith Endowment Funds, when the restricted Funds available have been fully utilised.

5ANY OTHER COMPETENT BUSINESS

There were no matters raised under this Item.

6DATE OF NEXT MEETING

The next scheduled meeting of the Committeewill be held on Monday31 October 2011 at 11.00am in the Board Room, Assynt House.

The meeting closed at 12.45pm

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