MSP surprised by FOI response on NHS Highland compensation payments

Highlands and Islands Labour MSP, David Stewart, has been surprised by an answer to his NHS Highland FOI on compensation payments to victims of bullying and harassment.

Mr Stewart asked for the full content of any legal advice taken before taxable payments were decided for any pay-outs to people who signed up for the Healing Process.

NHS Highland answered

“The advice was not received in any formal documents or emails, but was discussed throughout the set up and launch of the Healing process by those working on the administration and delivery of the scheme, which included our legal and taxation advisors from Shepherd Wedderburn.”

The MSP also asked for minutes of any NHS Highland meetings, including sub-committees, where Healing Process compensation payments were discussed

NHS Highland responded:

“The Healing Process compensation payments are an operational matter and have not been discussed in any such meetings.”

In December, after pressure from those going through the Healing Process and politicians including Mr Stewart, NHS Highland said it had written to HMRC to ask if payment could be made without tax and outwith its payroll system.

Mr Stewart lodged the FOI to see if he could find out more about the background to the earlier decision to use the payroll as he was concerned that no-one envisaged the problem with a taxable system.

“I must say I was taken aback by the answers that were given as decisions were made behind closed doors and not taken for discussion at any committee or board meeting,” said Mr Stewart.

“This was not discussing people’s individual cases, but just the system of payment. I know from previous NHS Highland answers that any case recommended for compensation has to go to NHS Highland’s renumeration committee for governance reasons, although no personal details of that case is revealed.

“It’s just a mystery therefore that there was no oversight of the compensation system.”

  • FOI response and also previous response from NHS Highland re remuneration committee

Did NHS Highland approach HMRC for advice about how it could pay those receiving compensation from the Healing Process?

As set out in the update to MSPs on Thursday 17th December, a detailed request was sent to HMRC on 14th December 2020 to review the status of the payments, based on the specific and detailed information in the healing process guidance and two sample recommendations from the panels which we provided.

Ahead of this, throughout the healing process co-creation, it was stated that payments were subject to applicable tax and national insurance. It was not explicitly stated how the payments would be made during the healing process coproduction discussions and guidance, although the inclusion of “subject to applicable tax and national insurance” was this was therefore to be paid through payroll

This was because the nature of the financial payments did not fall into any of the categories which would permit tax free status or to be paid outside a PAYE arrangement and this was discussed and reviewed with the accountable executive and the legal and tax experts from Shepherd and Wedderburn, at the point arrangements for payment were being set up as well as earlier in the process..

With the benefit of hindsight, it is clear that those involved had different assumptions of what this meant, but it wasn’t covered in any detail so it wasn’t clear until the payments were made that people had expectations that this would be treated in a different way both in terms of the process and the tax position. That has clearly been a learning for us, and we are sorry for any confusion that this may have caused.

If so, when was that approach made and what was the advice?

As above, this was request on 14th December and is currently pending.

If not, who did NHS Highland approach for independent legal and tax advice?

As above, Shepherd and Wedderburn have been advising on legal and taxation matters throughout the healing process set up.

What was the full content of that legal/ financial advice?

The advice was not received in any formal documents or emails, but was discussed throughout the set up and launch of the Healing process by those working on the administration and delivery of the scheme, which included our legal and taxation advisors from Shepherd Wedderburn.

I am also requesting minutes of any NHS Highland meetings, including sub-committees, where Healing Process compensation payments were discussed

The Healing Process compensation payments are an operational matter and have not been discussed in any such meetings.

I hope this response is helpful. If you are unhappy with my response, I am very happy to discuss this with you further. Alternatively you have the right to ask for an internal review by making a formal request in writing to the:-

Freedom of Information Officer

NHS Highland

Assynt House

Beechwood Park

Inverness, IV2 3BW

or via email High-UHB.FOIRequestsHighland@nhs.scot

What David Stewart and constituents were told by NHS Highland last year:

“The Healing Process has been fully coproduced with representatives of interested groups including the Whistleblowers and staffside and it has been approved by the Board and Scottish Government. This is now in operation and consultation on the design has ended. NHS Highland is a publicly funded body and any payments or financial commitments made by the Board must comply with Standing Financial Instructions and other Board and Government policy and be fully and properly scrutinised and audited. Any payments from public monies also have to comply with the appropriate oversight and governance standards – this is national not locally determined policy. There will be no circumstance under which public monies can be given to individuals without due process and consideration, and nor should there be. I would further point out that the remit and the required membership of the Remuneration Committee is set out in the national governance standards for NHS Boards, This is not open for individual boards to amend or alter.”