CHARITY cash used to pay for new IT systems at NHS Tayside will be repaid, the new chairman has said.

Health board bosses were forced to step down last week after the Herald revealed that £2.7 million had been raided from NHS Tayside's endowment fund in 2014 and spent retrospectively on eHealth projects including telehealth and electronic booking systems which should have been funded from the core NHS budget.

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The endowment fund is made up of public donations and bequests and is strictly intended to fund items or initiatives that benefit staff and patients, but would not be covered by the NHS.

Health Secretary Shona Robison welcomed the move, confirming that it would be paid for by more brokerage loans from the government.

John Brown, NHS Tayside's new interim chairman, confirmed that board members had backed a proposal to reimburse the charity pot.

The plan was put to members of the NHS Tayside health board by Mr Brown and Malcolm Wright, the interim chief executive, during an emergency meeting at Ninewells Hospital in Dundee organised in the wake of the charity cash scandal.

Mr Brown said: “For our staff and our patients, we believe this is the right thing to do. The decision made by the Board today doesn’t pre-empt the findings of the formal inquiry into Tayside NHS endowment funds by the Office of the Scottish Charity regulator (OSCR).

"It does mean that we can move forward, start to rebuild confidence and ensure there are no distractions to continuing to do what we do best and that is making sure everyone in Tayside receives high-quality and effective care and treatment.”

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NHS endowment funds are registered charities regulated in Scotland by OSCR. The watchdog is carrying out its own probe into the decisions taken in 2014, when trustees of NHS Tayside's endowment fund were told that the health board was "faced with a funding deficit".

They were asked to agree to to transfer £2.7m from the charity pot into the exchequer, the health board's core funding stream in order to cover the cost - retrospectively - of IT systems and other projects the health board could no longer afford.

This breached the health board's own constitution which had to be suspended temporarily to allow the transaction to go ahead.

Sources close to the events told the Herald that trustees and other NHS staff who tried to challenge the move were "coerced and threatened" by NHS executives to cooperate.

Read more: NHS Tayside axed own rules to use charity cash to fund IT projects

They said that internal auditors who questioned the transaction were also warned they risked losing their contract with NHS Tayside if they caused problems.

At today's [Thu] health board meeting, Mr Brown and Mr Wright reassured members that "honesty and openness would be the overriding feature of all board business" in future.

It comes after Lesley McLay, the chief executive in charge at the time the charity funds were transferred, was forced to step down after Health Secretary Shona Robison said her position had become untenable. Chairman Professor John Connell also resigned, although he had only been in post since 2015.

NHS Tayside has struggled with its finances for years, receiving more than £40 million in bailouts from the Scottish Government since 2012 to help balance its books.

In March, it also emerged that its finance directors had been "misrepresenting" its accounts for six years by hoarding £5.3m of taxpayer-funded eHealth cash instead of spending it in order to make its finances look more favourable.

Mr Wright said he had spent the morning on a walkabout at Ninewells hospital meeting frontline staff.

He said: “I was able to see first-hand today some of the advanced professional roles which are leading the way here in Tayside and the level of teamwork on show was striking.

“There is lots of evidence of high quality care being delivered in Tayside and there is a real determination to deal with the challenges facing Tayside in an open and transparent way and a willingness to work together as an organisation.”