A struggling health board is “on the road to recovery” but still needs to make major changes, a new report has said.

An advisory group set up to help NHS Tayside said it had “made progress” towards meeting 10 recommendations for improvement that were set out in June 2017.

As a result, Health Secretary Jeane Freeman announced the board’s ranking on an NHS performance scale had been upgraded from five – the lowest level – to four.

Health boards who achieve this grading on the NHS Board Performance Escalation Framework are still classed as having “significant risks to delivery, quality, financial performance or safety” with “senior level external support required”.

Ms Freeman confirmed the change in ranking after receiving the latest update from the NHS Tayside Assurance and Advisory Group, led by Professor Sir Lewis Ritchie .

It stated: “While we are of the view that NHS Tayside is on the road to recovery, much more needs to be done: encouraging incremental change has happened but transformational change still beckons and is imperative.”

The health board has made “substantial improvements in controlling and reducing expenditure”, the report said, with the monthly overspend down by more than 20% from £1.9 million per month between April and June last year to an average of £1.5 million from July 2018 to January 2019.

It is currently on track to make efficiency savings of £32.2 million in 2018-19 – some £2.8 million more than its target figure of £29.4 million.

Ms Freeman said the report “demonstrates the progress that NHS Tayside continues to make in key areas”.

She added that the interim leadership team of chairman John Brown and chief executive Malcolm Wright  had “stabilised finances, improved governance and changed the way services are planned and managed by putting clinicians at the heart of decision-making”.

Ms Freeman said: “On the basis of these encouraging results, it is the right time to bring NHS Tayside into line with other boards in a similar position and re-designate it as Stage 4 in the Board Escalation Framework.”

But she stressed: “This is just the start of the journey for the new chief executive Grant Archibald in making services the best they can be for patients of NHS Tayside.

“We will continue to work closely with the Board in achieving its aims over the coming months and years.”

Sir Lewis, the chairman of the NHS Tayside Assurance and Advisory Group, said: “It has been a real privilege to support the recovery of NHS Tayside and I am confident, from their progress to date, that they have a sound foundation for the improvements that are now required.”