Scottish health boards face financial challenge

03 October 2018 Seamus Ward

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Reports from Audit Scotland said NHS Highland and NHS Ayrshire and Arran were unable to deliver services within budget and had failed to meet savings targets. Financial sustainability would be difficult to achieve in the future, the auditor added.caroline.gardner l'scape

A significant proportion of their savings to date were non-recurrent.

NHS Ayrshire and Arran needed brokerage of £23m in 2017/18 and it was likely an additional loan of £22.4m would be needed in the current financial year. The auditor said the board would not balance its budget by 2020/21.

NHS Highland required a loan of £15m in 2017/18 and had an expected funding gap of £19m to £23m in 2018/19. The board is producing a long-term recovery plan, but the auditor expressed serious concern about the board’s ability to balance its budget by 2020/21.

‘Both NHS boards face significant financial challenges, and I have serious reservations about their ability to make the changes that are needed to achieve financial balance in future,’ said auditor general Caroline Gardner (pictured).

NHS Ayrshire and Arran chief executive John Burns said the board was committed to delivering safe, sustainable services within its budget. He added: ‘Financial sustainability has been an increasing challenge over recent years. This has been due to increasing unscheduled care demand, which has required extra hospital beds to be opened, as well as cost pressures, including new drugs and agency medical costs to sustain services. However, 2017/2018 was the first year that we received financial brokerage.’

Higher levels of cash-releasing efficiency savings had been needed in recent years. ‘These savings have been difficult to achieve and 40% of the £24.8m savings made in 2017/18 were non-recurring,’ he said.

An NHS Highland spokesperson said: 'NHS Highland’s financial challenges have been widely reported and we continue to work closely with the Scottish government as we develop plans to return to financial balance.'