NHS Highland says its finances are “not a rosy picture” with a £33m savings target.
A report to the joint monitoring committee (JMC) of NHS Highland and Highland Council had set out a £42m budget gap – £16m of which it had no savings plan to close.
However, from the time finance bosses wrote the report to the date of the meeting, the numbers had drastically worsened. The year to date deficit has now slipped to £70.7 million. The health board has to find a way of saving £33 million at the same time as meeting its service targets.
To make matters worse, the health board was counting on using unspent reserves from last year. This includes £7 million of unspent Covid support money. But the Scottish Government has now said it will claw back any unspent money into the central pot.
Scottish Government wants a plan
Finance director Heledd Cooper said this decision will further deteriorate the state of NHS Highland’s finances.
“We’re being challenged by the Scottish Government to bring our £33 million deficit down to our original plan,” she told the JMC. “As part of that we’ve had to provide an initial draft of a recovery plan. That’s been put together really quickly.”
She continued: “We have to look across all our budgets and we will have to work as a partnership on how we bring the adult social care spend down.”
Earlier in the day, the JMC discussed the “turbulent” position of adult social care services in Highland. Highland Home Carers boss Campbell Mair made a plea to the committee: act now to to help the independent care sector, or it faces collapse.
Ms Cooper pointed out the difficulty in improving services and cutting budgets at the same time.
She said NHS Highland is missing around half of its service targets due to its finance problems.
NHS Highland could lose unspent Covid money
The NHS Highland board already faced a significant challenge. Like health boards across Scotland, it’s struggling to regain control of its money following the pandemic.
NHS Highland was in the red before Covid, but Ms Cooper warned the situation could now “deteriorate further”.
She outlined a reduced allocation as a major risk, together with the Covid reserve money it had previously banked on.
“Last financial year, our unutilised funding was carried forward in Highland Council reserves,” she explained to the JMC. “£7.1 million of that was Covid reserves which we intended to use as support for next year.
“We have now had a letter from the Scottish Government indicating they’ll be pulling back that reserve and reallocating it.”
Ms Cooper added that the health board doesn’t yet have details on exactly what that means. However, she said the implications are obvious.
“We are making it very clear to the Scottish Government that it’s already accounted for, and the return of that money will further deteriorate our financial position,” she said.
“It’s not a very rosy picture within our financial landscape.”
Members of the JMC offered their support in working towards a solution, but accepted that it’s a challenge with no easy answer.
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