NHS Highland faces a £42.3m financial gap this year, as a mix of uncertainty around covid-19 spending, inflation and brokerage options has left every health board in Scotland in a deficit position.

The board’s Director of Finance, David Garden said 2021-22 panned out “as difficult as the year before” with covid-19 expenditure making it, in common with most boards in Scotland, impossible for NHS Highland to meet last year’s cost saving target.

This year will see NHS Highland overspend by £16.2m, even if it were to meet its “not unreasonable” cost improvement target of £26m, according to its one-year financial plan submitted to the Scottish government in March.

Mr Garden told a meeting of the board last week that the ability to get brokerage – government funding to help keep boards in the black – in 2022-23 “remains uncertain” and discussions are ongoing with the Scottish government.

Scotland’s Social Care Minister, Kevin Stewart, this week said boards will “shortly” be notified of support that will be available over the next 6-12 months and which boards will be offered additional help.

NHS Borders, Fife, Forth Valley, Highland, Lanarkshire, Lothian and Tayside are all currently in receipt of enhanced support, though this is not necessarily financial in nature.

National policies, including raising pay in the public sector, are seen as key risks to overspending.

Mr Garden said extra money announced for primary care, mental health services and drug deaths has not yet been allocated by government.

Covid-19 costs have also been identified as a key risk, with money placed into reserves last year to cover pandemic-associated spending likely to fall short. He said:

“The assumption of, I think, £32m of covid-19 costs in year is included within the plan. And actually the funding that’s available to us that is being held by government or council or Argyll and Bute IJB is some £8m less than that. So really there’s a potential risk that covid-19 expenditure will exceed any covid funding in 2022-23.”

The funding gap, according to non-executive director of NHS Highland board Councillor Alasdair Christie, “looks to be one of the worst gaps we’ve actually got to deliver on” as he requested more assurance on actions being taken to address the challenges.

The board has "typically struggled" with an overreliance on non-recurring savings, according to a partner at external auditors Grant Thornton, though PwC assistance has helped the board hit more of its financial targets in recent years.

Mr Garden added that the Scottish government are taking the cost pressures facing health boards in Scotland “very seriously” and are currently looking at developing a national workstream “to try and look at the ways we can all work together and look at solutions”.

Professor Boyd Robertson, Chair of NHS Highland, told the meeting he and the other board chairs remain “deeply concerned” about the situation, and were meeting later with the Health Secretary prior the publication of the spending review:

“It has been a feature of discussions at the chief executive level and on the chairs level.”

The Scottish government has committed to spending £73.1bn in health and social care, as well as increasing investment in frontline health services by 20%, between now and March 2026.

 

Read more: Watchdog: NHS ‘unsustainable’ before covid ; Cash-strapped board warning over new medicine costs; “Stability” in senior team sees board finances improve

 

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