NHS Highland details 'high risk' it will not break even this financial year
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NHS Highland says there is a “high risk” it will not achieve a financial break-even position by the end of this financial year – as it is legally required to do.
In a financial update paper due to be presented to the board Elaine Ward, the board’s deputy director of finance, also details how work is still ongoing to address a predicted budget gap of more than £16 million.
A financial plan submitted to the Scottish Government in March and approved by NHS Highland in May identified a gap at that time of £42.272m.
A Cost Improvement Programme addressed how to deal with £26m of that but the rest remains outstanding.
For a five-month period to the end of August this year an overspend of £17.683m is reported.
That is expected to grow to £33.6m by the end of the financial year.
To date “slippage” of £8.542m has occurred against the cost improvement plan.
This is forecast to grow to £12.225m by the end of the financial year.
In a more detailed breakdown of costs acute services – frontline care – overspent by £11.476m for the period.
Among particular pressures noted are the cost of employing locums (£7.122m), outsourcing of radiology services (£574,000) and drugs costs (£4.394m).
Social care is recorded as overspending by £4.824m and support services by £1.14m.
Ms Ward tells board members: “Scottish Government recognise the financial challenge on all boards for 2022/2023 but the expectation is that local savings plans will be delivered to ensure achievement of a break-even financial position, without Scottish Government support, by the end of the financial year.”
She adds: “There is a high risk that a break-even position will not be delivered by the end of the 2022/2023 financial year.
“A £26m CIP (Cost Improvement Plan) represents a significant challenge and closing the residual gap of £16.272m exacerbates this challenge.
“The board continues to look for opportunities both locally and nationally to close this gap.”
Among uncertainties the report notes that there are currently unused Covid-related funds still sitting with the board which may be reclaimed by the Scottish Government for redistribution.
The report states: “Further work is ongoing to finalise the vaccination delivery model and associated costs and it is expected that these will reduce from earlier estimates.
“Funding in respect of Test and Protect costs is currently being assumed (£1.853m) but there is a risk that this may not be available should the overall Scottish Government financial position worsen.”
