Council raises concern over predicted health overspend
‘IF A council department came back with a huge deficit like the one before us today, then we would be asking serious questions,’ was the assessment of Argyll and Bute Council leader Aileen Morton on the predicted £5 million overspend within the Health and Social Care Partnership (HSCP).
A meeting of the council’s policy and resources committee heard last Thursday that the HSCP was going into its first full financial year with an overspend of £2.966m in its first quarter.
A letter will be sent to the HSCP chief executive Christina West to raise concerns in ‘no uncertain terms ... at the escalating financial gap and the potential risk this brings to highly valued, essential local services, to the council and to the partnership itself ’.
The committee agreed to ‘seek confirmation from the HSCP board that a robust action plan will be put in place’.
Councillor Morton said she was ‘seriously concerned’ about the financial risk to Argyll and Bute Council from the escalating costs that may have to be found from its own budget.
Ms Morton said of the HSCP: ‘In common with all council departments in the context of significantly reduced funding, it needs to identify, manage and implement savings across all relevant service areas.’
A previous gap in funding was met by the local authority. At a budget meeting in February this year, the council agreed to provide a ‘one-off transitionary’ payment of £2.137 million.
The council heard the payment was over and above what the Scottish Government guidelines expected the council to provide.
The discussion on the HSCP’s current financial gap was raised when head of strategic finance Kirsty Flannigan said the projected £5 million overspend was a risk to the council.
Speaking of the financial risks to the council, Ms Flanagan said: ‘The risk is that the Integrated Joint Board (IJB) [the committee overseeing the work of the HSCP] refers back to the council for additional funding in the event there is an overspend and where a recovery plan has proved to be unsuccessful. If an additional payment is required from the council, this will be deducted from future years’ funding/payments.
‘As at June 30, 2017, the overspend apportioned to service provided by the council is £2.966m.’
A spokesman for the HSCP said: ‘It should be acknowledged that the current forecast overspend of £5m is the position in the first quarter of this financial year and this forecast position is reliant upon a number of assumptions around the current and expected level of service demand and costs, which are subject to change.
‘The forecast budget overspend also represents less than two per cent of the overall budget and the IJB achieved financial balance in 2016-17 through the successful implementation of a financial recovery plan. Undoubtedly, the scale of the financial challenge in 2017-18 is far greater, as the budget gap is greater and service changes become more complex as we transform health and social care services.’
He added that actions to address the financial situation have been identified, including:
Ensure the IJB continues to secure its expected funding from health and council partners.
Develop a detailed recovery plan – work has already started on this.
Continue to deploy management actions to identify efficiencies.
Continue to negotiate with NHS Greater Glasgow & Clyde to get a final agreement for the service level agreement for acute services with the expectation of releasing resources.