Health board has debt written off in clean slate deal
NHS Ayrshire and Arran pledged to get its house in order this week after £45 million of debt, accrued over the past two years, was written off by the Scottish Government.
All Scottish health boards are having five years of debts, known as brokerage, written off as part of a ‘new deal’ for their financial planning but it was the rising debt of the board, which runs the health services on Arran, which sparked the biggest crisis.
The auditor general said NHS Ayrshire and Arran spent £859m last year and needed £23m in loans – and is expected to need a further £22.4m this year.
Health Secretary Jeane Freeman told MSPs last week that a new threeyear budgetary cycle will begin from 2019-20. If health boards are able to break even over the threeyear cycle, the boards will be given the flexibility to over- or underspend by up to one per cent of their budget each year.
This is a change from the current system of budgeting for one year at a time after auditors had raised concerns about the financial health of some boards, which have taken millions of pounds of loans from the government to break even.
The finance director at NHS Ayrshire and Arran, Derek Lindsay, told the Banner: ‘We welcome the publication of the mediumterm health and social care financial framework. This will allow NHS Ayrshire and Arran to develop its threeyear financial plan, which will now be unencumbered by having to repay brokerage received in 2018.’
The health secretary said the ‘new deal’ would allow health boards more flexibility in delivering quality care and allow more funds to be spent on patients, as the government will not seek to recoup brokerage paid to health boards in the past five years, effectively giving them a clean slate to start again.
Ms Freeman said: ‘For this new deal to be successful, it needs a new start. So, to give all our boards clear ground to move forward on that three-year planning cycle, I will not seek to recover NHS boards’ outstanding brokerage; the expenditure incurred by territorial boards over the past five years that was above their budget.
‘I want all boards to focus on delivering the measures set out in the Health and Social Care Delivery Plan and this financial framework, and to do so safely and appropriately, ensuring they maintain a strong focus on services to patients that is safe, effective, person centred and timely.’
Arran MSP Kenneth Gibson added: ‘In 2017/18, NHS Ayrshire and Arran received £23 million in brokerage from the SNP government to help achieve an in-year financial balance in the face of challenges such as keeping hospital beds open to manage demand that was not budgeted for. This debt – and that garnered in the preceding four years – will now be written off to give the board a clean slate for better, demand-responsive financial planning as it moves forward.
‘The SNP government will continue to engage with NHS Ayrshire and Arran and other boards to ensure that public funds are used to dispense the high quality health and social care that patients expect.’
West Scotland Conservative MSP Jamie Greene said: ‘I sincerely hope that today’s announcement will give NHS Ayrshire and Arran the security that it needs going forward and allow it to properly plan for the future.
‘Looking ahead, it will need to ensure that its policies are not only good for the balance sheet but good for the patients too. This is of paramount importance.’
Scottish Labour welcomed the new framework, with health spokesman Anas Sarwar saying it would give boards more time to plan their finances.
However, he questioned how much it would cost to write off loans which he said were needed due to ‘financial mismanagement’.