£60 million of NHS debt to be written off by Scottish Government.

Scottish ministers offer new deal to bring financial balance and allow return to focus on patient care

The Scottish Government has promised a “new deal” for health boards after writing off hundreds of millions of pounds worth of debts.

Health boards, including NHS Tayside, that have overspent have been bailed out with loans from the Scottish Government known as brokerage.

NHS Tayside owes £45 million in brokerage and is expected to overspend by more than £17m this year. It has required bailouts every year since 201213.

Although the historic debts will be written off, health boards may still have to make cuts depending on the budgets they are given in future years.

Scottish Government Health Secretary Jeanne Freeman announced in a statement to the Scottish Parliament yesterday that all territorial health boards will be given clean slates at the start of the 2019-20 financial year.

Boards will also be required to set out their financial plans over three-year periods, rather than on a year-to-year basis as currently occurs. If the plans break even over this period, health boards will have the power to over or underspend by up to 1% in a single year.

Ms Freeman said writing off the brokerage debts will allow more money to be spent on patient care.

She said: “I am offering NHS boards a new deal. In return for their efforts to deliver the reforms for the future, I am facilitating a new three-year financial planning and performance framework for our NHS territorial boards.

“This change will require boards to deliver a break-even position over a three-year period, rather than annually as is the case currently.

“For this new deal to be successful I believe it needs a new start.

“So to give all our territorial boards clear ground to move forward on that three-year planning cycle, I will not seek to recover NHS territorial boards’ outstanding brokerage – the expenditure incurred by territorial boards over the last five years which has been above their budget.”

NHS Tayside chief executive Malcolm Wright said: “We very much welcome today’s announcement by the cabinet secretary which means we can focus our attention and the efforts of our staff on transforming our health and care services for the people of Tayside.

“The board has given a commitment to returning the organisation to financial balance and that, of course, remains a key goal.”

Dundee-based Labour MSP Jenny Marra received an assurance from Ms Freeman that the brokerage required this year would also be written off.

She said: “This is a hugely welcome announcement today for the Scottish Government to write off NHS Tayside’s debt of nearly £65m. What it allows is for a leadership team in NHS Tayside to start reforming our health service to meet the needs of patients in the community. We desperately need to modernise health services.”

Mid Scotland and Fife Conservative MSP Murdo Fraser said : “I hope today’s announcement gives NHS Tayside security to plan for the future whilst helping create policies that are not only good for the balance sheet but also good for patients.”

Fellow Conservative MSP Bill Bowman said: “It is important to get the finances back on a sound footing, but money alone will not solve the problems at the health board. There are deeper issues to be addressed.”

What it allows is for a leadership team in NHS Tayside to start reforming our health service to meet the needs of patients. NHS TAYSIDE CHIEF EXECUTIVE MALCOLM WRIGHT

Picture: Steven Brown.