NHS boards facing £22m bailout as they struggle to make cuts

Scotland’s public spending watchdog has expressed “serious reservations” about the finances of two health boards, which could both require to be bailed out with £22 million of government cash.

Auditor General Caroline Gardner spoke about the “significant financial challenges” that both NHS Highland and NHS Ayrshire and Arran face.

NHS Highland needs to make more than £50m in savings, but has an increasing number of high earners amongst its staff, Audit Scotland said.

It could need a brokerage loan from the Scottish Government of between £19m and £22m to balance the books for 2018-19. NHS Ayrshire anticipates it will require £22.4m in brokerage, although the spending watchdog warned it might require more.

Ms Gardner said: “Both NHS boards face significant financial challenges and I have serious reservations about their ability to make the changes needed to achieve financial balance in future.”

The Audit Scotland reports were published days after senior medics in NHS Highland complained of a “longstanding culture of bullying”, although the medical director there insisted he did “not recognise” this.

The report said NHS Highland had eight clinical staff employed with a salary of more than £200,000 a year, including two earning in excess of £400,000.

Annual reports and accounts showed “the number of clinical staff earning a salary of greater than £200,000 per annum has risen to eight individuals (previously four) and of these eight, two are earning in excess of £400,000”, according to Audit Scotland.

The health board needs to make cuts of £52m in 201819, with the report warning of a “significant risk” that bosses would fail to meet this target, with only £30m of savings having been identified by August this year.

Meanwhile NHS Ayrshire and Arran anticipates it will need a £22.4m brokerage loan from the government this year. This was after it came under financial pressures in 2017-18 when it also required £23m from the government.

John Burns, chief executive of NHS Ayrshire and Arran, stressed the board was “committed to delivering safe, sustainable services”. He said financial sustainability had been an “increasing challenge” recently, but the board was now going through a “transformational change programme” to redesign services.