Health budget black hole
Time running out to plug shortfall in 2018 health budget
Only £540,000 of a £10.6 million savings plan by health chiefs has been raised to date, a quarter of the way through the financial year, a report has revealed.
Argyll and Bute Health and Social Care Partnership (HSCP) is currently operating with a planned expenditure for 2018/19 which is £12.2 million over its £265 million financial allocation.
Savings plans identified to date total £10.6 million but the HSCP must also find an additional £1.6 million to plug the gap in its budget.
The HSCP’s Integrated Joint Board met at Lochgilphead on Wednesday, when received the report from interim chief financial officer Lesley MacLeod.
The document states the gap is a ‘significant financial risk’ to the HSCP, along with partners Argyll and Bute Council and NHS Highland, who jointly manage the partnership.
Ms MacLeod’s report said: ‘The scale of savings planned to be delivered and the shortfall in identified savings presents a high level of risk in delivering financial balance for the partnership in 2018/19.
‘Planned expenditure exceeds the available budget by £12.2 million. There is therefore a requirement to achieve recurring savings of £12.2 million to achieve a balanced budget. Savings identified to date total £10.6 million. There is a remaining budget gap of £1.6 million with underdeveloped schemes to address.
‘The HSCP is currently pursuing delivery of a £10.6 million savings plan. Limited progress has been achieved to date in terms of declaring recurring savings. In fact, only £540,000 has been declared.
‘In addition, it must be remembered that there is a £1.6 million additional risk referred to above. It is acknowledged that this is a very significant level of savings to be delivered and that confidence in full delivery is low given the current level of achievement.
‘It is imperative, therefore, the reporting and monitoring of this programme is done in a very open and transparent manner with clear lines of accountability.’
Ms MacLeod’s report adds that the HSCP’s year-end forecast out-turn position for 2018/19 is a projected overspend of £4.4 million, which includes the £1.6 million budget gap. It says: ‘This is not acceptable and all efforts must be focused on significantly improving this forecast position.’
As well as the black hole in the budget, further risks include an increase in the cost of NHS Greater Glasgow and Clyde’s service level agreement and an ongoing reliance on locum psychiatrists.
The report adds: ‘It has not been possible to identify further savings in the timescale required which would be in line with the Strategic Plan and deliverable in the 2018/19 financial year.
‘Instead, an approach to financial recovery is proposed. This may be perceived to be a high risk approach in terms of delivering financial balance in 2018/19, but through tight financial management, including focused monitoring and reporting of the financial position and support to budget managers, benefits from cost control will go some way towards offsetting the savings shortfall.
‘It is clear that if there continues to be delays with delivery of service changes planned to deliver £10.6 million of savings during 2018/19, then financial balance will be unlikely to be achieved.’
The leader of Argyll and Bute Council called for healthcare savings to speed up – by the end of next month.
Councillor Aileen Morton said: ‘The update gives a sense of momentum, but momentum is not the sense I get from reading this report. With 25 per cent of the year gone, only five per cent of the target savings have been delivered. Is there any confidence that at our next meeting [Wednesday, September 27] there will be a substantial shift in that delivery?
‘We do need to see this as we have identified savings to get our long-term planning under control. It all does contribute but we do need to see planned savings coming.’