NHS Highland bosses has found a £42 million “budget gap” needing filled by April – with extensive cuts and changes looming.
New budget papers going before its board next week have revealed the financial struggles the organisation is facing during the 2022-23 year.
They say plans are being drawn up for how they can save £26m – warning it will be “challenging” and poses a risk to services.
How the remaining £16m black hole can be plugged is currently under discussion with the Scottish Government.
Where are NHS Highland’s funding challenges?
Altogether the budget for this year includes around £246m in extra funding unavailable last year.
This includes cash from the Scottish Government to help tackle the likes of waiting times and drug deaths, and improve trauma network capability.
At the same time, rising costs and extra spending elsewhere mean chiefs are looking at a £288m bill.
Nearly £48m has also been earmarked for major projects including the new national treatment centre in Inverness.
Overall, it means they need to find £42,272,000 to balance the books by the end of the financial year.
2022-23 funding pressures breakdown:
- Pressures from previous years brought forward: £49.2m
- Pay rises: £16.8m
- Inflation: £23.8m
- Spending from anticipated allocations: £133.9m
- Covid spending: £31.5m
- ASC (adult social care): £20.5m
- Remobilisation: £11.9m
- Other pressures: £0.9m
How will the health board make savings?
Of the £42m gap in the NHS Highland budget, £26m will be found through a “cost improvement programme”, or CIP, which is currently being drawn up.
In previous years, the Scottish Government provided cash boosts to top up health boards hit hardest by Covid.
But the latest report says: “Funding will not be available for any slippage against the [cost improvement programme] in 2022-2023.
“The CIP, which is still being developed, will be challenging and the risk around delivery should be recognised.”
However, it has listed a “high level split” for the £26m project:
- North Highland: £18.9m
- Argyll & Bute: £4.1m
- Adult social care: £3m
What happens next?
The board papers note that the budget may be further stretched still.
With no new Covid funding available, it means bosses have to dip into council and regional savings to cover the costs.
It’s estimated this will add a further £8.3m gap in the budget.
NHS Highland’s board will meet on May 31, where members will be asked to discuss its financial position and approve these initial allocations.
Conversation