NHS Forth Valley: Health services facing £55m funding gap

Contingency beds that Forth Valley Royal Hospital has been using to increase capacity are one of the main targets to get spending down, finance director Scott Urquhart said in his report to the board.

Paying to staff the extra beds has been adding to the financial pressures facing the NHS as demand for services continues to be very high, while the cost and volume of medicines has also increased sharply.

Finding ways to reduce spending on agency staff – where costs have increased by 45 per cent to £35.5 million this year so far – is a key priority.

Agency and bank nurses are also covering staff absences, which remain high.

There are other pressures on the budget too, including high inflation, Mr Urquhart said, which has raised costs, especially for energy, premises and IT contracts.

In the current 2023/24, NHS Forth Valley faced a £40 million gap and a plan to deliver £25 million of savings was put into place.

Mr Urquhart said that the work to save the £25 million “remains broadly on track” and in fact the forecast overspend has reduced from £15.6 million to £10.3 million.

However, he warned, much of that was delivered through non-recurring savings and included moving £4 million from the capital to revenue budget.

“Flexibility is now becoming quite limited, so unless we start to see more rapid improvement or unless we get more money from Scottish Government – and there might be something extra in there for us – it’s becoming more difficult,” said Mr Urquhart.

The board should know in the next couple of weeks the final settlement from the Scottish Government.

But finding the £55 million savings in order to break even is “a very challenging and difficult position”, Mr Urquhart acknowledged.

It will continue be vital to continue to make savings but, he said, a “whole system approach” was needed to make this “sustainable and deliverable”.

“It’s important to look at root causes and not just tackle quick wins,” he said.

Solutions, he said, would have to be “radical and transformative” to meet the scale of the challenge, although he said “patient safety remains at the heart of everything we do”.

It would also be important to look at investing in early intervention and prevention to keep demand away from expensive acute services.

He said that work would continue to find ways that savings can be made without compromising good patient care.

NHS Forth Valley chair, Janie McCusker, said it was “a stark picture” but said it was important to “keep delivering quality health care”.

“We need to recognise the work the teams have undertaken this year to get us to this point, reducing that £40 million gap.

“The key thing is to have a plan in identifying the areas we need to concentrate on.”

She added: “Prevention might probably need investment so there will be lots of decisions to make.”