NHS Forth Valley: Tough times ahead for health board as it fails to reduce agency staff costs

Over the next five years, the health board expects to receive a “flat cash settlement” from the Scottish Government at a time when inflation and costs continue to be high.

Finance director Scott Urquhart told members of the board that delivering financial balance will be “extremely challenging”, as he presented a financial plan for the next five years.

The plan sets out an initial gap of £58 million for the first year alone – around eight per cent of the board’s baseline budget for the year ahead.

Around £40 million of savings have been identified, but that will still leave a gap of £18 million to plug.

The lack of cash is also affecting capital projects and all boards have been been told that no new construction projects will be supported in the next two years.

This is already having an impact on immediate plans for the redevelopment of the Primary Care estate and Falkirk Community Hospital master planning exercise.

The NHS knows that in order to get spending down, it will be vital to reduce staff costs.

But, so far despite all its efforts, NHS Forth Valley has not been able to reduce the number of agency staff it relies on or get rid of extra beds it has been forced to use.

Members of the board heard that the savings that have been identified are all ‘high risk’ and there are no guarantees they will be delivered.

Some of the high inflationary pressures include the cost of NHS Forth Valley’s PFI buildings.

There have also been huge price rises for drugs and therapies that are leading to higher treatment costs, while some IT costs have soared by 40 per cent.

There remains a lot of uncertainty over the future, including any wage rises that have not yet been agreed, although there is an expectation that will be funded.

The report to members makes clear that finding the savings to reduce that deficit “will require difficult decisions to be taken on priorities anddisinvestment going forward and it is recognised that this may impact on performance, including waiting times targets”.

There was some positive news in the most recent financial update for this year, however.

The most significant factor was receiving additional money from the Scottish Government, with Forth Valley’s share of the funding £8.2 million.

Mr Urquhart stressed that while the funding had helped them break even this it is all ‘non-recurring’, which means it will need to be found again next year.

“There are real risks going into the next financial year,” he said.