Budget pressures remain as NHS Forth Valley set to break even

Over the next three years, health services locally will be asked to find £38 million worth of savings to meet Scottish Government spending targets.

Finance director Scott Urquhart told the latest meeting of NHS Forth Valley that the service was in a “break even position” for both capital and revenue as it ended the financial year, thanks to substantial savings that have been made and extra national funding.

The improvement, he said, was “a really positive outcome given the system pressures we’ve experienced over the last twelve months”, as a bad flu outbreak and resurgence in Covid cases meant extra beds remained on wards in Forth Valley Royal Hospital longer than planned.

In addition to sustained high demand for health services, the NHS is also faced with increasing costs for medicines and devices (such as insulin pumps and continuous glucose monitors to treat diabetes).

Costs have also risen with continuing inflation which has impacted on things such as IT, energy and premises, while the settlement from the Scottish Government was “flat cash”.

NHS Forth Valley did manage to save nearly £13 million in staffing costs by reducing its use of agency staff, although absence rates remain higher than target.

Other initiatives to save money, such as careful control of prescribing and energy use, have also been introduced although members heard it is too early to say what the final impact will be.

Mr Urquhart warned members that despite the good work being done to make savings, “there continues to be a really significant, underlying, recurring financial gap”.

“That’s something that’s going to require to be addressed through additional savings and efficiencies,” he said.

His report noted that several services within the NHS did not manage to stay within budget, including Women & Children’s, which has an overspend of £4.8 million this year.

Acute services overall overspent by £25 million, as FVRH’s emergency department remains exceptionally busy.

NHS Forth Valley will also make contributions to the overspend by the Health and Social Care Partnerships in Falkirk and Stirling & Clackmannanshire.

The board also agreed approve a three-year financial plan proposed by the finance team after feedback from the Scottish Government.

The £38 million of savings that will be required over the next three years including £6.5 million on workforce; £2.7 million on prescribing; and more than £11 million on service design and reform.

The chair of NHS Forth Valley board, Neena Mahal, said: “It is really encouraging to see the progress that has been made and a huge thanks to everyone across the system who has really worked hard to help deliver the savings.

“But a phrase was used previously – gratitude but not complacency, because a difficult problem lies ahead of us that is going to be even more challenging.

“There are a number of area where we have not made the required savings and that’s going to leave us open to challenge going forward.”