NHS bosses face 'difficult choices' as budget crisis deepens in Ayrshire & Arran
NHS Ayrshire & Arran may have a new face at the top, but the financial problems remain very familiar - with the warning of the difficult choices that may be required to address it.
Professor Gordon James, who has stepped in as Interim Chief Executive after Claire Burden took 'extended leave,' attended his first health board meeting since joining at the start of the month.
He was left in no doubt about the challenges facing the service, which is ready £11m overspent after three months of the financial year.
Finance Director Derek Lindsay told NHS Ayrshire & Arran Health Board that a projected shortfall of £33.1m was set out by the board in March, only for the Scottish Government to come back and demand this be cut to £25m.
But the figures made for familiar reading, with an overspend of £11.2m up to the end of June.
Last year the board had posted a deficit of more than £50m. However, a late change of heart from the Scottish Government meant that they would provide a loan for the entire shortfall rather than the £27m they had insisted on.
This year, no brokerage is available, with Ayrshire & Arran receiving an allocation of around £25m as part of a new sustainability payment programme.
While the board have maintained a projected deficit of £33m, the figure could be much higher if it follows the same levels of overspend as the first quarter.
Mr Lindsay said: "At the end of the first quarter, we're at £11.2m overspent. £7.35 million of the overspend has been in acute services."
He added that they were £2.1 million overspent on new medicines.
He also pointed out risks that funding for planned and unscheduled care hadn't been allocated by the Scottish Government.
"There is a risk that we invest extra funding, and this allocation might not be received.
"But we are working with the Scottish Government to try and get assurance around that."
The report drills down into the acute overspend with the high number of delayed discharges in acute hospitals a significant reason for overspend.
Other elements that have added to the overspend include unbudgeted costs for private ambulances to discharge patients and laboratory overspends.
NHS A&A have also failed to identify all of the cuts and savings required by the Scottish Government.
The Scottish Government has set a three per cent savings target termed Cash Releasing Efficiency Savings (CRES).
Although NHS A&A have identified more than £30m in savings, they are still £6.3m short of the requirement.
These savings are meant to be recurring rather than one off savings that only impact a single year.
Mr Lindsay said: "The recurring CRES target amounts to £30.2 million. But as yet, we've only identified £16.7 million, which is of a recurring nature, with the rest being of a non-recurring nature, things like reducing nursing agency, etc, is of a non-recurring nature.
"On a more positive note, year-to-date achieved savings are £5.7 million, which is in line with the plan.
"We are showing good progress on reducing both medical and nursing agency, in the first quarter."
Medical agency costs are down £150k compared to the first quarter of last year. while nursing agency costs have dropped by £650k.
Medical Director Crawford McGuffie said: "We were tasked in the last financial year with getting £1 million into additional medical spending.
"And the reason we have to have additional medical spending is that the workforce is not right sized."
Health Board member Joyce White said: "I suppose the challenge is we're not in line with the savings against the CRES target, which is going to further exacerbate the problem that we're facing [meeting the £25m deficit].
"So we're really going to have to move at pace to be able to deliver against the CRES target, but secondly, to come in against the more ambitious target that's being set by the Scottish government.
"I think we've got a huge challenge on our hands. In terms of how we're going to be assessed and to deliver on the financial requirements for this year.
Board chair Lesley Bowie said that the NHS A&A corporate management team were focused on work to realise the £25m deficit target.
She added: "At some point, difficult choices may well come to us as board members to try and put forward how we close that gap.
"And across the piece, it's not going to be a case of working around the edges any more."
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