Auditor General reports on significant financial challenges at two NHS boards

The Auditor General has reported to the Scottish Parliament that NHS Highland and NHS Ayrshire and Arran face significant financial challenges, which are likely to continue in the years ahead.

The reports note that these boards are unable to deliver services within budget, savings targets have not been met and it will be difficult to achieve financial sustainability in future.  A significant proportion of their savings to date have been one-off savings.

NHS Ayrshire and Arran required £23 million in loan funding, known as brokerage, from the Scottish Government to cover cost pressures. Additional loan funding from the Scottish Government will also be needed this year, with a projected shortfall of £22.4 million.

The report says that the board will not be able to balance its budget by 2020/21 and it has no plans to repay the loans to the Scottish Government. It needs to implement its Transformation Change Improvement Plan and act on the recommendations of an external review.

NHS Highland also required a loan of £15 million from the Scottish Government in 2017/18, with an expected funding gap of between £19 million and £23 million in 2018/19. The Board is producing a longer-term recovery plan, but the report expresses serious concerns about its ability to deliver planned savings and achieve a balanced budget by 2020/21.

Auditor General Caroline Gardner said:

"Both NHS boards face significant financial challenges, and I have serious reservations about their ability to make the changes that are needed to achieve financial balance in future.”

The Auditor General reports on the overall financial health and performance of the NHS in Scotland later this month.