Six months into the financial year, and the health authority is already reporting a £15.868m overspend. That figure has increased by nearly £5m since the last report just two months ago.
The financial situation is deteriorating rapidly and a report from Maxine Michie, Deputy Director of Finance claims it is “highly likely” that the board will need the Scottish Government to step in and intervene.
MSP Willie Rennie (Lib-Dem for North East Fife) called the increasing size of the overspend “increasingly alarming.”
“Far from getting the deficit under control NHS Fife finances have deteriorated further,” he said.
The NHS Fife Board is due to meet next Tuesday, and ahead of the meeting agenda papers have revealed the current financial predicament.
“Despite ongoing attempts to reduce costs and a commitment to avoid any additional investment in our services, it is highly likely that the Board will require significant financial brokerage to break-even,” the report said.
The report looks at the board’s financial performance and financial sustainability from the start of the financial year (March 2023) until the end of September 2023.
Ms Michie said the most current financial position has “materially deteriorated” this quarter with “very limited progress” made towards the board’s cost-reduction targets.
She reiterated: “Given the position reported at the end of September, it is clear that the organisation will require a level of brokerage to deliver a balanced financial position, we maintain close contact with the Scottish Government in this regard.”
There are a number of reasons behind the overspend, but the increasings costs for medicine and staffing as well as cost savings delays are at the top of the list.
“The key reasons for the deteriorating position relate to the level of challenge associated with delivering the in-year savings target in full and an increasing level of spend generally on supplementary medical and nursing staff which is tracking significantly higher than last financial year,” Ms Michie explained.
Costs for supplementary staff are “increasing and ongoing” thanks to the levels of staff absence across NHS Fife services and the amount of pressure for acute services.
It also reflects the board’s limited progress to deliver the agreed £15m cost improvement programme.
Delivering the Scottish Government’s 3% saving and sustainability programme was key to the board’s 2023-24 budget.
However, Ms Michie said there has been limited progress to actually deliver the savings.
“At the end of September, progress to deliver on our cost improvement target has been very limited,” her report stated.
“While a lot of actions have been taken forward to create the infrastructure required to support the delivery of cost efficiencies, we are significantly behind which pushes delivery into quarters 3-4 of the financial year.”
Mr Rennie added more context to the board’s financial situation.
“The high staff sickness rates, mainly from poor mental health, is a symptom of the strain staff are under and this adds further to frontline services and also to the costs of finding replacement staff,” he said.
“Just this week I asked the Finance Secretary if she would step in to help the financial position in Fife before it impacted further on frontline services. Unfortunately, she refused to provide an answer so I will pursue this further with the SNP Government.”
The financial report and situation will be discussed in more detail at the NHS Fife Board meeting scheduled for Tuesday November 28.
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