Cash concerns as NHS Fife staring down the barrel of a projected £23 million overspend
Board members discussed the situation in more detail on Tuesday morning and "took assurance" from the situation.
NHS Fife Board members were told that the health authority’s finances have “probably never been under more strain” as they look at a projected £23 million overspend by the end of the financial year.
From the start of the financial year (March 2023) until the end of September the health board has reported an indisputable £15.868 million overspend.
NHS Fife Board members gathered for their regular bi-monthly meeting on Tuesday to discuss the financial situation and to “take assurance.”
The board report claims it is “highly likely” that the board will need the Scottish Government to step in and intervene.
“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,” the report stated.
The reasons behind the overspend are many and complex. The cost of supplementary staffing; ongoing Covid legacy costs; the ongoing costs of surge capacity – the NHS’ ability to handle patient/care influx; and the additional inflation and cost of living pressures all play a part.
NHS Fife has also failed to deliver its savings programme which was agreed in March.
Margo McGurk, the board’s Director of Finance & Strategy, explained that NHS Fife agreed the current financial plan based on a “number of savings assumptions.”
The plan relied on NHS Fife making delivering £15 million worth of cost savings measures across supplementary staffing costs and reduced surge capacity – the NHS’ ability to handle patient/care influx.
However, the medical authority has been unable to deliver those savings goals and it’s increasingly unlikely that they will come to fruition within the current financial year.
“We’re seeing some [savings] but nothing at the scale we need to deliver our original financial assumptions,” Ms McGurk told the board.
Some board members suggested that the financial plan had over-promised on savings and had been overly ambitious.
However, Ms McGurk explained that NHS Fife had no choice – the 3% savings goal had been handed down from Holyrood.
“The government advised all NHS boards that they needed to meet 3% savings priorities. There was a need to be ambitious. At the end of the day, we make these decisions and we have to stand behind them when you’re in the moment,” she said.
Acting board chair Alistair Morris encouraged board members and services to continue to look for savings opportunities – no matter how big or small.
“Lots of little savings could add up to £4 or 5 million which will make the Government feel a lot happier and it will make us feel a lot happier that we’re moving in the right direction,” he said.
Mr Morris said it is crucial for NHS Fife to look longer term to deliver the savings measures.
“It’s important to get our timescales right, and perhaps our original timescales were over ambitious,” he said.
“Looking at the time I’ve been on this board, we’ve gone from a stage where money was everywhere due to Covid to the opposite practically overnight,” Mr Morris added.
“That requires a culture change. We’re moving from having resources and thinking expansively to having nothing behind us and feeling exposed. It’s going to take time to make that culture change. In reality, that’s not going to happen in one financial year. We need to be realistic about these things and work through them.”