Fife’s Integrated Joint Board (IJB) have instructed senior officers to bring budgets back into line as “reasonably possible” as it heads for a current projected year-end overspend of just shy of £4.2 million - although what that means in practice remains to be seen.
The estimated price tag of tackling Covid-19 alone in 2021/22 is expected to top £32 million, with around £12.5 million already spent on various measures between April and September this year.
But while Scottish Government funding and reserves are likely to plug the deficit dealt as a result of Covid-19, board members will be told on Friday that the region’s health and social care partnership will not be able to fully eliminate the estimated £4.2m shortfall by March 31.
With that in mind, a medium-term financial strategy and recovery plan is being drawn up which will aim to wipe out the arrears over the period 2022/23 to 2024/25.
Chief financial officer Audrey Valente has stressed that “robust” financial management, service redesign and transformational change will all help, while proposed savings over the coming year will be focused on non-essential spend - such as reducing in travel and non-essential equipment - and won’t hit frontline services.
However, looking slightly further ahead, the prospect of more damaging cuts have not been ruled out.
“Should the measures above not achieve financial sustainability at the required pace, then consideration will need to be given to making difficult choices,” Ms Valente admitted.
“This will be the hardest to achieve as there might be a potential requirement for us to decommission current services that are not a main priority of the Strategic Plan.
“Therefore, the focus will be on efficiency, redesign and transformation to ensure that we are delivering the right services at the right time to the right people in the right place to best meet their needs with robust governance arrangements to monitor this.
“This medium-term financial strategy will consider the resources required by the Fife Health and Social Care Partnership to operate its services over the next three financial years and also estimate the level of demand and growth pressures likely to be experienced by these services.
“This will define the projected financial challenge and inform actions required to support financial sustainability in the medium term.”
In an update on Friday, IJB members will hear that around 85% of previously approved savings and funding options totalling £8.7 million should be realised this year, but that has already been factored into the estimated £4.2m shortfall.
Notable areas of concern include a £5.8m overspend on adult placements, and a £1.25m overspend on homecare services and older people’s care packages, largely due to increased demand and an increase in direct payments to service users to arrange their own packages.
Agency and staffing costs have contributed to a £330,000 overspend in residential and day care services, while there has also been a £510,000 overspend in hospital and long-term care, due to community hospital inpatient services continuing to spend on bank and agency nursing to cover vacancies, sickness and increased patient supervision.