Concern over spiralling health care costs as Fife Council faces £10m shortfall

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Fife Council is entering 2025 budget talks with depleted reserves, spiraling health and social care costs, and a £10.6 million overspend from 2024 hanging over its head - but things could be worse

Cabinet Committee councillors were told last week that despite the shortfall, the 2024/25 financial position has actually significantly improved in the last few months - by some £3.3million. That’s a drastic improvement from the £18.6 million overspend predicted back in September.

It comes on the back of action taken within council services and directorates to reign in spending over the last several months.

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Eileen Rowland, executive director for finance, told councillors that the improvement is “anticipated and positive”, but more needs to be done to ensure progress continues.

Fife councillors were given an update on the overspend last week (Pic: Fife Free Press)Fife councillors were given an update on the overspend last week (Pic: Fife Free Press)
Fife councillors were given an update on the overspend last week (Pic: Fife Free Press)

“The scale of financial pressures on the council linked to the considerable cost pressures and service overspends going forward remain substantial and uncertain,” her report explained. “Directorates are taking action to reduce the levels of overspends and reductions in forecasted overspends can be seen across various services.”

Councillors were warned that a “significant overall overspend” is still expected around health and social care.

Ms Rowland said: “We’re currently projecting an £11.4 million overspend in this area and members will be well aware of the pressures linked to winter and issues in the hospitals at this point in time. I’m not confident this position will improve.”

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Thanks to the risk sharing agreement between Fife Council and NHS Fife, the council will only be partly responsible for covering any shortfalls in this area. However, it’s a “significant” risk for both organisations, and it’s been at the centre of discussions since autumn.

The cabinet was also warned that Fife Council reserves will be used to cover the current £10.6 million shortfall – leaving only £5.6 million for future use.

Ms Rowland said this was “below the policy position of holding balances of 2%, or £22.194m over a three year period.”

Council Leader, Councillor David Ross (Labour) said the position would be taken into consideration leading up to the new year budget session at the end of next month.

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