THERE is a “significant risk” to the financial sustainability of NHS Borders, states a report issued on the health board last year.
According to an audit report for 2019/20 – published by the health board’s external auditors, Audit Scotland, in October – NHS Borders is facing a struggle to become ‘financially balanced’.
In response, a spokesperson for NHS Borders said that evaluations on the financial situation continue, but it is likely the coronavirus pandemic will cause “a further slippage to the delivery of savings”.
The audit report states that the region’s health board received £8.3 million in “brokerage” from the Scottish Government “in order to balance its revenue budget” for the financial year ending March 31, 2020.
Brokerage is described in the report as “an advance of funding from the Scottish Government which usually has to be repaid”.
Following the brokerage funds, NHS Borders recorded a surplus of £226,000 “against its core revenue resource limit (RRL) of £247.2 million”.
However, the report continues that “the financial stability of the organisation remains a cause for concern”. The report forecasts more government brokerage support for 2020/21, with the health board’s management reporting a £13.1 million deficit carried forward into the current financial year.
The report states: “The board has developed a three-year financial plan (covering 2020/21 to 2022/23), but this reports an unbalanced position and forecasts additional brokerage of £7.9 million will be required in 2020/21.
“Brokerage funding will be subject to repayment if a balanced position is not achieved in this three-year period.”
The report, made available to the public last month, adds: “NHS Borders will not achieve efficiency savings targets in 2020/21 based on the current assessment of its financial position.”
In terms of savings, NHS Borders was required to save £21.7 million in 2019/20 due to previous years’ deficits, which the report states was “partly” achieved – with £7.1 million of recurring savings and a further £2.9 million of non-recurring savings made.
The report states that £13.9 million of deficits were due to be carried forward into the current financial year, caused by “unachieved savings and continued financial pressures”.
NHS Borders’ response to the coronavirus pandemic was also considered in the October report, which states that battling the virus affected 2019/20 savings and will have a “significant impact” on the current financial year.
“No savings are reported as achieved in the five months to the end of August 2020,” the report states. “This is in part due to the re-prioritisation of support functions and the focus of clinical services being on the response to COVID-19 and subsequent remobilisation of services.
“Following review of the savings plans the board is only anticipating achieving £1.6 million of recurring savings in 2020/21 and these will be realised in the latter stages of the financial year.”
It adds that the financial impact of the virus needs to be assessed quickly if balance is to be achieved in the current financial year.
NHS Borders sent this newspaper a comment on the audit report.
A spokesperson for the health board said: “NHS Borders continues to evaluate the financial impact of the pandemic and to work closely with Scottish Government to ensure that the resources required to support essential service delivery during this period are available, including additional support to offset slippage against delivery of savings plans.
“At this stage we anticipate that the impact of the pandemic will continue to disrupt financial planning and service delivery during 2021, and it is likely that there will be further slippage to delivery of savings during this period.
“Financial plans for 2021/22 and beyond are currently being prepared and this will include assessment of the additional costs and potential opportunities arising from the impact of the pandemic on the NHS in Scotland.
“The board anticipates that it will continue to have a requirement for some element of financial support in the immediate future as it seeks to remobilise services and develop sustainable plans for a post-COVID operating environment.
“No timescales have been agreed for the repayment of financial support made available by Scottish Government.”
Last week, finance minister Kate Forbes outlined the draft Scottish budget for 2021-22.
Under the plans, NHS Borders is set to receive a cash boost of £2.9 million compared with last year, taking its total budget to £222.7 million in 2021/22.