NHS Highland health board risks £16.4million overspend
NHS Highland risks missing its target of breaking event at the end of the financial year by around £16.4 million – and we are being warned the situation could get worse.
NHS Highland risks missing its target of breaking event at the end of the financial year by around £16.4 million – and we are being warned the situation could get worse.
In a report prepared for NHS Highland’s board meeting on 26th July, director of finance Nick Kenton will state that the board overspent its revenue budgets by £4.3 million in the first quarter of this financial year.
He will add: “There is a risk that the board may not meet its year-end target of breaking even on revenue – this risk has been currently quantified in the region of £16.4 million. In addition, there are around £6.1 million of further financial risks that may crystallise in the remainder of the financial year.”
Mr Kenton will ask the board to confirm that it is content that actions are being taken to ensure that the target of break-even is achieved.
The director will explain that the effective management of pay budgets was a “key challenge”. Locums or agency staff were being used in number of hard-to-fill vacancies, with costs tending to exceed the salary budgets available – often by a “significant amount”. These excessive costs meant that savings had to be made elsewhere.
Mr Kenton will state that efforts were continuing to achieve break-even, and he will list a range of actions being introduced. These include a review of commitments in non-clinical areas, which could save £2 million and cost reduction programmes in north Highland (£2.4 million) and Argyll and Bute (£1.5 million).
Collectively, successfully applying these measures would still leave a £7 million shortfall, which the organisation was looking to address through “significant improvement initiatives, changes in footprint and service delivery models”.
Mr Kenton’s report concludes that NHS Highland continues to project a break-even position “whilst recognising the significant challenges faced in delivering this”.
The board will also be told that it underspent its capital budgets by £0.65 million in the first quarter of the financial year.