NHS Tayside faces 'extremely challenging' £50 million funding gap

NHS Tayside faces a funding gap of almost £50 million this year as its financial difficulties continue, a new Audit Scotland report has found.

Auditor General Caroline Gardner said the health board's "extremely challenging position'' would make it difficult for it to balance its books in the future.

It has already received several bailouts from the Scottish Government, with independent advisers appointed in March to help address its financial challenges.

NHS Tayside said it was "actively addressing'' cost pressures, and focusing on its five-year transformation programme.

It must make savings of £205.8 million over the next five years - including repaying government loans - to be financially sustainable in the long-term.

Audit Scotland found the board delivered £45.5 million of efficiency savings in 2016/17 - nearly double the savings achieved in the previous year, but still £1.3 million below its target.

Government loan funding of £13.2 million allowed it to break even that year.

A funding gap of £49.8 million is currently projected for 2017/18, with the board planning efficiency savings of £45.8 million.

The balance of £4 million will be provided by further loan funding, however Audit Scotland said there is a risk that more financial support will be needed.

NHS Tayside has received £37.5 million of loan funding over the past five years, with £33.2 million still to be repaid.

Ms Gardner said: "NHS Tayside continues to face an extremely challenging position which will make it difficult to achieve financial balance in the future.

"Some of the changes required to address these challenges will take time to fully implement. It's important that the board put in place a realistic action plan, accompanied by the capacity and resources required to deliver it.''

The board's chairman Professor John Connell said: "The board of NHS Tayside has always made it clear that it is committed to providing safe and effective healthcare, whilst acknowledging the challenges facing health services in the coming years.

"An ageing population, increasing demands on services and pressure on public finances means that the status quo for health and care services, both in Tayside and across Scotland, is not an option.

"Our priority remains the delivery our five-rear transformation programme which will fundamentally change the way we deliver health and care services in Tayside, and return to sustainable financial balance.''

NHS Tayside chief executive, Lesley McLay said: "We know we are spending more than our allocated share of the NHS funding in Scotland.

"We have the largest property footprint in the country, we use more agency nursing staff and we spend more on prescribing medicines. We are actively addressing all of these issues.

"We have already taken decisive action in 2017/18, including stopping the use of non-contract nursing agency staff in some areas, undertaking a wide-ranging programme of work to address prescribing costs, and identifying additional actions to close our financial gap".