A report from Audit Scotland warns that the health service in Scotland faces significant challenges and needs to tighten its long-term financial planning if it’s to cope with expected budget cuts in the future. The report made these recommendations despite finding that NHS boards across Scotland had performed well, all of them meeting their financial targets last year. Audit Scotland made the recommendation in a report on NHS finances despite all health boards meeting their targets last year.
The Auditor General for Scotland, Caroline Gardner, explained that the organisation’s financial performance “…was good in 2012-13, with all boards meeting their targets to break even and the service finishing the year with a small surplus. However, the health service needs to increase its focus on longer-term financial planning so that it is prepared for the challenges it faces.”
There are 14 territorial, and 9 specialist NHS boards in Scotland which, between them, spent £10.9 billion over the year, almost a third of the total Scottish budget. They ended the year with a surplus of £16.9 million and savings worth about £270 million. However, the auditors pointed out that 22% of the savings had been ‘one-off’ and similar levels would have to be found again next year. The worry is that the boards did not achieve their forecast levels of recurring savings. In Audit Scotland’s view, there will be a challenge in the future as it becomes harder to identity further opportunities to save money.
“While budgets are getting tighter, demand for healthcare is rising due to an ageing population,” it said, “more people with long-term conditions and the impact of factors such as increasing rates of obesity. This presents significant challenges for the NHS boards delivering services both now and in the longer term.”
So far, the Scottish Government has resisted the market-orientated reforms which have been introduced south of the Border. Instead, it’s increased the overall health budget in real terms over the past decade. The boards have managed to meet their financial targets for the past five years. But Audit Scotland warned that real-terms cuts of 1.6% are in prospect over the next three years.
The Auditor General praised the financial performance of the NHS, stressing that it had made good progress in improving health outcomes, notably in relation to deaths from heart disease, cancer and stroke, and in respect of patient safety. “However,” she added, “the health service needs to increase its focus on longer-term financial planning so that it is prepared for the challenges it faces. The move to integrated health and social care services from 2015 will also be a significant change for the NHS and its partners. Strong longer-term planning and analysis are central to meeting these challenges.”
Responding to the report, Scottish Labour’s health spokesman Neil Findlay said that it confirmed “everything we’ve been saying for the last few months about the increasing build-up of pressure across health boards because of SNP cuts. Audit Scotland have reinforced the need for an immediate review of the NHS so we can come up with a long-term plan that will support hard-pressed staff and ensure patients are properly cared for.”
However, the Health Secretary, Alex Neil, said that, despite increasing budgets, it was “right that the NHS is as efficient as possible with taxpayers’ money which is why we have asked boards to make savings. I want to be very clear that these savings are not a reduction in budget – all money saved will be reinvested in frontline services. This improves the quality of care patients receive.”