NHS Forth Valley facing huge challenges reducing £60m funding gap
Cash-strapped health chiefs are continuing to face huge challenges in bringing down their nearly £60million funding gap for the financial year, NHS Forth Valley heard at their Board meeting on Tuesday.
Initially, £58.4m (8.6 per cent of the baseline budget) was originally identified for 2024-25.
A range of cost improvement plans and efficiency initiatives were developed to mitigate the £58.4m gap as far as possible, with total targeted savings for 2024-25 estimated at £43.8m, leaving a residual deficit of £14.5m to be addressed (equivalent to 2.1 per cent of baseline budget).
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As previously reported to the Board, there is a significant risk that the deficit will reach £35m to £40m by 31 March 2025 (more than double the original projected deficit of £14.5m).
The month five results suggest that there is a significant risk that the deficit is likely to come in at the higher end of this range, despite a number of mitigating actions being put in place.
Finance Director Scott Urquhart said: “The key issue is we are continuing to take actions to mitigate exceptional financial pressure was much as we can.
“Every board is facing similar situations. This is not unique to Forth Valley. Everyone in Scotland has a similar set of issues.
“We are taking all actions to mitigate financial pressures and are continuing to focus on through our financial sustainability oversight board’s delivery of our savings plans
“We have sent direct communications to our budget managers in NHS Forth valley quoting areas of non-essential spend.
“We recently introduced a new weekly financial scrutiny meeting focusing on absences which are driving the level of increased spend unfunded posts and vacancies which we are trying to reduce as much as we can.
“We have also commissioned a review of our savings plan.
“The bottom line is we continue to project a deficit at year end of £35m to £40m largely unchanged from the previous update.
“Can it be bridged?
“It comes down to three key areas: How quickly we can safely reduce our workforce costs there in areas we identified unfunded posts.
“Second is our confidence in our ability to realise the financial benefits from all our other savings plans being delivered and the likelihood of any other Scottish Government funding.
“There is an Increasing level of focus on our financial position. Fifteen areas have been identified by finance to tackle some areas and there has been some progress.
"Reducing agency costs will deliver us big financial benefits.”