Watchdog issues NHS with financial health warning

Picture: Greg Macvean
Picture: Greg Macvean
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The NHS in Scotland has been warned it needs to plan its finances better as a report reveals a system struggling to cope with limited resources and growing demand.

Audit Scotland said that in the last financial year, pressures became more evident, with NHS boards forced to spend more on measures such as agency staff and sending patients to the private sector for treatment.

Audit Scotland noted in NHS Financial Performance 2012/13 that while NHS budgets had increased in cash terms – up 2.2 per cent to £10.9 billion in 2012/13 – taking inflation into account this amounted to only a 0.6 per cent rise in real terms.

The overall health budget is forecast to decrease by 1.6 per cent in real terms in the next three years, but the report noted significant differences between revenue budgets – covering day-to-day running costs and forecast to rise by 0.6 per cent – and capital budgets, for projects such as new buildings, which are predicted to drop by 61 per cent.

The report noted: “This is a challenging time for NHS boards. While budgets are getting tighter, demand for healthcare is rising due to an ageing population, more people with long-term conditions and the impact of factors such as increasing rates of obesity.”

While all NHS boards met their financial targets in 2012/13, with a small surplus of £16.9m, four had to borrow money from the Scottish Government.

This included £8m for NHS Lothian to improve waiting time performance after the scandal of manipulated waiting lists, and £16.6m for NHS 24 for changes including a new IT system.

Boards made savings of £270m last year in order to break even. However, 22 per cent of these were one-offs.

In the next financial year, boards need to make savings of £268m to break even – £69m more than previously predicted.

Audit Scotland urged the Scottish Government to consider moving away from making boards meet annual financial targets so they could better plan resources in the longer term.

The report said many boards were failing to hit key targets such as for cancer treatment, cutting bed-blocking and reducing waiting times. At the same time, there was a 62 per cent increase in spending on agency nurses, to £6.4m last year.

Spending on private sector healthcare increased by £14.8m in 2012/13 to £80.3m, with the biggest rise in NHS Lothian as it treated patients privately to tackle its waiting list problems.

The report also noted that meeting the Scottish Government’s treatment time guarantee – whereby patients have to start treatment within 12 weeks – would add further pressure to boards. It said extra use of the private sector was not a sustainable way of meeting such targets.

Caroline Gardner, Auditor General for Scotland, said: “The NHS has made good progress in improving health outcomes, with fewer people dying from heart disease, cancer and stroke, and a co-ordinated approach to improving patient safety. But the health service will need to change how it delivers services if it is to meet the substantial and growing demands it faces.”

Theresa Fyffe, director of the Royal College of Nursing Scotland, said: “Today’s report paints a picture of an NHS that is doing its best whilst creaking at the seams.”

Scottish Labour’s health spokesman Neil Findlay said: “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.”

Health secretary Alex Neil said: “Despite increasing budgets, it is right that the NHS is as efficient as possible with taxpayers’ money, which is why we have asked boards to make savings.”

The figures

133,205 Total number of NHS staff in 2012/13

£10.9bn Total amount spent by NHS boards

£17m Surplus in budget for 2012/13

£270m NHS savings in 2012/13

35% Amount of Scotland’s total public sector spending on health and well-being in 2012/13

62% Rise in spending on agency nurses in 2012/13 from 2011/12

23% Increase in spending on private sector compared to previous year, £80.3m


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