Large Black Hole in NHS Fife’s Finances

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NHS Fife is struggling financially, as are other NHS Boards in Scotland. In March, the Health Board was forced to ask the Scottish Government for a £11 million loan to break even, but its finance director is forecasting a £29.8 million overspend for the coming year.

Introducing her report to the Board last week, Margo McGurk, NHS Fife’s director of finance and strategy, explained “This is a really challenging financial position,” on Tuesday. “It’s our job to respond to situations as effectively as we can, but it’s absolutely clear that some difficult decisions and choices face us if we are to be successful.”

Over the past year, the Board failed to achieve its £15 million saving programme, and costs for acute services and external agency staff have spiralled upwards.

In the coming year, NHS Fife will be required by the Scottish Government to deliver approximately £25 million of recurring efficiency savings, and future brokerage loans from the Scottish Government have been capped at £5 million – and will reduce further in future years.

More than half of NHS Scotland’s 14 territorial health boards will require brokerage loans on current projections for next year. By 2024/25, the total amount boards owe to the Scottish government will be in excess of £380m.

The Scottish Government has said it cannot approve NHS Fife’s current 2024/25 financial plan since, even with a £25 million cost savings programme, NHS Fife is predicting a £30 million deficit by next March. To address this and get Scottish Government approval, the Board will be forced to make an additional 4% of savings.

There are also £100 million worth of maintenance backlogs across the health board estate.

“There are two specific things we absolutely have to do as an organisation,” Ms McGurk explained. “The first is to deliver in full a 3% recurring savings and the second is to work through the details of the additional [steps] necessary to deliver 4% savings as far as possible.”

She continued: “Notwithstanding that, we have to deliver our financial targets, and we have to do all of this safely and at pace.”

NHS Fife will deliver its financial improvement plan through what it calls a “Reform, Transform and Perform” framework.

This will include immediate changes across the organisation; evolving NHS services, structures; and driving sustainable improvements throughout the organisation.

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