Tag: spending watchdog

Mounting financial pressures will force tough decisions on health and social care services, says Scotland’s spending watchdog

CONCERNS OVER IJB FUNDING GAP

Integration Joint Boards (IJBs), together with their NHS and council partners, must urgently take decisions on where to redesign, reduce or discontinue services.

Funding to Scotland’s 30 IJBs increased by over two per cent in 2024/25 to more than £12 billion. But this was insufficient to meet rising costs and demands, with many IJBs using dwindling reserves to help meet the almost £450 million gap between demand and available funding. This is not sustainable.

Increasing demand, rising costs and a growing number of people with long-term complex needs are placing mounting financial pressures on IJBs. The boards have reached a critical point, with a significant risk they will become financially unsustainable within the next 12 to 24 months.

Alongside savings and using reserves, IJBs have been relying on substantial additional funding from their partners in the NHS and councils. IJBs need to plan their finances more realistically to reduce this reliance, as health boards and councils face their own significant financial pressures.

Malcolm Bell, member of the Accounts Commission said: “The cost of delivering services is rising faster than available funding.

“Tackling this could include difficult decisions about redesigning or reducing services, and whether new or additional charges need to be made. Whatever decisions are made, service users, their families and wider communities must be consulted.

“But without radical change the services delivered by IJBs can’t be sustained. The gap between funding available and the cost of meeting demand is widening, and the gap of nearly £450 million cannot be bridged with savings alone.”

COSLA Health and Social Care spokesperson, Councillor Paul Kelly, commented: “The Accounts Commission report on Integration Joint Board finances for 2024-25 confirms the stark reality our Health and Social Care Partnerships face: that severe financial challenges continue to pose a risk to the sustainability of social care, which threatens the every day lives of our most vulnerable citizens and communities.

“The challenges also threaten the sustainability of our councils, who have continued to prioritise social care, with an additional £163m invested over and above Scottish Government funding in 2024-25. This level of additional funding is unsustainable for partners, but in many cases the only option given the diminishment of reserves held by Partnerships.

“The report makes clear the validity and need for our budget lobbying ask of an immediate investment of £750m in social care. We will continue to press the Scottish Government for this investment to avoid further cuts, reductions and increased charges in future.”

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Accounts Commission: Scotland’s councils risk becoming financially unsustainable

Whilst councils have made significant savings, the cost of delivering services is rising faster than available funding. This risks the financial sustainability of councils over the next three to five years, says public spending watchdog.

Although Scottish Government funding to councils has been increasing, this hasn’t kept pace with rising costs and demand. Councils are overspending on delivering services and borrowing more.

In its latest update on council finances, the Accounts Commission report that councils face a budget gap of nearly £1 billion by 2027.

In 2024/25, councils met 90 per cent of their savings targets. But for the first time in six years, they reported a collective overspend on the costs of delivering services. Debt levels are increasing. Many are relying on reserves.

Whilst councils are increasing the amount of money they raise through fees and charges, income generated isn’t keeping pace with rising costs and inflation.

With Scottish Government funding to deliver capital projects falling, councils are also taking on more debt to deliver local infrastructure projects such as building schools and housing.

Derek Yule, member of the Accounts Commission, said: “Despite increased funding and income, councils are struggling to cope with the financial pressures they face. A growing gap between costs to deliver services and funding available is risking the financial sustainability of councils.

“We’re already seeing the impact on services – the pace of improvement is slowing, some services are being cut or are harder to access and there are growing levels of dissatisfaction from communities. Councils must fundamentally reconfigure how they operate and deliver services.”

Commenting on the report, Cllr Ricky Bell, COSLA Spokesperson for Resources, said: “While we acknowledge increases in uncommitted funding in the local government settlement, today’s report reinforces the message that local government finances are under severe and growing strain.

“Councils have worked hard to manage budgets responsibly, delivering significant savings year on year and meeting the vast majority of savings targets. However, there is a clear limit to what can be achieved without impacting the services communities rely on. Increasing reliance on reserves, borrowing and fees and charges is not a sustainable long-term solution.

“As we look ahead to 2026/27, the budget settlement falls far short of what is needed to sustain essential local services without difficult decisions being made locally.

“We are especially concerned by the continued underfunding of social care and the Real Living Wage across portfolios.

“The medium-term outlook for local government is deeply concerning, with continued de-prioritisation and the prospect of significant real-terms cuts. If councils are to remain financially sustainable and continue delivering for communities, there must be a more honest conversation about funding, priorities and local flexibility.

“Urgent action is needed to ensure councils have the resources and certainty required to support Scotland’s people and places now and in the future.”

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Audit Scotland: Full transparency on NHS recovery needed

The Scottish Government needs to be clearer about how long it will take the NHS to recover from the Covid-19 pandemic and to reform services, says public spending watchdog Audit Scotland.

The government’s NHS recovery plan aims to reduce the healthcare backlog and change how services are delivered. But the plan does not contain the detailed actions that would allow progress to be accurately measured. It also lacks robust modelling to understand demand and capacity. The backlog has continued to increase in the 18 months since the plan was published as the NHS deals with a range of pressures.

Workforce capacity remains the biggest risk to the recovery of NHS services. Health boards are continuing to find it hard to recruit the doctors, nurses and other health professionals needed to make sure NHS services are sustainable in the long-term. Key recruitment targets, such as recruiting 800 GPs by 2027, are unlikely to be met. The NHS workforce remains under severe pressure and there are concerns over staffing levels, wellbeing, and retention.

The Scottish Government is moving ahead with the innovation and reform essential to NHS sustainability. But it is too early to gauge the impact of this work. In the meantime, every NHS board is facing significant financial challenges which could limit how much they can invest in recovery. And the Scottish Government also needs to make information on how long people will have to wait for treatment clear and meaningful.

Stephen Boyle, Auditor General for Scotland, said: “NHS staff remain under severe pressure and the Scottish Government is facing tough choices.

“Money is tight but investment is needed in recovery. That means ministers have to prioritise which NHS aims can realistically be delivered. And they need to be more transparent about the progress they’re making.

“The Scottish Government has set out the big challenges facing the NHS. But it also needs to clearly explain to the public what those challenges mean for the level of service they can expect, including waiting times.”

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