NHS Dumfries and Galloway’s new Chief Executive has described the ‘enormity’ of the financial challenge which lies ahead.
Speaking at Monday’s meeting of the NHS Board, Julie White welcomed a plan which includes 80 identified savings opportunities aimed towards saving £18.3 million in the new financial year – equating to five per cent of the Board’s entire annual operating budget.
But while the plan is expected to impact services in a way where effects will be assessed, managed and mitigated, and will require significant operational change, it does not yet go far enough to meet the expectations set out by the Scottish Government.
Mrs White said: “We need to be really clear that we’re asking Board to sign off this financial plan a time when, for the first time, the Scottish Government are not in a position to sign off this financial plan due to the fact that we’ve not reached a position which meets the brokerage cap.”
The brokerage cap is the maximum amount of money that the Scottish Government can lend to NHS Dumfries and Galloway to help manage its deficit.
Describing that situation as ‘unprecedented’, Mrs White noted that the plan currently identifies £13 million of savings – but this is still short of achieving the savings target of £18.3 million previously agreed by Board.
Mrs White said: “To reach that requires us to also identify the other £5 million or so of savings, which we haven’t already identified.”
And noting the maximum the Scottish Government will provide as a loan, or ‘brokerage’, she added: “Plus there’s the additional amount to achieve the £22 million brokerage cap which is greater than we ever would have delivered previously.
“It’s really important to highlight to Board members the enormity of this challenge.”
The 80 identified savings opportunities referenced in the financial plan span are split into different areas.
These areas and their savings targets are:
Service Optimisation (or productivity efficiency) – £1 million
Workforce Optimisation – £2 million
Medicines Optimisation – £4 million
Financial Control and Flexibility – £4.3 million
Service Redesign (or cash release efficiency) – £7 million
Introducing the Financial Plan at Monday’s board meeting, Director of Finance Katy Kerr said: “This would deliver us an outturn of a £32.9 million deficit, if all those savings are delivered in year.”
However, with the brokerage repayments due to begin when financial balance is achieved, Mrs Kerr added: “But that doesn’t include any repayment of any prior year brokerage – it just continues with our position as things stand.”
Mrs Kerr noted that the Scottish Government supports the approach being taken, and has taken reassurance from that approach, but cannot formally sign off on the plan as it does not meet its brokerage level of £22 million.
She said: “They’ve set out a level of detail in how we’re expected to continue to engage with the Scottish Government, engaging in the national work, and continue to work to reduce the position in terms of the deficit as much as we can.”
On Monday, NHS Board members agreed both the Financial Plan and also the new Annual Delivery Plan (ADP) – which have been combined into a single document that sets out the Board’s key intentions for the coming year within the financial parameters that it faces.
Introducing the ADP, Director of Strategic Planning and Commissioning David Rowland said: “We have a draft plan that I think we can be really proud of locally.
“I think it’s really important to emphasise that this is a single plan for NHS Dumfries and Galloway, in that it full aligns our service planning with our financial
Recovery plan. It is therefore a very realistic plan.
“It does as far as possible reflect the ask from Scottish Government, and it balances that ask with our ambition to do the best that we can with the limited resources that are available to us.”
With a longer-term vision and ambition for meeting health needs and improving population health, Mr Rowland added: “We’ve set out a context for change within this plan which again is very realistic.
“It sets that sense of where we are with our financial challenges, it reflects the growing demand for unscheduled care, the growth in waiting lists and waiting times that we’ve seen locally, and the reduction that we’ve seen in healthy life expectancy – and we recognise all of that has an impact on our staff and their resilience in terms of that what they do for us daily in the workplace.”
Mrs White welcomed the plan, and noted the advantage of combining the Annual Delivery Plan and the Financial Plan
She highlighted the importance of taking a joined-up approach to the financial plans and service plans, noting that the current financial challenges will undoubtedly have an impact in terms of what the Board is able to deliver over the course of the coming year.
