NHS Ayrshire has ‘no credible plan’ to meet £26m funding gap

The warning from Claire Burden comes as the Ayrshire and Arran health board faces a deficit of £53.5m in 2024/25, despite agreeing unprecedented cuts of more than £24m.

The financial crisis saw a starting deficit of £77.6m, as the board carried forward a deficit of £44m from the previous year, with no uplift in funding, an extra £18m in new cost pressures and a projected £10m overspend on new medicines, and £3.72m on servicing unfunded beds.

In the past the Scottish Government has provided brokerage, a loan that would be repayable once the health board was on an even footing financially.

The board has accrued brokerage of around £78m over the last three financial years, receiving £38.4m in 2023/24.

However, this year the Scottish Government has capped the amount they are willing to give boards who have already received support – in Ayrshire and Arran’s case a maximum  of £27.7m.

NHS Ayrshire and Arran's chief executive says there is "no credible plan" for the health board to make cuts of £26m (Image: Charlie Gilmour)

At a meeting of the board last week, finance director Derek Lindsay said that the deficit was £3m lower than last year, albeit it only after significantly higher savings than the £9m identified last year.

He said that the plan achieved two of the three requirements of the Scottish Government, namely an improved position on the previous year and makes three percent savings.

However, the Scottish Government cap would mean the budget requiring ‘major servicing’.

Mr Lindsay said that there was no risk in terms of paying staff and creditors if the board fails to balance the books.

However, a formal concern could be raised by the Scottish Parliament’s public audit committee.

North Ayrshire Council's leader, Councillor Marie Burns, highlighted the £24m in savings that have been identified by the NHS, raising concerns that there was a lack of detail in the report.

She pointed out that, as a councillor, she would expect to see more information around the potential impact of cuts on services.

NHS Ayrshire and Arran's chief executive says there is "no credible plan" for the health board to make cuts of £26m (Image: Charlie Gilmour)

Board member Joyce White agreed that all board members should have a breakdown of the proposed savings.

She said that the savings being asked for were three times what they were presented with last year.

“We are walking into [a position of] not being able to deliver because we are not going to get down to £27.7m anyway,” Ms White said.

“I am very nervous about delivering a budget like this.”

A number of board members also sought assurances that the situation was being raised with the Scottish Government.

Ms Burden replied: “We have been very clear to the Scottish Government that we can no longer afford to run services that are not funded.

Claire Burden, Chief Executive NHS Ayrshire and Arran. Image NHS Ayrshire and Arran. Free to use by BBC Partners

“I have personally written to the Scottish Government that we have no credible plan at the moment to close the £26m.

“We have been as transparent as we can about the budget. A funding solution is something we will have to continue to work with at a Scottish Government level.”

Savings include a reduction in the staffing of unfunded beds. However, NHSAAA says there are no plans to cut core staff and said they had no policy of compulsory redundancies.

Even with the unprecedented cuts of £24m, the board will fall far short of meeting the full projected deficit of £53.5m.

When asked what alternative options were being considered to address the remaining shortfall, Mr Lindsay would only say that "work continues to identify cash releasing efficiency savings".