By Keith Aitken in Edinburgh | 10 October 2013
The health service in Scotland must tighten its long-term financial planning and change the way it delivers services if it is to cope with impending budget cuts, Audit Scotland said today.
Its report found that all 14 territorial, and 9 specialist, NHS boards in Scotland have performed well in meeting their financial targets, but that pressures are now building within the system as budgets are squeezed over the next three years and demand for services continues to rise.
The Scottish Government has resisted the market-orientated reforms imposed in England, increasing the overall health budget in real terms over the past decade to £10.9bn in 2012/13. Boards responded by meeting their financial targets in 2012/13 for the fifth successive year, delivering savings of £270m, a small surplus of nearly £17m, and improved patient outcomes.
But Audit Scotland warned that real-terms cuts of 1.6% are in prospect over the next three years, with a marginal 0.6% rise in revenue spend more than offset by a 61% real-terms drop in capital budgets and by growing demographic demands on health provision. Boards are also finding it harder each year to come up with new savings, the report acknowledges.
Auditor General Caroline Gardner praised the financial performance of the NHS in Scotland. She said it had made good progress in improving health outcomes, notably in relation to deaths from heart disease, cancer and stroke, and in respect of patient safety.
‘However, the health service needs to increase its focus on longer-term financial planning so that it is prepared for the challenges it faces,’ Gardner said.
‘The move to integrated health and social care services from 2015 will also be a significant change for the NHS and its partners. Strong longer-term planning and analysis are central to meeting these challenges.’
Recommendations include: more detailed spending projections and scenario planning; action to improve the accuracy of short-term savings forecasts and review forecasts against performance; and fuller reporting on movements in capital budgets.
The report also calls on the Scottish Government to reduce financial uncertainties for boards, and consider no longer setting annual financial resource limits so as to help with longer term planning.
It prompted an attack by Labour health spokesman Neil Finlay on the Scottish National Party administration. He claimed that the report showed the adverse effect of ‘SNP cuts’ and added: ‘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.’
