05 December 2008
By David Scott
The NHS in Scotland faces challenging times because of smaller funding increases, efficiency savings and rising drug and fuel costs, a public spending watchdog has warned.
In its report published on December 4, Audit Scotland provided an overview of NHS funding for the past year and said the financial position of the service continued to improve.
For the third successive year, there was a small overall underspend – £26m on its £10.1bn budget in 2007/08 – and NHS bodies were less reliant on non-recurring types of income to meet financial targets. This income includes the sale of assets and using one-off government grants for day-to-day operating costs.
Auditor general Bob Black said the financial performance of the NHS was good during 2007/08 and the service continued to show a steady improvement.
He added: 'However, NHS boards should now prepare for some considerable challenges ahead. Future funding increases will be getting smaller at the same time as bodies are being asked to generate significant savings.'
The report added: 'Over the next three years, NHS bodies will receive a lower rate of growth in funding and will have to make greater efficiency savings.' NHS boards will also face continuing cost pressures such as new pay deals for staff, higher prices for drugs and fuel and the expense associated with reducing waiting times and service redesign, the watchdog stated.
It also pointed out that, in real terms, NHS funding in Scotland had increased by 28% since 2003/04 but would rise by only 4% in the next three years. Trusts would need to meet efficiency targets of 2% over the same period.
The study found that Scotland continues to spend more on health per head of the population than the rest of the UK.
Forecasts for 2007/08, showed that Scotland was due to spend £1,919 per head compared to £1,758 in Wales, £1,676 in England and £1,770 in Northern Ireland.
In the first annual report of the NHS in Scotland, published on November 28, chief executive Dr Kevin Woods said the service had made significant progress towards achieving its main performance and financial targets.
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