News / Audit Scotland calls for longer term focus

By Seamus Ward

Scottish health boards broke even for the fourth year in a row in 2011/12, but the positive picture overall did not reflect the pressures faced by the boards, according to Audit Scotland.

A report on NHS Scotland’s finances, NHS financial performance 2011/12, said all 23 boards broke even, with a small combined surplus of £13.4m against £10.9bn in total spend. But it said that to break even, funds had to be moved across the NHS during the year. This was not clearly reported in boards’ annual accounts.

Auditor general for Scotland Caroline Gardner, said: ’The annual accounts show a picture of good financial performance, but this doesn’t reflect the pressure boards faced in achieving this. Money was moved between boards, several relied on non-recurring savings and some needed extra help from the government to break even.’

Audit Scotland said money was moved in a number of ways. The Scottish government provided brokerage to boards, either for a specific project or new service or to address a deficit, which will be paid back over future years.

The government can also make additional funding allocations during the year. Some boards returned surplus funds to the government when it was clear they would not spend them during the financial year. In some cases, the government used this money to support other boards.

Changes to service provision often needed upfront investment and Ms Gardner called on the government to consider whether there were other options that would promote long-term planning.

‘The requirement for boards to break even each year encourages a short-term view. The NHS needs to increase its focus on longer-term financial planning,’ she said.

The report added that boards’ ability to invest in new ways of working, as well as maintain buildings and equipment, was limited as capital allocations were declining.

Ongoing cost pressures mean boards believe they will need to make savings totalling almost £272m to break even in the current financial year. While all currently predict they will meet their savings targets, Audit Scotland warned this may become harder to achieve. Across the NHS 20% of savings plans are deemed high risk by boards themselves. The proportion of high-risk plans was much higher in some boards.