NHS Shetland chief executive Ralph Roberts has welcomed a draft budget announcement offering a "slightly better" than anticipated funding settlement for the health board.
A 1.5 per cent cash increase – expected to amount to around £700,000 – is below inflation, but Roberts said it would be important to get more detail particularly on how a pay rise for doctors, nurses and other staff would be financed.
Scottish Government finance minister Derek Mackay on Thursday set out a pay policy that will see public servants earning under £30,000 receive a three per cent rise after years of a stringent pay cap, while those earning above £30,000 will receive around two per cent.
Roberts said that was subject to recommendations from NHS pay review bodies and while he expects the outcome "will be very similar, it might be slightly different".
In addition to pay awards, he said the increased cost of drugs and new medicines, as well as rising demand as a result of the growing elderly population, would still leave NHS Shetland striving to find £10 million of savings in the next five years.
"I welcome the draft budget," Roberts said. "It will be helpful to be get more clarity as we work through that over the coming months.
"It is helpful that it is slightly better than we anticipated, but it's still important to recognise this requires us to make significant efficiency improvements if we are to continue to invest in our staff and things like new medicines.
"We know that health service inflation will run significantly more than 1.5 per cent."