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Health spending arrangements should give boards greater stability

Health secretary Jeane Freeman MSP. Photo: Hans J Marter/Shetland News
Health secretary Jeane Freeman MSP. Photo: Hans J Marter/Shetland News

A SCOTTISH Government announcement on health spending over three years has been welcomed by the chairman of NHS Shetland.

Gary Robinson said that the three-year financial framework announced in Holyrood by health secretary Jeane Freeman on Thursday (4 October) should give the NHS the sort of planning certainty that has been lacking.

Robinson said that he looked forward to seeing the exact extra money for Shetland implied in Freeman’s announcement of an extra £3.3 billion Scotland can expect for its health service owing to a Barnet Formula windfall that would follow from extra funds for the NHS in England and Wales.

He said between that and a one per cent annual flexibility on spending area health boards will be allowed from 2019/20, when the “mid-term financial framework” will be applied, the developing hole in NHS Shetland’s finances should be shored up.

Robinson said: “This certainly is a welcome announcement and the fact that we are having a three-year framework is very helpful. The health service as much as local government has been struggling along with one-year settlements which makes planning and change difficult.”

In her announcement, Freeman said: “Today I am offering NHS boards a new deal. In return for their efforts to deliver the reforms for the future I am facilitating a new three-year financial planning and performance framework for our NHS territorial boards.

“This change will require boards to deliver a breakeven position over a three-year period, rather than annually as is the case currently. In each year boards will have a one per cent flexibility on their annual resource budget to allow them scope to marginally under or over spend in that year.

“For this new deal to be successful I believe it needs a new start. So to give all our territorial boards clear ground to move forward on that three-year planning cycle, I will not seek to recover NHS territorial boards’ outstanding brokerage – the expenditure incurred by territorial boards over the last five years which has been above their budget.

Tavish Scott has criticised the deal

“I want all boards to be able to focus their attention on delivering the measures set out in the Health and Social Care Delivery Plan and this financial framework, and to do so in a safe and appropriate way – making sure they maintain a strong focus on patient care and the delivery of the services to patients that is safe, effective, person centred – and timely.”

The latest figures from NHS Shetland are for a £1.835 million overspend in the financial year so far. This is dwarfed by the likes of an £18.7m debt projected for NHS Tayside which will be written off along with all “brokerage” debt that has been incurred by health boards prior to the commencement of the new deal.

The estimate for these brokerage debts across Scotland was about £150m. But it was necessary for boards to be given “clean ground” if the framework was to succeed, Freeman added.

Robinson said: “The main thing we were looking for was around having some sort of medium term arrangement. Three years takes us up to the end of the current government and one government cannot legislate for the next.”

Robinson also drew encouragement from Freeman’s acceptance of the extra demands facing the likes of the heavily overspent Highland NHS and said that Shetland had even bigger bills from travel and accommodation for locums, a point that will be raised at forthcoming meetings.

Freeman emphasised that the extra money would not be enough to meet the growing price pressures caused by medicines, rising demand and rising expectations, therefore service restructuring was vital if the three-year framework was to be adhered to.

Shetland MSP Tavish Scott said that the government announcement was “smoke and mirrors” with health boards expected to set indicative budgets while having no guarantee of the funding that they would be receiving.

He added that while scrapping brokerage debt was welcome, there needed to be some mechanism for addressing the financial deficit facing the likes of Shetland and health boards across Scotland that had not entered a brokerage deal with the government.