Councillors explain major swing in health spending

A councillor sought information on why the partnership (HSCP) reported a £2.6 million 2023/24 year end underspend in May, only for that projection to change to a £2.3 million overspend four months later.

Newly-published reports have also updated the position to reflect an even larger projected overspend of £2.9 million for the 2024/25 financial year.

Argyll and Bute Council’s policy lead for health and social care responded to the query with a statement from the HSCP’s head of finance which set out the position.

The discussion took place at a full meeting of the council on Thursday November 21. The HSCP’s integration joint board (IJB) will meet on Wednesday November 27.

South Kintyre councillor Tommy MacPherson asked: “There were reports in May that there was a £2.6 million underspend in health and care services, which was supported in a statement from the IJB.

“Then subsequently to that, there was a £2.3 million overspend, which came from the IJB again. How was there such a swing in such a short space of time?”

Kintyre and the Islands councillor Dougie McFadzean who chairs the IJB, responded with a prepared statement from the HSCP’s head of finance James Gow.

He said: “The HSCP did report a small underspend totalling £2.9 million for the 2023/24 financial year, with a total spend of £359 million. 

“However, the final position included £4.7 million funding allocation from the Scottish Government, which improved the actual position.

“This year it is facing a significant overspend of £2.9 million. This is a result of funding not keeping up with increases in costs, including issues including children in external placements.

“It also includes care at home services and continuing difficulties in recruitment of staff, resulting in higher than budgeted levels of agency staff.

“The HSCP recognises that it is not performing on a sustainable basis, and is working on proposals to reduce the spend as we move into the 2025/26 financial year.”

A report released for the forthcoming IJB meeting added: “The HSCP will require to seek additional support from the non-recurring savings relating to pension costs from Argyll and Bute Council to fund the overspend.

“This will restrict flexibility in future years, adds to the longer-term gap between spend patterns and available resources.

“This will also limit funding for development and transformation as the balance shifts further towards managing immediate pressures rather than longer term change.”