NHS Shetland could be forced to save around £4 million in the next financial year, following the Scottish government’s draft budget agreement.
Chief executive Ralph Roberts said the core budget for NHS Shetland in 2017/18 had increased by £700,000, or 1.5 per cent, up to £46.5 million from the previous year’s £45.8 million.
Mr Roberts said: “We have also estimated that our costs will increase by £ 2.4 million as a result of inflation, nationally agreed pay awards, new and increased prescribing of drugs and the impact of increasing demand on services as our population ages.
“This means, along with our current costs already being £1.8 million more than our budget, that NHS Shetland will have to reduce our costs by around £4 million.
The figure for 2016/17 included funding of £2.8 million for patient travel and £500,000 for alcohol and drug services that NHS Shetland has received year on year but was previously seen as “outside” the core budget, Mr Roberts explained.
Other examples of known increased costs included: pay awards –£600,000; non-pay inflation – £260,000; utilities inflation – £29,000; other NHS provider costs – £897,000; increased/new drugs – £338,000; modern apprentice levy – £100,000; non-domestic rates – £142,000; patient travel – £56,000.
Mr Roberts said: “We are continuing to look at how we might achieve [the savings] and are currently planning to present a budget to our board meeting in February.”
Alongside the proposed budget increase described above, NHS Shetland will also receive some additional funds that we are expected to pass directly to the Integrated Joint Board to support social care services and to partly offset the reduced grant the Shetland Island Council is receiving.
Mr Roberts said: “NHS Shetland is also expecting to receive our fair share of a national £107 million fund for social care that has been funded out of the increased health budget in the proposed Scottish Budget.
“We would expect this to be in the order of £0.4 million and will be passed directly to the Health & Social Care partnership, Integrated Joint Board (IJB).
“This funding is expected to be used by the IJB to offset increased costs in providing Social care services and to offset the reduced grant that will be received by Shetland Islands council.”
Mr Roberts added that in addition NHS Shetland would receive a number of other “non-core” budgets of around £10 million that were targeted at specific services.
He said: “This includes funding for issues such as public health, dental services and a number of national initiatives. The value of these budgets will not be finalised until the end of January 2017 but we expect these to be broadly at the same level as in 2016/17 and will not be increased for inflation.
“NHS Shetland will therefore have to absorb any increased costs associated with the services through efficiencies elsewhere in our budget.”