Briefing: Every IJB facing cuts

Health & Social Care Partnerships forecasting cuts, dipping into reserves and warning services could suffer, our analysis of budget proposals shows

Friday 12th April 2019

The public bodies set up to oversee Scotland’s policy of integrating health and social care are struggling under ever-greater financial pressure, an analysis of budget proposals by healthandcare.scot shows.

More than three quarters of Health & Social Care Partnerships (HSCPs) reported budget deficits for the last financial year and all 30 are forecasting cuts in the coming financial year.

HSCPs – joint initiatives between councils and health boards to unify social care and some health services – are increasingly using cash savings to plug gaps in day-to-day spending or relying on bailouts from their NHS and council partners to balance the books.  

Many are warning the year ahead could see services being cut as they struggle to meet stretching savings targets.

Others have only been able to identify some of the savings needed to fill funding gaps, leaving millions of pounds worth of cuts still to be found.

Now, a leading group of charities is warning the integration of health and social care – described by the Scottish Government as the biggest change to the NHS since it was founded – could be nudged off course as officials focus on saving money.

The Health & Social Care Alliance Scotland’s chief executive, Professor Ian Welsh, says “The ALLIANCE is concerned the current financial climate of austerity may be viewed as a driver, and therefore overtly influence, the change that is needed in health and social care.”

“For integration to work effectively, a balanced and equitable approach must be taken to achieving all nine health and wellbeing outcomes, not just the outcome focused on effective use of resources. Instead of simply trying to do more with the same – or fewer – resources, we recommend exploring alternative ways of raising and allocating funds, including human rights budgeting.”

The Scottish Government insists overall funding for health and social care is up by more than a quarter this year and says it is supporting HSCPs to improve how they manage their finances.

Background

In 2016, 30 HSCPs across the country were created to oversee the integration of health and social care.

They are funded jointly by payments from their partners and, in theory, are legally required to set balanced budgets.

Deficits have to be met with cash from reserves, additional funding from the local authority or health board – which might have to be repaid at a later date – or cuts to services.

Though the Scottish Government has increased the money going to health and social care by £160m, or 26%, costs across a whole range of services are rising quicker.

Areas swallowing up extra cash include social care, due to new Living Wage requirements, prescribing, because of unpredictable medicines price changes and more advanced medicines being delivered in primary care and communities, and the cost of implementing Scottish Government initiatives such as the Carers Act and free personal care for the under-65s.  

Rising costs

At first glance, officials at Clackmannanshire & Stirling HSCP, which serves just under 150,000 people, have spare cash to play with.

Between them, NHS Forth Valley, Clackmannanshire council and Stirling council contributed an additional £5m for the coming financial year.

But the partnership estimates the cost of its services will rise by £11m – leaving a £6m shortfall.

Officials on the Integration Joint Board (IJB) that heads the partnership have only been able to identify £2.3m in savings, stating this is the maximum that can be delivered without a ‘significant adverse effect’.

In stark terms, a report to the board warns further savings will be painful:

‘Given the draft transformation plan already includes increasingly challenging options including the proposed withdrawal of services from several physical locations it is difficult to see where additional savings of such magnitude could be generated in the short term without significant and immediate service impact.’

Officials say the £4m they have to save equates to 230,000 hours of care at home, 700 hours of nurse care at a care home or nearly 400,000 prescription drugs.

Clackmannanshire & Stirling is not alone in saying efficiencies are getting harder to find after a decade of public spending being squeezed. Further cuts, they say, will be felt by the people who rely on public services.

Urban centres

Scotland’s urban centres are also feeling the squeeze.

Aside from Edinburgh, where the IJB refused to agree a budget that would have included more £12m in cuts, Glasgow, Dundee and Aberdeen are all raising warning flags about their 19/20 budget.

Glasgow – one of the few partnerships to report a budget surplus last year – will have to find almost £23m and is warning health visitor numbers will have to be cut “if no additional funding is secured at a national level”.

In the coming year, Dundee faces a £5.9m funding shortfall.

And Aberdeen hopes to find more than £4.5m through a familiar combination of managing demand and inflation, income generation and redesigning services to make them more efficient.

Like its counterparts, it predicts financial pressures will only increase as the population ages and poses an ever-greater burden on health and care services.

It will be extremely difficult for the IJB to continue to generate the level of savings year on year to balance its budget,’ it admits.

Structure

In some areas, funding worries are not down to increased demand alone – rather, they stem from assumptions made when the IJBs were set up.

Budget papers considered by councillors and health managers on Shetland’s IJB, which is staring at a £2.5m shortfall, state: ‘Since the formation of the IJB in 2015 the payments to the IJB have not been enough to fund services as they are currently delivered.’

While in Orkney, the health board and the council admit ‘there may need to be a revisit of the cost of the [IJB’s] baseline services as some overspends are just the cost of the service and not actually an ‘overspend’.’

This problem is not unique to the islands. Labour MSP Alex Rowley has repeatedly claimed Fife IJB was set up with an annual deficit “built into it”.

Fife IJB budget proposals go as far as saying the ‘current financial envelope does not allow the delivery of services and achievement of national targets.’

Across the River Tay, Angus HSCP ended the year under-budget. But even using the cash reserves it has built up to address the ‘very significant financial gap still remains’.

Partnerships across Scotland continue to dip into savings to cover day-to-day spending – a solution that looks increasingly unsustainable.

East Dunbartonshire’s cash reserves have been ‘significantly eroded’ over the last few years and it is now banking on being able to deliver more with less.

If savings targets don’t work out, the relevant local authority or health board – themselves likely under financial pressure – has to bail the HSCP out, though this funding often has to be repaid in future.

One of Jean Freeman’s first acts as health secretary was to announce NHS boards would not have to repay £150m loaned to them by the Scottish Government.

Conservative health spokesperson Miles Briggs previously suggested “our IJBs are going to be in a similar position”.

Government support

A Scottish Government spokesperson told Healthandcare.scot today:

“Integration Authorities have real power to drive change, managing over £9 billion of resources that NHS Boards and Local Authorities previously managed separately. Pooling budgets in this way gives local systems greater opportunities to maximise the use of all of their resources to improve people’s health and wellbeing. 

“We continue to invest in social care and integration, and this year our package of investment to support these services will exceed £700 million, a 29% increase over last year.

“However, we do understand that there are challenges facing the system. The joint review of progress with integration, published in February 2019, made practical proposals to help address these challenges, and specific attention was paid to developing proposals that will improve integrated finances and financial planning.

“With COSLA, we are working closely with Integration Joint Boards, Councils and NHS Boards to implement these proposals in full.”

 

 

*The 31st integration authority, Highland, operates under a different model where all services are the responsibility of NHS Highland as the ‘Lead Agency’. It is therefore not possible to draw a direct comparison with the Integrated Joint Boards.