Scotland’s NHS as it stands is “financially unsustainable” and needs “system-wide” reform, the auditor general has said today.

In a new report public sector spending watchdog Audit Scotland says the health service faces a financial time bomb as pressures increase.

They warn reforms to deal with a potential £1.8bn budget black hole by 2023-24 are ‘too slow’.

Health secretary Jeane Freeman said the Scottish Government has a ‘twin approach’ of investment and reform to ‘meet increasing demand and to deliver balanced and sustainable services.’

Audit Scotland has said a long-term push to bring together health and social care services – which should save money by reducing the number of people who end up in hospital – ‘remains too slow’.

There is ‘little evidence’ cash is being transferred from hospitals to community and social care, they say, a key aim of service integration.

"We're beginning to see examples of new ways of delivering healthcare,” auditor general Caroline Gardner said, “but they're some distance from the system-wide reform the NHS needs.”

One indication of the pressure health services are under is the number of regional NHS boards that need cash bailouts from government.

This has risen from zero in 2015-16 to four this year – at a total cost of £116m – and Audit Scotland predicts bailouts could top £200m in the next financial year.

Although health leaders were able to find £390m in savings, half of these were effectively one-offs that cannot be repeated.

When she became health secretary in 2018, Jeane Freeman wrote off health board debt to the Scottish Government and said budgets would only have to be balanced over a three-year cycle.

This is described in today’s report as an ‘important step’ to ‘more effective’ planning. 

Elsewhere, the report criticises a lack of stable leadership at the country’s 22 regional and national health boards.

There were 14 changes at chief executive or board chair level over the last year, while half of boards have senior leaders who split their time across two organisations.

Responding to the report, Theresa Fyffe of the Royal College of Nursing Scotland said: “The Scottish Government must do more to work with boards to speed up integration, address the financial challenges and create a positive working environment for staff across health and social care.”

Professor Derek Bell OBE, president of the Royal College of Physicians of Edinburgh, called for more to be done to improve workplace culture:

“Given recent reports about negative working arrangements for junior doctors in some of Scotland’s hospitals, it is vital that efforts are undertaken to improve workplace culture, rota structure and general working conditions. All of our health professionals must be properly valued.”

Health secretary Jeane Freeman said the report recognised the challenges facing the NHS, including increasing demand and “building a sustainable workforce”.

“Work to ensure people get access to health and social care services is also progressing, but it needs to happen faster. Our delayed discharge figures show areas where integration is making a difference and we continue to work closely with COSLA to accelerate progress and make this happen across the country.

“As recognised by Audit Scotland, investment in our health services has grown by 6% above inflation over the last ten years, and now exceeds £14bn this year. This is all part of our twin approach of investment and reform to meet increasing demand and to deliver balanced and sustainable services.”