Edinburgh health: NHS Lothian faces 'massive cuts', block on new building projects and recruitment freeze

What Scottish Government budget means for health services in Edinburgh and Lothians

NHS Lothian is facing "massive cuts", a block on all new building projects and a recruitment freeze following the Scottish Budget.

A source described the situation as "utterly dire" and accused the Scottish Government of reneging on previous commitments on funding.

Finance Secretary Shona Robison said in her budget speech on Tuesday that the NHS was being prioritised and its budget protected,

NHS Lothian will have to make 6.8 per cent savings in the coming year, more than double the previous level. Picture: Jeff Moore/PA.

But the government has told health boards explicitly that it will not be providing capital funding for any new projects for at least the next two years. In Lothian, that means a halt to any progress on a replacement for the Princess Alexandra Eye Pavilion, a new cancer centre at Edinburgh's Western General Hospital and the elective treatment centre at St John's Hospital, Livingston, among other projects.

The source said: "All infrastructure projects have to cease now for a minimum of two years and by the time you get anything going again it means that despite the board just recently agreeing its top priorities, none of that will happen for about three years."

Although the overall budget for health boards has increased by 4.3 per cent, other funding changes mean NHS Lothian faces having to make savings of 6.8 per cent, more than double the 3 per cent previously required from boards.

And it is understood the government has made clear that staff recruitment will have to halted across the country. The source said: "It's not written down, but they've been told because of the pay awards, they won't be able to recruit any further staff, which means they will be relying more and more on the nursing bank and outside agencies, which cost a fortune, just to keep minimum services.

A replacement for the Princess Alexandra Eye Pavilion is one of the projects hit by the two-year block on new projects. Picture: Greg Macvean.

"It's because the Scottish Government had separate negotiations which reached deals higher than the Westminster settlements, so there's no additional Barnett consequentials coming to Scotland from Westminster for that and the money has had to be found elsewhere.

"Lothian was trying to get away from using the nursing bank and agency staff because it's so expensive, and wanted to recruit directly into posts because it's cheaper, but they can't do it without available capital."

NHS Lothian has been the lowest-funded health board per head of population for some time but the source said funding of £10 million due from previous years as part of a scheme to close the gap was now being pulled.

"Lothian was told it would get £10m to make up for previous years – the government had committed to it in writing and it was included in Lothian's budget, but that's not going to happen, so that's a loss of £10m which is going to hit the budget even further."

The source said that despite Lothian meeting the government's savings targets in recent years, it was now being asked to find more cuts to make up for other health boards which had overspent. It all means Lothian is facing massive cuts.

"They have been set targets for reducing waiting lists. How are they going to do that now. without the staff or resources they need?"

The source said the health board had never been in a worse situation. "The government has offered assurances they will meet the cost of frontline services, but other than that the message to health boards from the government is basically 'You're on your own'. It means for the next three years they will be treading water trying to work out how to provide services without the infrastructure they need.

"Obviously the government is facing financial pressures, but this is all short-term thinking, which in the longer term is going to cost a fortune."

NHS Lothian said it was “seeking clarity” on the implications of the government’s budget announcement for the capital projects already in development. It added: “NHS Lothian has been working on efficiency savings of 3 per cent throughout this financial year. This figure was set by the Scottish Government and is applicable for all health boards. We continue to explore ways in which we can provide the same high level of patient care, while also delivering recurring cost savings.” It said it did not currently have a recruitment freeze.

A Scottish Government spokesperson said: “As set out in our draft budget, the capital funding position is extremely challenging, with a UK Government cut of some 10 per cent in our capital budget over the next five years. Therefore, our emphasis for the immediate future will be on addressing backlog maintenance and essential equipment replacement.

“We will bring forward a revised Infrastructure Investment Plan in the spring, alongside the medium term financial strategy, at which point we would hope that the fiscal outlook will be clearer.

“We are providing more than £19.5 billion, protecting health and social care delivery in the face of unprecedented fiscal pressure. Despite this investment, hard choices along with greater efficiencies and savings will need to be made – due to extreme pressure from the ongoing impacts of Covid, Brexit, inflation and UK Government spending decisions.”

He added that there had been no “direction” from the Scottish Government to freeze staff recruitment.