NHS Lothian faces £100m shortfall due to funding formula as MSP calls for fair deal for area

A renewed call for “fair funding” of health services in and around the Capital was made today as NHS Lothian projected a £100 million shortfall over the past six years.

By Ian Swanson
Tuesday, 7th December 2021, 4:45 pm

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Lothian MSP Miles Briggs said a gap of that size amounted to a financial crisis and urged the Scottish Government to act now to stop the health board reaching “breaking point”.

A recent report to the NHS Lothian board warned that the underfunding had already affected the organisation’s performance and, combined with the effects of Covid, would make it even harder to meet targets in future.

The funding shortfall is affecting hospitals' ability to meet targets, says NHS Lothian

Mr Briggs said: “The pandemic has pushed the already struggling health board into crisis, which we are seeing in A&E departments and waiting times for operations.

“Frontline NHS Lothian staff are making an incredible effort, but are not being given the support that they need and ultimately it is patients who suffer.

“All health boards in Scotland need a funding boost in the upcoming budget, but none more so than NHS Lothian.”

He said it was the poorest-funded health board in the country.

“If NHS Lothian are saying they’re going to have a £100m projected shortfall that's a financial crisis.

“At the heart of this is the health board with the highest growing population, all the pressures we see in the Capital and at the same time having the poorest deal.

“Over the last four or five years I’ve tried to get ministers to really look at this and to review the funding formula. Half-heartedly Jeane Freeman said she would do that and nothing came of that.

“This is a real alarm bell being rung by the health board and ministers need to start taking it seriously because it will reach breaking point when the health board will need a bail-out. If they can’t see this as a warning, what else does it take?”

Funding of health boards is based on the NHS Scotland Resource Allocation Committee (NRAC) formula, which was introduced in 2009/10 and shares out money based on the age and sex distribution of the population in each area, as well as geographic factors and other health indicators. But because of large differences between these amounts and the previous figures boards had received the allocations are adjusted each year.

The health board report said since 2015/16, Lothian had received a total of over £80m less funding than NRAC would provide.

And it added: “For 2021/22, this cumulative shortfall increases to £100m.”

And the report highlighted the consequences.

"The impact of the shortfall in funding has resulted in a care deficit within Lothian and is evidenced by the challenge of delivering scheduled and unscheduled care targets that impacted even before Covid.

"Negotiations are continuing with Scottish Government colleagues to ensure that appropriate funding streams recognise the unique imbalance in funding impacting on NHS Lothian over a number of years. However, it is clear that our ability to recover from the impact of Covid and the legacy of our NRAC-driven care deficit will place a greater burden on our services to achieve national performance targets in the future.

A Scottish Government spokesperson said NHS Scotland funding was at an all-time high.

"We are committed to increasing frontline health spending by 20 per cent over this parliament, providing at least £2.5 billion in additional funding by 2026‑27. We will deliver the first increase through the 2022‑23 budget.

“This will be the most difficult winter in NHS history and that’s why we’ve already announced an additional £300 million of measures to increase NHS and social care capacity and are in daily contact with every board to provide the support needed.”

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