Council faces ‘financial sanctions’ over £19.4m care savings

EDINBURGH City Council could face “financial sanctions” from the Scottish Government as the Capital’s health and social care services will be told to save £19.4 million in the next financial year.

Friday, 25th January 2019, 7:43 am
Updated Friday, 25th January 2019, 7:55 am
The Edinburgh Integratio Joint Board manages the city's health and social care operations but the council has opted to cut its budget, leading to claims the Scottish Government could 'sanction' the council.

Bosses at the Edinburgh Integration Joint Board (EIJB) could reject the “daunting” financial offer from the council when it discusses its budget next month.

The city council has set out around 80 budget proposals to save at least £41m in the 2019-20 budget – but the total savings required could be even higher, partly down to the financial pressures in health and social care.

Although not listed in the public consultation of proposed cuts, the council is asking health and social care services to make an “efficiency” of £3m next year – along with “net residual pressures” of £16.4m.

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The EIJB was set up following Holyrood legislation that saw NHS boards and local authorities asked to decide on the option for health and socal care. It is made up of five NHS Lothian non-executive directors and five councillors from the City of Edinburgh Council working in partnership, and has a chief officer.

Its purpose is to improve the wellbeing of people who use health and social care services, particularly those with complex needs that also require social care.

The EIJB has estimated that it needs £225m next year – so anything less could lead to board officers recommending the offer is rejected. A report to the council’s finance and resources committee, which will examine  budget proposals on February 1, has highlighted a risk of financial sanctions from the Scottish Government if the £3m is not passed on to the EIJB. The £3m is being taken out of £9.9m of funding from the Scottish Government for health and social care.

Officers said: “While this is a savings target applied before the council has passed on the full allocation of funding contained within the local government settlement to the EIJB, there is still a risk that this is viewed as a breach of the conditions for receipt of the full level of funding set out within the local government finance settlement.

“If this position is adopted as the council’s final budget in February, it therefore carries a risk of financial sanctions.”

A council source said that the EIJB was considering rejecting the funding offer from the council and  added that “an emergency budget may have to be set” if it is rejected by the board.

Council leader Cllr Adam McVey admitted that next year would be “challenging for social care”. He said: “There was an overspend throughout the year so it has been difficult to manage our current health and social care system within the budget that was allocated.

“What we are trying to do is give the demography uplift and pass on the full amount of uplift from the Scottish Government that they have given us as part of the EIJB settlement.

“We are also asking for a £3m efficiency within that service. We have asked the IJB to come up with a range of savings to basically bring last year’s overspend and projected overspend from this year down.”

He added: “Passing on the full contributions from the Scottish Government draft budget allocation and putting in a £3m efficiency is going to be very challenging for them. That will mean their starting point for what they need to find throughout the year is about £19m.

“What we want to get to is a situation where the EIJB is delivering the service that people need in the city and that people expect in the city and bring the levels of people waiting for discharge and care down to acceptable levels.

“Until we get to that point, the financial challenge is still there year on year.”

The council hopes that any additional funding gained following the final Scottish Government budget will be allocated to health and social care.

Green Cllr Melanie Main, who sits on the EIJB, said: “The severity of budget cuts proposed by the SNP-Labour council for next year is being felt in every department and every service. 

“But the sheer scale of the shortfall in health and social care, at £19m is daunting. In fact, once additional NHS savings are factored in, the gap is £29m.

“I don’t think it is defensible for the council not to pass on in full the extra £10m from Scottish Government for health and social care, so I suspect there will be a real expectation, across all parties, that the £3m shortfall is added back into the budget. However, that still leaves a massive gap.  Some of that could and should be filled by the board identifying savings, but I also don’t think the Scottish Government can watch from the side-lines – it urgently needs to give councils more funding by the end of January.

“Underlying this debate about finance needs to be recognition that the services provided are for some of the most vulnerable people in our city.

“Edinburgh needs to get services and funding right for their sakes.”

Cllr Ricky Henderson, chairman of the EIJB, said: “The initial indicative offer will be very challenging and would impact on our plans for next year. We are committed to further discussions with EIJB members before agreeing the budget/financial plan for 2019-20.”

A spokesperson for the EIJB said: “We are committed to delivering modern, sustainable, health and social care services which the people of Edinburgh can rely on – services which are safe, caring and reliable.

“The EIJB will be discussing their proposals for 2019-20 at our next board meeting on 8 February.”