One Scottish health board faces “unprecedented” financial challenges and another must redesign its health and social care system to balance the books, auditors have said.
Auditor General Stephen Boyle said there was “no evidence that NHS Ayrshire and Arran can achieve financial sustainability” after it needed a £51.4m loan in 2024/25 to break even.
His report said the health board was facing a deficit of £33.1m this year and does not have a clear plan for achieving financial sustainability.
A separate report on NHS Grampian warned that a return to financial balance is unlikely without “a significant redesign” of its health and social care system.
NHS Ayrshire and Arran has outstanding loans totalling £129.9m, the highest amount across the NHS in Scotland. It also overspent by £14m on temporary staff.
Mr Boyle said the severity of the financial challenge facing the board was “unprecedented” and warned that it was relying on “overly optimistic savings plans that may not be achievable”.
The report found the health board relied on non-recurring savings in 2024/25, which has only increased future financial pressures.
The auditors said the board's prediction that it would would achieve recurring savings of 3% each year until 2027/28 was an “optimistic assumption”, and that performance against the current delivery plan is behind target *.
The Scottish government had rejected NHS Ayrshire & Arran's proposed savings plan on the grounds that the forecast for 2025/26 did not demonstrate “sufficient improvement” in the board's financial position.
It was told to submit an updated plan in June this year – but that date passed without the external auditor seeing it.
The Audit Scotland report says the board continues to rely on temporary staffing at a high cost, and that performance against national waiting time standards is mixed.
It highlighted that 65.7% of A&E attendees were admitted, transferred or discharged within four hours – well below the national 95% standard.
‘Significant financial pressure'
The report on NHS Grampian said its cost base was “unsustainable for future operations based on current funding levels”.
The health board was escalated to stage four of the five-stage NHS Scotland national performance framework earlier this year, amid concerns over its financial stability, leadership and governance.
The new audit report said: “The move to stage four highlights the significant financial pressures on the board and the significant challenge it will face to bridge the financial gap * over the medium term.
“NHS Grampian should agree a financial recovery plan as soon as possible and clearly set out how the board intends to return to financial balance.”
It added that it will not be possible for the health board to return to financial balance without “a significant redesign of its health and social care system and/or obtaining fundamental changes in the funding model”.
