Scottish boads still in deficit despite £90m cash injection

At least three of Scotland's NHS boards expect to end this financial year in deficit - despite a£90m one-off cash injection intended to 'wipe the slate clean'.

HSJ has learned that acute trusts in particular have managed to swallow up the extra money and that some are forecasting going into even more debt in the next three years.

Grampian, Argyll and Clyde, and Tayside will all end this year with deficits. Greater Glasgow - which has five trusts - will meet its targets only because the primary care trust has bailed out the others to the tune of£4m.

Grampian, which will end this year with a£5.4m deficit, does not expect to achieve break even in three years' time. By then, it anticipates that it will have a£12.4m cumulative deficit.

Lothian, while projecting that it will balance its books this year, has also identified around£14.8m of extra costs which it will have to meet by 2004-05 to avoid a deficit.

The acute trust, Lothian University Hospitals, has already announced a cost-cutting programme, including job losses, to remain within budget.

Former Scottish health minister Susan Deacon announced the one-off£90m last September, with each health board given 1.5 per cent of its budget to clear deficits and spend on service modernisation.

Tayside University Hospitals trust, which had a particular problem, was given£15.9m to clear its cumulative deficit, but expects to end this year with a£1.6m deficit and to achieve its targets by 2002-03.

Last week, the chief executives of the acute trusts and NHS boards in Grampian and Argyll and Clyde were called to give evidence to the audit committee of the Scottish Parliament, which is investigating NHS finances. The committee heard that Argyll and Clyde expected a deficit of£1.5m at 31 March this year, but hoped to break even next year.

Audit committee convener Andrew Welsh told HSJ that he was concerned there were structural reasons why some parts of NHS Scotland were not hitting break even. 'I do not want to anticipate our report, but one of the questions we are asking is whether there is enough money in the system. Are we asking them to do something which is fundamentally impossible?'

Grampian chief executive Neil Campbell said this week that the board was following an action plan which would see an agreed overspend of£4.5m in 2002-03,£2.5m in 2003-04 with balance achieved by 2004-05.

'We have to get back into recurring financial balance, then we will be discussing with the Scottish Executive how we can deal with the cumulative deficit.'

He cited the particular problems faced by teaching centres - such as leading-edge developments - and the high cost of meeting national agreements on pay, for example.

Grampian was also a relative loser in the redistribution of resources under the new Arbuthnott formula, which takes deprivation and need into account.

Glasgow, a relative gainer under Arbuthnott, is taking a corporate approach to finance across the board area. Glasgow finance director Wendy Hull explained: 'Echoing the spirit of unified boards, we are working together. We have identified uncommitted resources and pooled them to spread the pain equitably.' In practice, this means that£4m has been redistributed to the acute trusts.