Health board faces unprecedented financial challenge, chief executive warns

The chief executive of a Scottish health board has warned it faces its toughest financial challenge to date.

Dr Adam Coldwells, interim boss of NHS Grampian, has forecast it will need to achieve savings of more than £77 million in the coming financial year.

The comments were made as part of his chief executive report set to be put before the board on Thursday.

He said the medium-term financial plan will be set out in April but he warned the health board is likely to continue to experience an “extremely challenging financial landscape”.

His report said: “Whilst we are at an advanced stage in our financial planning for 2024/25, our forecasts anticipate a more challenging year for all health boards than we ever previously experienced.

“Indications are that NHS Grampian will be required to identify and achieve savings in excess of £77 million.

“The scale of this challenge is unprecedented and cannot be underestimated.”

The report states the scale of financial reduction will be achieved through a mix of “close day-to-day spending, significant focus on organisation-wide areas of high expenditure, and transformation driven by clinical services”.

In the short-term, staff are encouraged to “play their part” by using resources efficiently.

The report is also expected to outline the “disappointment” of NHS Grampian at the Scottish Government’s decision to pause capital projects including work on the region’s national treatment centre.

Dr Coldwells said any capital funds received from the Government for 2024/25 will now be spent maintaining the existing estate and essential equipment replacement programmes.

Plans to refurbish the mental health ward at Dr Gray’s Hospital in Elgin will also be reviewed.

Health Secretary Neil Gray said the Scottish Government is providing £14.2 billion for NHS boards in 2024-2025, which he says represents a real-terms increase of 3%.

He said: “Despite our significant investment, the financial climate remains extremely challenging.

“The UK Government’s spring statement set out health consequentials of £237 million – less than the £470m in-year health funding received for 2023-24 and less than is needed given the pressures faced, with no additional capital funding provided to support vital infrastructure investment for our NHS.

“In this context, we are continuing to work with each health board to recover and reform services and address the financial challenge this year and beyond.”