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FINANCING THE HEALTH PLAN

June 17, 2003 12:19 PM

GREATER GLASGOW'S NHS system is facing financial challenges to deliver on everything that was originally planned in the 2003/2004 Health Plan.

Unexpected funding pressures have forced the Board to re-phase some planned developments and re-examine the overall long-term financial plan for Greater Glasgow's NHS system.

Despite investment adjustments this financial year the NHS in Greater Glasgow will deliver a whole raft of service developments and health improvement initiatives highlighted in the local Health Plan.

During this financial year many services will be expanded and developed including:

  • Improvements in cancer services - £1.5m
  • Providing extra diabetes and heart disease nurses in the community - £1m
  • Child mental health teams - £1m
  • More than 1000 extra people with addiction problems put onto recovery programmes - £1m
  • Older peoples teams in every community - £800,000
  • Home support for older people with dementia - £500,000

The shortfall in funding has resulted in some planned developments this financial year to be re-phased into Health Plan actions the following year. Affected will be the scale of development and expansion of services in mental health, child and maternal health and acute, primary care and community services.

The financial pressures that have lead to the overhauling of the financial plan for Greater Glasgow NHS include:

  • Instead of prescribing costs increasing by the forecast 10 per cent or less, new and more expensive products will see costs rise by 12 or 13 per cent.
  • Glasgow's dwindling population has affected our Arbuthnott Formula status – the system used to calculate Greater Glasgow's share of national allocations. Instead of a continuing gainer year on year, the 2003/2004 allocation has delivered a smaller increase than planned for to the tune of £7m.
  • The cost of pay and pay related inflation (including significantly higher National Insurance costs this year) are ahead of those planned for in the financial framework.
  • The impact of the Junior Doctors' "New Deal" agreement  is several million of pounds higher than the early years' estimates.

Despite these challenges NHS Greater Glasgow intends to deliver on increased national clinical and service priorities including improved targets on waiting times and diagnosis.

The new financial strategy is now in place to ensure that pressures can be met without affecting the long term objectives of the Health Plan for Greater Glasgow.

In total the NHS system will invest £1.2 billion this financial year while almost £7m of Health Plan developments in this years' Plan have been re-phased or reconsidered for year two and beyond. Affected are aspects of developments in mental health, child and maternal health, acute and primary care and community services.

Sir John Arbuthnott, Chairman of Greater Glasgow NHS Board, said: "The Board remains committed to its developing health plan and recognises that continuity of commitment to the people of Greater Glasgow in areas of recognised need is paramount. This often involves major partners. Financial pressures will be felt in some newer priority areas where the commitment to future funding has to be secure before these can be initiated.

Finance Director Wendy Hull said: "The NHS Board remains committed to making real improvements to the health of the population covered by the Health Board:  these service developments and health improvement initiatives are highlighted in the Local Health Plan.

"National targets, particularly those relating to waiting times for in-patient treatment and diagnosis, remain a priority; together with the need to be in a position, in the longer term, to ensure sufficient funding is available to support the Acute Services Reconfiguration.

"In the meantime, some aspects of this year's Plan have, or will need, to be rephased:  even so significant non-recurrent funds will be used towards achieving breakeven.  Consequently, there is an urgent need to reprofile the financial plan for the next 3-5 years."

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