Health funding cannot keep rising ‘exponentially’, warns NHS chief

Funding for the NHS in Scotland cannot continue to rise “exponentially”, the head of the health service has said.

Under Scottish Government plans, health funding will reach record levels in 2025-26, continuing a trend of increasing cash to more than £21 billion – accounting for around one third of the total budget.

Speaking at the Public Audit Committee in Holyrood, NHS Scotland chief executive Caroline Lamb said funding cannot continue to increase in the coming years and work should be done to improve the country’s health as well as looking at reforming the service.

“In the short term, this is about making the absolute best use of the resources that we already have in terms of trying to improve performance,” she said.

“But also recognising that… the proportion of the Scottish budget that goes to health cannot carry on increasing exponentially.

“To address that, we need to tackle the underlying causes of that ill health in Scotland, and that isn’t just for the health service to do – that is a cross-Government, cross-society endeavour.”

The Scottish Government, Ms Lamb said, will publish a “population health improvement framework” in the spring in an effort to address issues, and work will have to be done “around how we can deliver health services in a different way – more efficiently, more effectively”.

Ms Lamb and other senior NHS staff were before the committee discussing a recent report from Audit Scotland which criticised the lack of progress on the pandemic recovery plan published in 2021 and warned of the need for “difficult decisions” to be taken on reform.

The report was also critical of the use of “brokerage” within the system – a form of loan given to individual boards to help them balance the books – which is often given at the end of the financial year.

In 2023-24, the report said, £166.5 million in brokerage was given to eight health boards, an increase from the five required the previous year.

Caps have been introduced for the amount of brokerage available to health boards in the current financial year and Audit Scotland urged the Government to “provide more certainty” over funding.

Alan Gray, the Government’s director of health and social care finance, said: “I think we’ve made a clear signal that from the start of next year, we want to see boards starting to turn back to financial balance and taking the steps and actions to do that over a reasonable time period.

“We’re not aiming to do things without due care and attention but we do need to start to move away from brokerage becoming an increasing part of what we fund.”