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Under-pressure Health given more cash to deal with "funding gaps"

Under-pressure Health given more cash to deal with

Friday 15 March 2024

Under-pressure Health given more cash to deal with "funding gaps"

Friday 15 March 2024


Health needed an urgent funding plug from Treasury after going £7.6m over budget at the end of last year – despite targeted efforts to improve the department's situation, it has emerged.

After years of overspending, and being "read the Riot Act" by a previous Treasury Minister, the department was put under a rigorous 'Financial Recovery Plan' overseen by a team parachuted in to help bring the ailing department back on track last autumn.

But, despite the department having achieved the savings it needed to under the FRP, getting additional funding in the Government Plan, and an extra £10m in December, it has still struggled, with Treasury Minister Elaine Millar asked to sign off on an extra £7.6m in February of this year to regularise the department's position.

This, a recently published report on her decision said, was because spending had still been "higher than previously anticipated".

More money to come?

The Government did not clarify what the overspend was for, despite several queries from Express. However, officials said more would be made public about the department's 2023 finances at the HCS Advisory Board scheduled for Thursday 28 March.

The latest cash plug comes after the Government gave the department £10m in December. These funds were repurposed from a budget originally destined for covid-19 expenses. It was acknowledged at the time that Health was continuing to face challenges in the aftermath of the pandemic, and that efforts to make savings were being made.

Health Minister Tom Binet this week revealed that an "extra chunk of money" could be coming the department's way in the near future to help address previous "underinvestment in Health".

Recovery measures underway

In September, the Department was “read the Riot Act” by then-Treasury Minister Ian Gorst over failures to keep within budget. He made a demand for the department to reduce spending by £25m per year by 2025.

The FRP is expected to bring its finances back on track after years of overspending, by tackling inefficiencies in the system and bringing more substantive staff on board, among other things. 

With the department scheduled to save £3 million in 2023, the savings delivered that year were of £3.2 million – the HCS Advisory Board heard in February.

The plan takes into account that after saving £25 million, a further £10 million are not covered, and will either continue to require additional funding or a decision on the continuity of services.

Extra cash needed to get Orchard House over the line

At the same time as signing off on the £7.6m for Health, Deputy Millar also allocated up to £21,000 to the mental health facility Orchard House, to top up the funding for developing a specialist mental health facility. 

Orchard House had received £2.435 million towards the project in December, going towards increased room capacity and "[making] better use of the facilities at Orchard House" as well as structural work, but it was found at the end of this year that it needed extra cash to complete the project.

The project was due to be completed in 2023, but is now due to open by the first week of May.

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