Local health chiefs have placed a ban on all non-essential expenditure amid fears that their overspend could reach more than £5 million.
The integration joint board (IJB), which oversees the Argyll and Bute health and social care partnership (HSCP), was due to discuss its financial position on Wednesday as the Buteman went to press.
Papers for the meeting reveal that the forecast overspend for 2018/19 is £4.3m – a £300,000 increase on the prediction reported in November.
And there are warnings that a further £1.1m could be added to that if NHS Greater Glasgow and Clyde does not accept the HSCP’s stance on a service level agreement (SLA).
A report by interim chief financial officer Kirsty Flanagan states: “The most significant risk affecting the forecast outturn position for health is the SLA for Greater Glasgow and Clyde. At the last IJB a decision was made to reject the increase and the forecast outturn reflects this position. If this position is not accepted by Greater Glasgow and Clyde then there is a risk that the outturn will increase by £1.1m.
“Whilst there has been variations across the month, the overall HSCP overspend is currently forecasting a similar level of overspend to that reported six months ago in June.
“This is extremely disappointing and demonstrates that there has either been increased demand and/or a lack of control over expenditure.
“There has been an improvement in the health position, mainly as a result of the decision to reject the Greater Glasgow and Clyde SLA increase.
“However, within social work there has been a deterioration of the position due to demand which has hidden the results of review work in young adult services which has reduced care package sizes and costs.
“It is unlikely at this stage that the HSCP will achieve financial balance by the end of the financial year and it will therefore need to look to its partner bodies for additional funding.”
Council leader Aileen Morton, a member of the IJB, welcomed measures that are being taken to bridge the gap. She said: “The council has been aware of the risk of an overspend by the HSCP for a number of months.
“While it is disappointing that the partnership is unlikely to achieve financial balance this year, it’s not a surprise at this point.
“I’m aware that substantial steps are being taken by both health and social work services to try and bring the overspend down, and that determination to get the situation under control is welcome.
“The council will need to consider funding implications later in the year once the final position is known.”
Ms Flanagan also detailed the measures that are being taken by the HSCP with the aim of reducing the overspend. These include further liaison on the SLA, a “greater grip” on outstanding social work costs, and a daily review of expenditure.
She added: “I had a conversation with the chief officer (Joanna McDonald) during the first week in January to discuss putting in place a moratorium on all non-essential spend.
“Staff meetings took place with Brian Steven, an officer appointed by the Scottish Government to deal with the NHS Highland financial situation, on January 10 and 11.
“He discussed various opportunities/methods to assist with turning around the financial position.
“Weekly meetings are already in place for vacancy management (and) other measures will be taken.
“These additional measures will be in place indefinitely. This is not something that will be put in place [only] until the end of this financial year.”