The Southern Health and Social Care Trust’s budget for the 2023/24 financial year will leave it in an “extremely difficult” position, its director of finance has warned.
Addressing a meeting of the Trust’s board on Thursday, June 22, Catherine Teggart, director of finance, procurement and estates, said the Trust will need to find savings of £47.3 million just to break even this year.
Ms Teggart told the meeting the Department of Health has a material deficit of £473 million this year and, in order to address this, it is asking Northern Ireland’s five health and social care trusts to collectively find £260 million in savings this year.
Noting the Trust started the financial year with an opening deficit of £29.3 million, the director of finance told the meeting it would be a “very, very difficult” year for the Trust.
“The Trust’s opening deficit refers to pressures known to us at the beginning of the year,” said Ms Teggart. “We then have additional pressures of £35.3 million which are largely to do with growth and the Department has asked us to review that.
“However, the majority of that ‘growth’ would actually be to maintain services at their current level, given increased demand, and that brings the pressures to £64.6 million.
“The department has provided deficit support of £26.3 million that can be used to address the opening deficit figure and, with a few other easement assumptions, a total of £28.6 million can be found to address the deficit.
“However, we are also estimating a Covid-19 deficit pressure of £10.7 million this year and that is how the £47.3 million deficit figure is reached.”
Ms Teggart explained that in order to tackle this problem, the five Trusts have met and decided on categories of savings that can be made this year.
Category A is regarded as ‘savings with little to no impact’ and the Trust is expecting to find £8 million in savings in this category. Category B is ‘the reduction in contract agency costs’ and the Trust is anticipating savings of £3.3 million in this category, while Category C is ‘other savings with little to no service impact’ and the Trust hopes to find £2 million in savings in this category.
The board also heard how the department is expecting the Trust to find a further £13 million in savings through additional low/medium impact savings targets, a figure Ms Teggart is unsure the Trust will be able to achieve.
“At this point we are anticipating working towards the savings in categories A, B and C,” she said. “The additional £13 million will be difficult and we will have to look at other areas, like procurement and contract management and other things that are in our control this year.
“We only received our budget when we were already a quarter into the year and the senior team will be meeting on Tuesday, June 27, to further discuss how we are going to achieve the savings target.”
While acknowledging these savings will be difficult to achieve, the further £21 million in savings the Trust will be required to make to break even this financial year “is not achievable” in Ms Teggart’s opinion.
“The £21 million in savings relating to growth and pressures including Covid-19, is not achievable, in my eyes, this financial year,” she said.
“We will work with the department to try and reduce down some of our spending. The department has sent a clear message to Trusts not to spend in excess of the 2023/24 allocation.
“Our next step is to set an allocated budget to each directorate and closely monitor that throughout the year. The focus will be on closely monitoring that and undertaking a critical review of all recurrent allocations.
“This will be a very, very difficult year and we will have to work closely with the department and the strategic planning and performance group on the deficit and equity gap.”
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