ONE of Scotland's largest health boards is facing a budget shortfall of more than £22 million for the new financial year despite already projecting cuts worth £25m.

A paper due to be presented today [wed] at a meeting of NHS Lothian executives warns that the health board has already reached the limit of available efficiency savings for the 2017/18 financial year and that there is "a very low expectation" that further reductions can be achieved, leaving it with a £22.4m "funding gap".

The report stressed that the forecast spend for the coming year did not include any provision to refer patients for treatment in the private sector. NHS Lothian previously spent £59m in the eight years to 2015/16 sending patients to independent hospitals in order to meet NHS waiting times targets.

However, the papers reveal concerns that meeting budget targets was backfiring on performance. Minutes from a previous board meeting in February stress that "a single tangible consequence of delivering financial break-even" during in 2016/17 had been "a deterioration in the performance of the treatment time guarantees with significant spend being undertaken in the independent sector".

The "challenging" financial outlook is being driven by an increasing population within the region who are also "growing older and presenting with more complex needs", said the report.

It added that a 10 per cent reduction in bed blocking - where hospital beds are occupied by patients who are fit to leave but have nowhere to go - could deliver savings of £13.2m in the Lothian area, and that "opportunities for cost reductions may still exist" within GP and acute prescribing, with the overall drugs bill expected to increase by £18.5m in the coming year, but these would be more complicated to deliver.

Alison Johnstone, MSP for Lothian and Green health spokeswoman, said: “It’s quite clear that the situation for Lothian NHS isn’t sustainable. While efforts should always be made to maximise efficiency, the growing population in Lothian and the demand for a range of health services from our very youngest to our oldest citizens means that it’s time to have a serious conversation about how we fund this."

Susan Goldsmith, Director of Finance at NHS Lothian said: “At this stage we are forecasting a gap of around £22m in our financial plan. We are considering a range of options to reduce spending which build on the efficiency savings already identified and, like all health boards, we remain in constant dialogue with Scottish Government regarding performance and finance related issues.”

It comes as a report today by the House of Lords slammed the slammed the "short-sightedness" of successive governments for failing to plan effectively for the long-term future of the health service and adult social care.

The report by the Select Committee on the Long-term Sustainability of the NHS said that health funding must increase "at least in line with GDP in real terms" after 2020 and that increases in NHS funding should be matched in social care funding. It also called for a nationwide campaign highlighting the dangers of obesity in causing cancer and diabetes.

Professor Derek Bell, President of the Royal College of Physicians of Edinburgh, said greater investment was need along with health service reform.

He said: “The Committee is correct to conclude that short- termism exists in the NHS and in social care. Longer funding cycles are needed to avoid this."