AN estimated £150 million of debt amassed by Scotland’s health boards will be written off to allow them to start with a “clean slate”.
Health Secretary Jeane Freeman said the Scottish Government will not seek to recoup any loans dished out over the last five years.
It comes after Scotland’s auditor general warned two health boards – NHS Ayrshire & Arran and NHS Highland – are struggling to balance their books.
Ms Freeman said she was offering NHS bosses a “new start” and extra cash to be spent on patient care.
From the next financial year, health boards will be expected balance their books in three-year cycles, rather than annually.
Ms Freeman said: “Today I am offering NHS boards a new deal. In return for their efforts to deliver the reforms for the future I am facilitating a new three-year financial planning and performance framework for our NHS territorial boards.
“This change will require boards to deliver a breakeven position over a three-year period, rather than annually as is the case currently.
“In each year boards will have a one per cent flexibility on their annual resource budget to allow them scope to marginally under or over spend in that year.
“For this new deal to be successful I believe it needs a new start. So to give all our territorial boards clear ground to move forward on that three-year planning cycle, I will not seek to recover NHS territorial boards’ outstanding brokerage – the expenditure incurred by territorial boards over the last five years which has been above their budget.”
She said plans to increase spending in England and Wales are expected to see an extra £3.3 billion handed to Scotland under the Barnett formula, which controls levels of UK funding north of the Border, by 2023/24. This will be used to write off Scotland’s NHS debts.
Several boards have received loans from the Scottish Government – known as brokerage – in recent years to fill funding gaps.
Earlier this week, the auditor general said NHS Ayrshire & Arran spent £859m last year and needed £23m in loans – and is expected to need a further £22.4m this year. It had no plans to repay the sum.
The Herald previously revealed NHS Tayside dipped into its charity fund to help prop up its ailing finances. It has a projected deficit of £18.7 million for 2018/19.
Scottish Tory MSP Miles Briggs said SNP “financial mismanagement” had led to £150million of debt being written off.
He said: “Along with the longest waiting times in history and ever increasing delayed discharge, this is the financial cost of the SNP’s failure to oversee our health boards.
“The SNP must now stabilise our NHS finances and has significant resources to do this, thanks to record health investment from UK Government.
“It is now vital that this extra funding is used to improve patient care and not swallowed up by bureaucracy and mismanagement.”
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