Budget Setting & Forward Look David Carson Financial Controller Service Development NHS Tayside

The NHS Financial Challenge Black Hole Syndrome

Why? Demographics Health inflation above RPI New technologies account for 1/3 of annual increase Victims of own success NHS Tayside £475m to £650m in 4 years

Demographics

Strategic Pressures balancing act Kerr Report Waiting times Mental health legislation Patient safety initiative Health and Safety Modernising medical careers DDA, decontamination SMC/NICE/SIGN Left field

Budget process Double Micawber effect - must balance in year, MUST NOT overspend, criticised for underspend (1% carry forward allowance) Continuous process of horizon scanning Commence building budgets about now to present to Board Committee in March Iterative process

Budget process Inflation - pay is 72% of total costs, Agenda for Change, GP contract, consultant contract Non pay inflation Developments Ring fenced funding Result is inevitably a deficit leading to a savings target Manage at the margins

Budget process

Savings targets Efficiency savings - service redesign Delay developments

Lessons The earlier we know, the more chance we have of absorbing cost

Lessons - If NHS know early enough in the budget process we are more likely to accommodate drug cost increases - Need robust costs for drugs and timing of approval to predict impact - Need details of other impacts on facilities, side effects, laboratory costs

Win/Win Drugs to push care i/p to daycase to o/p to community Reduce length of hospital stay Avoid/prevent admissions No/few side effects