Report by Chief Finance Officer.
10
The Chief Finance Officer submitted a report relative to the financial allocation and budgets made available to the IJB for 2022/23 by Renfrewshire Council and NHSGGC, outlining the main financial pressures on health and adult social care services.
The report intimated that Renfrewshire IJB was a legal entity created by Parliamentary Order following ministerial approval of the Integration Scheme between Renfrewshire Council and NHSGGC. It was accountable for the stewardship of public funds and ensuring that its business was conducted under public sector best practice governance arrangements, including ensuring that public money was safeguarded, properly accounted for and used economically, efficiently and effectively. The budget delegated by the two partner organisations was used by the IJB to commission services which were delivered by Renfrewshire HSCP. The principles of the funding allocated by the two partner organisations were set out in the Integration Scheme, however, utilisation of this funding was delegated to the IJB.
The report further intimated that under the terms of the Integration Scheme, partner organisations should make appropriate arrangements to fund pay awards, contractual uplifts, the impact of demographic changes and determine efficiency targets as part of their respective budget setting processes. The role of the Section 95 Officer, Chief Finance Officer, for the IJB included both the adherence to professional standards as well as compliance with The Local Government (Scotland) Act 1973 and for the IJB this included the requirement to ensure a balance budget was set.
The report set out the implications of the Scottish Government budget for 2022/23, the Bill for which was passed on 10 February 2022, and provided an overview of the IJB’s budget allocation for 2022/23. It was noted that, as a direct and ongoing consequence of the COVID-19 pandemic, the financial year 2021/22 had presented financial challenges and complexities beyond anything previously experienced. The impact of COVID-19 on services delivered by the HSCP had been unparalleled and had required ongoing service change within a short period of time, ultimately having a substantial financial impact, which was likely to continue over the medium-term and at least over the next few financial years. The continually changing situation, along with the potential for future spikes in demand for services had and would continue to create additional delivery and financial pressures as well as impacting the HSCP’s transformation and savings plans which would require ongoing review and realignment.
The report advised that the Scottish Government had not provided detailed spending plans beyond their draft budget for 2022/23. The Scottish Government had given a commitment for a full resource spending review in May 2022, the aim of which was to set out long-term funding plans and the roadmap for delivering key commitments, such as the National Care Service. The continuation of single-year settlements at this time was challenging for the IJB and continued the uncertainty for future medium-term financial planning, as well as that of funding partners.
A copy of the letter dated 9 December 2021 from the Director of Health Finance and Governance, Scottish Government, formed Appendix 1 to the report; a copy of the letter dated 9 March 2022 from the Director of Finance and Resources, Renfrewshire Council formed Appendix 2 to the report; and a copy of the letter dated 9 March 2022 from the Assistant Director of Finance-Financial Planning & Performance, NHSGGC formed Appendix 3 to the report.
The report highlighted that the 2022/23 budget proposals had been presented on a ‘business as usual’ basis, however, ongoing and developing COVID-19 issues continued to highlight that this was not the case and extraordinary costs were being incurred and would continue to be incurred for the foreseeable future.
The Chief Finance Officer intimated that a further report would be submitted to the IJB if the drawdown from general reserves to cover the funding gap would exceed £341,000, as detailed in the report.
DECIDED:
(a) That the delegated Adult Social Care Budget for 2022/23, as detailed in Appendix 2 to the report, be accepted;
(b) That the delegated Health Budget for 2022/23, as detailed in Appendix 3 to the report, be accepted, subject to any final adjustments in relation to recurring budget adjustments at month 12 and any further funding allocated by the Scottish Government for the IJB in respect of any additional and/or recurring funding;
(c) That a drawdown of reserves be approved, if required, in order to fund any shortfall in funding for 2022/23; and
(d) That it be noted that, as detailed in section 11 of the report, the 2022/23 budget proposals assumed ‘business as usual’. The potential ongoing financial and economic impact of COVID-19 represented a significant additional risk to the IJB and the wider public sector going forward.