Elected Member Briefing - HSCP Financial Recovery Plan 2025/26

About this Briefing Note

Report by: Donna Mitchell, Chief Finance Officer, Health and Social Care Partnership

Date: 1 October 2025

Subject: Financial Recovery Plan 2025/6

Responsible Officer: Jacquie Pepper, Chief Officer/Director (Health and Social Care)

Details

Reports being published today for the Integration Joint Board (IJB) meeting on 8 October 2025, include a Financial Recovery Plan for 2025/26. The plan responds to demand for health and social care that is running ahead of the assumptions used to set this year's budget - a challenge reflected across Scotland and driven by rising need and complexity in our population.

Financial monitoring to the end of Month 5 (31 August) projects an overspend of £5.722m, reducing to £5.558m after applying the remaining general reserves of £0.164m.

Earlier today the Council's Finance and Resources Committee was told that mid-range assumptions for social care are being exceeded and that, under those conditions, the IJB budget is on course to overspend by around £5m. The majority of the pressure sits in social care, particularly care at home, care placements and complex care, with some health cost pressures linked to staffing and bed capacity.

Those challenges mean that despite the IJB's external auditors, Audit Scotland, concluding that there are effective financial management and reporting arrangements in place, the level of demand for services and the increasing complexity of care required to support the most vulnerable of residents continues to present significant financial challenges.

The Financial Recovery Plan being presented to the IJB sets out a package of immediate in-year actions totalling £0.950m, including: 

• Vacancy management and analysis of staffing demand where it exceeds budgeted levels
• Repurposing £0.350m of uncommitted earmarked funds (subject to Scottish Government approval
• Increased scrutiny and authorisation requirements for complex care requests

Recognising that demand is the key driver, the Financial Recovery Plan also set out further options for the IJB to consider, such as:

• Re-examining and considering commissioning models for care at home
• Introducing a waiting list for new packages of care
• Comprehensive review of eligibility criteria
• Accelerate recommissioning of Service Level Agreements and contracts alongside a review of the IJBs Strategic Plan

These additional actions will require further consultation, performance impact and impact assessments to be carried out, and the report to the IJB recognises that these actions may have an adverse impact on patients and clients and overall performance. The impact will therefore be closely monitored by the Chief Officer and be subject to regular updates to the IJB.

Given that the current financial recovery plan is unlikely to deliver a balanced position by 31 March 2026, formal requests for increased contributions from partner organisations will be made in line with the Integration Scheme. This has already been highlighted to the Director of Finance at NHS Tayside and the Chief Finance Officer at Perth and Kinross Council.

Our priority remains on providing safe, high-quality care for those most in need. We will continue to monitor closely, report regularly, and work with NHS Tayside and Perth and Kinross Council to manage demand, drive efficiency, and progress the transformation required for a sustainable system - consistent with our approach to date and across the sector nationally.