ARGYLL and Bute Health and Social Care Partnership has already overspent by £1.4 million halfway through the financial year, it has been reported.
Members of the partnership’s (HSCP) integration joint board (IJB) have also been warned that it “is not operating in a financially sustainable way”.
More than £1.1m of the gap to date has been attributed to an overspend on social work services, mainly to do with children and families. The £1.4m figure is also projected for the end of the financial year in April.
A report on the HSCP’s financial position will be considered by the IJB at its meeting on Wednesday, November 19.
Head of finance and transformation James Gow said: “The overspend is driven by an increase in costs and numbers of Children in out of area residential placements, currently at 15.
“The forecast spend has reduced slightly as an improved cost forecasting process has been established which takes into account anticipated end dates for placements.
“Other budgets are forecast reasonably close to budget, however there is further work required to assess future agency spend as the forecast is in line with commitments which may be lower than actual spend through to the year end.
“The forecast also assumes further savings will be delivered including those associated with the threshold of care and care package reviews.
“The pay increase has been settled at four per cent, or one per cent greater than budgeted. It is expected that there will be funding to cover this cost pressure (still to be confirmed), one per cent extra on pay totals circa £370k which adds to recurring cost pressures.
“If the HSCP is able to operate social work/social care services within budget it will still have spent £3m that it does not have in 2026/27, this is the driver for managing spend down as quickly as possible.
“The current forecast overspend is largely due to the variance on children’s placements, it is expected that this will reduce as alternative arrangements are made for some children.
“The forecast overspend at present is approximately equivalent to the value of remaining general reserves relating to social work services.
“It is preferred that these reserves are carried into 2026/27 to mitigate the step increase in the budget gap in that year, and not used to fund overspending.”
Mr Gow added: “The HSCP is not operating in a financially sustainable way, spend and service demand is exceeding resourcing.
“Financial recovery and development of the savings programme for 2026/27 are priorities. Additionally the independent care sector are continuing to raise their concerns about sustainability throughout the sector.
“A further service closure within the learning disability service is being managed by the HSCP at present, as an indicator that this is a real risk.”
