ITEM 10 Medium Term Financial Plan 2025-2028 and Long Term Financial Outlook
North Lanarkshire Council · 19 March 2025
Back to Health and Social Care Integration Joint Board — 19 March 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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REPORT Item No: 10 SUBJECT: Medium Term Financial Plan 2024-2028 including the Long Term Outlook 2025-2035. TO: Integration Joint Board Lead Officer for Report: Chief Officer Author(s) of Report Chief Finance Officer DATE: 19 March 2025 1. PURPOSE OF REPORT 1.1 This paper is coming to the Integration Joint Board (IJB) For approval For endorsement For noting 1.2 This report advises the IJB of the medium term financial forecast position for 2025- 2028 as set out in the attached Medium Term Financial Plan and Long Term Financial Outlook. 2. ROUTE TO THE INTEGRATION JOINT BOARD 2.1 This paper has been: Prepared By: Chief Finance Officer ☒ Reviewed By: Chief Officer ☒ Endorsed By: ☐ 3. RECOMMENDATIONS 3.1 It is recommended that the IJB: (1) Acknowledge the assumptions and context of the Medium Term Financial Plan (2) Approve the Medium Term Financial Plan 2025-2028 (3) Approve the savings proposals to meet the savings gap in 2025/26 (4) Acknowledge the Long Term Financial Outlook for 2025-2035. 4. VARIATIONS TO DIRECTIONS 5. BACKGROUND/SUMMARY OF KEY ISSUES 5.1 The Medium Term Financial Plan (MTFP) outlines the financial challenges the University Health & Social Care Partnership (the Partnership) faces over the next three years and provides a framework which will support the Partnership to remain financially sustainable. Included within this plan is a Long Term Financial Outlook (LTFO) which provides board directors with a longer term view on the financial and demand pressures from 2025 to 2035. 5.2 The long term financial plan for 2024-2035 was approved by the board in March 2024 which highlighted total pressures ranging from £40.597m to £45.487m. Included in this was the recurring cost pressure identified for 2024/25 which resulted in a savings Yes No N/A
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target of £22.856m. Board Directors will recall that this target was to be split equally between 2024/25 and 2025/26, as at December 2024, 49% of the total target had been achieved. 5.3 Taking the approved 2024/25 approved budget as the new baseline, this MTFP updates the financial planning assumptions and projected funding gap for the three year planning period 2025-26 to 2027/28. 6. FINANCIAL OUTLOOK 6.1 Looking into 2025/26 and beyond, it is anticipated that the public sector in Scotland will continue to face a number of challenges in the years ahead. There is significant uncertainty over what the scale of this is likely to be and it is therefore important that the Partnership plans for a range of potential outcomes, ensuring sufficient flexibility to manage in a sustainable manner over the coming years. 6.2 In addition, it is clear from North Lanarkshire Council and NHS Lanarkshire financial outlook, that both partners anticipate they will be subject to significant pressure over the coming years with a further period of constraint and reduction in core funding. In this context, there is a greater risk that future uplifts in funding to the Partnership similar to that provided in previous years may not be deliverable. 7. MEDIUM TERM FINANCIAL PLAN 2025/26 – 2027/28 7.1 Using the financial planning assumptions detailed in Appendix 1 of the MTFP, a range of risk-based scenarios have been considered, resulting in envisaged, pessimistic and optimistic positions. Based on the projections it is recommended that the IJB progresses with a financial strategy based on the envisaged scenario. 7.2 The envisaged scenario projects an estimated budget gap of £51.854m over the 3 year planning period 2025/26 to 2027/28 of which £14.729m relates to 2025/26. 7.3 Section 8 of the MTFP details ‘Our Response’ and demonstrates the service redesign proposals to be implemented over the coming 12 months to address the £14.729m funding gap in 2025/26. 7.4 It is recognised that service redesign and savings plans take time to implement, therefore, to mitigate any delays from timing of implementation, contingency reserves may be needed to fund the gap until the full savings can be realised. Updates on the service redesign will be presented to the board throughout the year. 7.5 The MTFP assumptions have been extended for a further seven years up to 2034/35 to provide a long term outlook. This identifies cost pressures in 2028/29 of £40.020m rising to £58.075m in 2034/35. 7.6 The MTFP and LTFO are based on a range of demand and cost pressures which could be faced by the IJB over the long term. These assumptions are informed by both the local and national context for which there remains significant and real uncertainty. 7.7 Detailed below are the main areas of cost pressures which will be subject to ongoing review: • Future funding allocations • Future pay settlements • Cost of living and inflation • Contractual pressures and the living wage commitments • Demand led services including deprivation and health issues • Prescribing costs and availability
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7.8 It is therefore essential that the IJB continues to focus on the longer term financial challenge and where appropriate generate reserves to help: • Address future pressures on the assumption that the financial position is more than likely to remain challenging • To provide temporary funding to drive transformation • To build contingency reserves which will be crucial in ensuring the financial sustainability of the partnership in the medium term 7.9 Looking beyond the financial year and into the term of the financial plan, it is inevitably more difficult to forecast. It is important the IJB adopts a plan, not just in the delivery of strategic outcomes and services, but also from a financial perspective to ensure risks to the financial sustainability of the IJB are identified early, even though there may be uncertainty over the specific timing, scale, and ultimate effect. 7.10 On this basis, the IJB should continue to plan for a range of potential outcomes, ensuring sufficient flexibility to manage in a sustainable manner. Looking beyond 2025/26, a significant level of savings and redesign will be necessary to continue to deliver sustainable and modern services which meet the needs of service users and their families. 8. IMPLICATIONS 8.1 NATIONAL OUTCOMES People are able to look after and improve their own health and wellbeing and live in good health for longer ☐ People, including those with disabilities or long-term conditions, or who are frail, are able to live, as far as reasonably practicable, independently and at home or in a homely setting in their community ☐ People who use Health and Social Care Services have positive experiences of those services, and have dignity respected ☐ Health and Social Care Services are centred on helping to maintain or improve the quality of life of people who use those services ☐ Health and Social Care Services contribute to reducing health inequalities ☐ People who use Health and Social Care Services are safe from harm ☐ People who work in Health and Social Care Services feel engaged with the work they do and are supported to continuously improve the information, support, care, and treatment they provide ☐ Resources are used effectively and efficiently in the provision of Health and Social Care Services ☒ 8.2 ASSOCIATED MEASURE(S) Each partner is required to remain within their approved budgetary provision. 8.3 FINANCIAL This paper has been reviewed by Finance: Yes No N/A
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8.4 RISK ASSESSMENT/RISK MANAGEMENT The strategic financial risks detailed in the IJB Risk Register have also been updated where necessary. Relevant Risk Register Details Current Risk Level Risk Owner Financial Challenges Very High Nicola Scott Prevention and Detection of Fraud, Bribery and/or Corruption Low Claire Rae National Set-Aside Budget High Claire Rae Hosted Services Medium Claire Rae Prescribing Activity and Costs Very High Claire Rae Pharmacy Pressures within Prison Service High Claire Rae Third and Voluntary Sector Low Claire Rae Ineffective Governance Arrangements Low Claire Rae 8.5 ENGAGEMENT & PARTICIPATION Please tick the engagement and participation objectives that link(s) with this piece of work and provide further details on the engagement and participation that was undertaken. Objectives Further details ☒ Involve stakeholders in the development work aimed at achieving the national outcomes The Director of Finance of NHSL and the Chief Officer (Finance) of NLC both continue to be consulted on the financial position of the NL IJB. ☐ Provide stakeholders with information on how to get involved ☐ Ensure a diverse range of engagement and participation and opportunities are in place to suit different needs ☐ Measure how well we involve community stakeholders in the planning, design, and delivery of our services ☒ Provide regular feedback on how stakeholder engagement and participation is shaping and influencing service development and delivery Financial information is shared with stakeholders on a regular basis and is provided to the PFA and IJB on a quarterly basis. ☒ Provide support to enable stakeholder representatives to participate meaningfully and confidently at meetings ☐ Develop participation guidelines to ensure a common understanding and set of expectations for both stakeholders and partnership staff ☒ Support engagement planning and participation in localities, taking account of other engagement activity and local plans across the Community Planning Partnership IJB Financial Plan and Reserves Strategy aligns and supports the IJB Strategic Commissioning Plan to ensure robust financial monitoring and scrutiny.
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8.6 INEQUALITIES & FAIRER SCOTLAND DUTY Equality and Diversity Impact Assessment Completed & Fairer Scotland Impact Assessment Form Completed: Yes No N/A 9. BACKGROUND PAPERS None. 10. APPENDIX IJB Medium Term Financial Plan Appendix 1 Nicola Scott Chief Finance Officer Members seeking further information, please contact Nicola Scott on 07581 007187. CHIEF ACCOUNTABLE OFFICER (or Depute)