ITEM 11 2025-26 Delegated Health and Social Care Budget
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.
Page 1
REPORT Item No: 11 SUBJECT: 2025-26 Delegated Health and Social Care Budget 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 describes the financial allocation and budgets made available to the Integration Joint Board (IJB) for 2025/26 by North Lanarkshire Council and NHS Lanarkshire. 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) Agree to accept the delegated social care budget for 2025/26 in section 8.4 subject to any final adjustments in relation to recurring budget adjustments in March 2025 (2) Agree to accept the delegated health budget for 2025/26 in section 9.4 subject to any final adjustments in relation to recurring budget adjustments in March 2025 and any further funding allocated by the Scottish Government (3) Approve a drawdown of reserves, if required, in order to fund any shortfall in funding for 2025/26 (4) Acknowledge that both NHSL and NLC have passed through full budget uplifts as received from Scottish Government. 4. VARIATIONS TO DIRECTIONS Yes No N/A
Page 2
5. BACKGROUND/SUMMARY OF KEY ISSUES 5.1 North Lanarkshire IJB is a legal entity in its own right and is accountable for the stewardship of public funds and ensuring that its business is conducted under public sector best practice governance arrangements, including ensuring that public money is safeguarded, properly accounted for, and used economically, efficiently, and effectively. 5.2 The budget delegated by our two partner bodies, is used by the IJB to commission services, which are delivered by North Lanarkshire University Health and Social Care Partnership (the Partnership). The principles of the funding allocated by the two partner organisations is set out in the Integration Scheme, however, utilisation of this funding is delegated to the IJB. 5.3 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. 5.4 The role of the Chief Finance Officer (CFO) for the IJB includes both the adherence to professional standards as well as compliance with the Local Government (Scotland) Act 1973. For the IJB this includes the requirement to ensure a balanced budget is set. 6. CONCLUSIONS 6.1 This report sets out the implications of the Scottish Government budget for 2025/26 and provides an overview of the IJB’s budget allocation for 2025/26. 6.2 Over the medium term, significant uncertainty remains, and the Partnership will require to continue to plan for a wide range of potential scenarios. During the past number of years, the Partnership has taken a medium-term view of its financial position, agreeing transformation and redesign which have ensured a balanced budget year on year. However, the continuing rise in costs and demand, continues to provide uncertainty resulting in challenging times for services and the need for ongoing review and realignment of future transformation and savings plans. 6.3 In this context, it is more than likely that the Partnership will need to draw on the financial flexibilities available to the IJB to provide non-recurring support to balance the annual revenue budget position each year over the medium-term. 7. SCOTTISH GOVERNMENT BUDGET 2025/2026 7.1 The cabinet Secretary for Finance and Local Government announced the Scottish Government’s budget for 2025-26 in Parliament on 4th December 2024. The Director of Health & Social Finance said this budget provides: “a platform for the health and social care system to focus on reform and innovation. We must work as a whole system and across organisational boundaries to improve outcomes and deliver the best possible care within our available resources” 7.2 However it is widely expected that the public sector in Scotland will continue to face a very challenging financial outlook for the foreseeable future. 7.3 It therefore remains important that the Partnership ensures sufficient flexibility to manage, in a sustainable manner, the position which emerges over the coming years, with the likely scenario that a significant level of further recurring savings will be required.
Page 3
8. DELEGATED SOCIAL CARE BUDGET 2025/26 8.1 Similar to 2024/25 and as previously highlighted, demographic, and socio-economic factors continue to drive significant demand and cost pressures for 2025/26 relating to: • Funding for pay awards. • Cost pressures arising from contractual arrangements which are subject to renewal. • Financial impact of the negotiated application of the increased living wage across the sector. • Estimated increases associated with the National Care Home Rate (NCHR) contract. • Ongoing pressures on home support service in relation to costs associated with shifting the balance of care, supporting people to live safely at home for as long as possible and facilitating prompt discharge from hospital. • Increasing investment in self-directed support packages required to support adults and carers to achieve improved outcomes and live independently. 8.2 Using a range of informed assumptions, the CFO has estimated that the demand and cost growth for social care services in 2025/26 linked to the areas highlighted above, is likely to be in the region of a gross increase of circa £31m, including the increase to the living wage. 8.3 At its meeting on 20 February 2025, North Lanarkshire Council approved a recurring net uplift to the social care budget for the Scottish Living Wage of £7.793m. A further £0.300m has been approved to for the Children’s Social Care Pay Uplift, giving a total uplift from NLC of £8.093m. 8.4 The following table provides a summary of the indicative social care budget 2025/26 from North Lanarkshire Council: Social Care Budget 2025/26 £m Opening Budget 209.517 Uplift Scottish Living Wage 7.793 Children's Social Care Pay Uplift 0.300 2025/26 Budget 217.610 8.5 The CFO recommendation to the IJB is, to note and accept the delegated social care budget offer from North Lanarkshire Council for 2025/26 subject to any final adjustments in relation to recurring budget adjustments in March 2025. 9. DELEGATED HEALTH BUDGET 2025/26 9.1 Similar to social care, demographic and socio-economic factors continue to drive significant demand and cost pressures for our delegated health services in 2025/26 including: • Pay inflation and the impact of agenda for change. • Inflationary cost pressures across service level agreements on non-pay budgets. • Prescribing cost, volume, and short supply impact. 9.2 Using a range of informed assumptions, the CFO has estimated that the demand and cost growth for health services (not including Set Aside) in 2025/26 linked to the areas highlighted above, is likely to be in the region of a gross increase of circa £28m.
Page 4
9.3 The NHSL Board has approved a general allocation of £10.154m as well as a further £2.500m from the NRAC allocation giving a total contribution of £12.654m. 9.4 The following table provides a summary of the indicative health budget 2025/26 from NHS Lanarkshire: Health Budget 2025/26 £m Opening Budget 323.164 Set Aside Budget 77.397 General Allocation 10.154 Children's Social Care Pay Uplift 2.500 2025/26 Budget 413.215 9.5 The CFO recommendation to the IJB is, to note and accept the delegated health budget offer from NHS Lanarkshire for 2025/26 subject to any final adjustments in relation to recurring budget adjustments in March 2025, and any further funding allocated by Scottish Government during 2025/26. 10. FINANCIAL PLAN 2024/25 10.1 A 3 year Medium Term Financial Plan (MTFP) has been prepared taking the 2024/25 budget as a base line and updates on the key financial planning assumptions that will have the greatest impact on the Partnerships forecast financial position in the medium term. A range of risk-based scenarios were considered resulting in envisaged, pessimistic and optimistic positions with the envisaged position being the most appropriate for planning purposes. This medium-term position has an estimated recurring funding pressure in 2025/26 of £14.729m; to address this a number of service redesign and transformation proposal have been submitted to the IJB for approval as part of the MTFP report. 10.2 Alongside the MTFP, a Long Term Financial Outlook (LTFO) has also been prepared for the period 2025-2035 and highlights cost pressures ranging from £40.020m to £58.075m. This outlook reflects the economic outlook, adopting a strategic and sustainable approach linked to the delivery of priorities in the Strategic Commissioning Plan. These strategic priorities will continue to provide a focus for future budget decisions, where the delivery of core services must be balanced with the resources available. The financial plans and reserves strategy focuses on financial sustainability, acknowledging the uncertainty around key elements and the need to redirect resources to support the delivery of key priorities. 10.3 It is recognised that service redesign and savings plans take time to implement therefore, to mitigate the risk to the IJB, contingency reserves may be needed to fund the gap until the full savings can be realised. 11. IMPLICATIONS 11.1 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 ☐
Page 5
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 ☒ 11.2 ASSOCIATED MEASURE(S) Each partner is required to remain within their approved budgetary provision. 11.3 FINANCIAL This paper has been reviewed by Finance: Yes No N/A 11.4 RISK ASSESSMENT/RISK MANAGEMENT The strategic financial risks detailed in the IJB Risk Register have also been updated and are included in a separate report to the IJB. Relevant Risk Register Details Current Risk Level Risk Owner Financial Challenges Very High Nicola Scott National Set-Aside Budget High Claire Rae Hosted Services Medium Claire Rae Prescribing Activity and Costs Very High Claire Rae Third and Voluntary Sector Low Claire Rae Ineffective Governance Arrangements Low Claire Rae 11.5 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 Financial information is shared with stakeholders on a regular basis and
Page 6
shaping and influencing service development and delivery 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. 11.6 INEQUALITIES & FAIRER SCOTLAND DUTY Equality and Diversity Impact Assessment Completed & Fairer Scotland Impact Assessment Form Completed: Yes No N/A 12. BACKGROUND PAPERS None. Nicola Scott Chief Finance Officer Members seeking further information, please contact Nicola on 07581 007187. CHIEF ACCOUNTABLE OFFICER (or Depute)