2025-26 Argyll Bute IJB un audited Accounts. v2docx
Argyll and Bute Council · 16 June 2026
Back to Argyll and Bute HSCP Audit and Risk Committee — 16 June 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Commonly known as Argyll and Bute Health & Social Care Partnership UN-AUDITED ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2026
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ARGYLL AND BUTE INTEGRATION JOINT BOARD ANNUAL ACCOUNTS CONTENTS Page 1 Page Management Commentary 2 Statement of Responsibilities 12 Annual Governance Statement 14 Remuneration Report 21 Financial Statements: - Comprehensive Income and Expenditure Statement - Movement in Reserves Statement - Balance Sheet 23 Notes to the Financial Statements: 1. Material Accounting Policies 2. Events After the Reporting Period 3. Taxation and Non-Specific Grant Income 4. Debtors 5. Related Party Transactions 6. Usable Reserve: General Fund 7. Critical Judgements and Uncertainty 8. Audit Fees 26 Independent Auditors Report 33
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 2 1. INTRODUCTION This document provides the Financial Statements of the Argyll and Bute Integration Joint Board (IJB) for the year ended 31 March 2026 and reports on performance. The main purpose is to demonstrate the stewardship of public funds entrusted to the HSCP for the delivery of its Strategic Plan. The requirements governing the format and content of the annual accounts are contained in The Code of Practice on Local Authority Accounting. These Accounts have been prepared in accordance with the Code. The Management Commentary provides an overview of the IJB’s financial position and operational performance for the year. This section also provides a summary of the risks which may impact in the future. The IJB has had a positive year from a financial perspective. It has operated within its budget, delivered savings and increased its general reserves. The delivery of the savings programme has been challenging but necessary to ensure the medium-term financial sustainability of the HSCP. The reserves held by the IJB are mostly earmarked for specific future costs, projects and investments and provide some degree of financial resilience and mitigate financial risk to partners in 2026/27. Additionally, reserves have been allocated to support the budget in 2026/27 to maintain services as far as is possible in the face of the cost and demand pressures currently challenging the Health and Care sector. This approach is not sustainable in the longer term and the HSCP continues to develop and implement its savings plans to ensure that it can remain sustainable. Current service provision is configured in a way that is not affordable, therefore service change and delivery of further efficiency savings will remain priorities in the coming years. This is consistent with longer term planning outlined by the Scottish Government in its medium-term financial strategy and public sector reform agenda. 2. THE INTEGRATION JOINT BOARD (IJB) The Argyll and Bute Health and Social Care Partnership (HSCP) is responsible for the planning and delivery of all community and acute health and social care services for adults and children. This includes services we deliver directly and a range of services which are purchased from external providers including NHS Greater Glasgow and Clyde. The Partnership is a distinct legal entity with a board of governors, the IJB which has responsibility and accountability for the planning, resourcing and oversight of the delivery of integrated services as described in its Strategic Plan. The IJB was delegated resources and responsibility for Health and Care service delivery from 1 April 2016. Membership of the IJB includes eight voting members with four Elected Members nominated by Argyll and Bute Council and four Board Members of NHS Highland. In addition, there are non-voting appointees representing other sectors and stakeholder groups, such as the Third Sector, Independent Sector, Patients and Service Users, Carers, individuals with lived experience and staff. The Scottish Government are in the process of further strengthening representation from these groups by giving them full voting rights as IJB members in 2026/27.
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 3 Argyll and Bute is home to 86,000 people, covers an area of 690,946 hectares and is the second largest local authority by area in Scotland. It has 23 inhabited islands, with 17% of the population living on islands. Argyll and Bute provides a number of unique opportunities for those who live and work here, however we also face a number of challenges. The geography associated with dispersed communities in remote and rural areas and islands presents a challenge in delivering services within the resources available. Of the population, 69% live in “remote” or “very remote” areas and 45% live in areas in the 20% “most deprived for geographic access to services”. Argyll and Bute also has a higher proportion of older people than Scotland as a whole, with 12.4% aged 75 and over compared to 8.5% in Scotland. The costs associated with providing comprehensive services to an ageing population continue to increase and demographic change is having an impact on demand for services and our ability to recruit staff to deliver those services. 3. HEALTH AND SOCIAL CARE PARTNERSHIP STRATEGIC PLAN The HSCP vision and priorities for health and social care are outlined in its new Joint Strategic Plan (JSP) 2026-2031. The new plan has been developed throughout the year and included a period of extensive engagement to ensure that stakeholders and communities had the opportunity to influence the plan. The new plan has also had to take account of the current context which is characterised by continuing increasing demand, financial and staffing constraints. The JSP can be accessed at: https://www.nhshighland.scot.nhs.uk/about/argyll-and-bute-health-and-social-care-partnership/argyll- and-bute-hscp-publications Our Vision is that: “People in Argyll and Bute live healthy, independent lives in resilient communities. Individuals are enabled and supported to thrive and fulfil their potential through integrated, person centred health and social care that is delivered close to home, focused on prevention, and informed by the people who use it.”
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 4 4. PERFORMANCE MANAGEMENT AND REPORTING The Integrated Performance Management Framework and dashboard has been developed to ensure performance and improvement activity is reported in an accessible way and provides a holistic overview of performance against a range of internal performance indicators and the National Health & Wellbeing Outcomes. The performance measures continue to be refined to improve their relevance and reliability which in turn helps enable improvement. The monitoring and reporting process ensures the HSCP is able to report performance against strategic priorities and provide nationally reported data on performance under the following headings: 1. National Health and Wellbeing Outcome Indicators 2. Ministerial Steering Group Performance Indicators 3. Unscheduled Care 4. Delayed Discharges 5. IPMF Performance Indicators (operational performance) The Annual Performance Report provides a detailed overview of the progress that has been made in addressing health and care priorities, this is available on the website. The process of managing COVID related backlogs of diagnosis and treatment and returning services to previous levels continues to be challenging. The situation is being exacerbated by the demographic change further driving increasing demand for services. The Scottish Government has requested all Health Boards focus upon manging down delayed discharges from hospital and waiting lists, particularly very long waits. As a consequence of our reliance on NHS Greater Glasgow and Clyde (NHS GG&C) for specialist hospital services, our planning has been
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 5 undertaken in partnership with them. The following table summarises key performance measure regarding waiting times: Total on Waiting List @ March 25 Total on Waiting List @ March 26 Length of Wait (weeks) March 2025% > 12 Weeks March 2026% >12 Weeks Target % March 2025% > 52 Weeks March 2026% > 52 Weeks Target % Consultant Outpatient Clinics 1932 2266 49% 34% 46% 6.9% 1.8% 0% The HSCP would not wish anyone to be waiting long periods to access services, however this remains the situation that many continue to find themselves in across Scotland. Performance against targets improved in 2025/26 and the proportions of people waiting more than 12 weeks for an outpatient appointment reduced to below target and the number waiting more than 52 weeks reduced to 1.8% of those waiting or around 40 people, again a significant improvement. These waits relate to direct acute care activity and there are additionally residents awaiting treatment with other Health Boards. The overall number of people on waiting lists increased, but the numbers waiting for lengthy times has reduced. The rural and small scale nature of many services continue to present a challenge to the ability of the HCSP to increase service provision in the short term. The Annual Performance Report provides a more comprehensive overview of performance and benchmarks. The IJB is prioritising the re-mobilisation of services to reduce long waits and maintain system flow, including the management of delayed discharges from hospitals. 5. FINANCIAL PERFORMANCE 2025-26 The delivery of savings and the financial recovery plan have been critical in delivering a positive financial outturn. The HSCP operated within budget and was able to build up its general reserve slightly to improve its financial flexibility and resilience. An overall underspend against budget totalling £2.9m or 0.7% is reported and will be carried forward to help the IJB manage its finances in future years. Reserves increased as a result of additional funding received towards the end of the year and due to the underspend. These funds are earmarked and are being held largely to pay for expected future costs and to fund committed projects. These are also required to fund the budget deficit in 2026/27 and to support service sustainability. General reserves, which are available for the IJB to use at its discretion, increased from to £2.6m to £4.7m or just over 1% of annual spend. General reserves remain below the target set out in the reserves policy (2%). The overall financial resilience of the IJB has improved slightly as a consequence of the small underspend. The broader context within which the HSCP is currently operating is extremely challenging with increasing financial pressures being experienced. The HSCP has relied on
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 6 non-recurring savings to fund its services and is spending in excess of recurring resourcing. The HSCP is going through a process of taking action to bring spend back into alignment with funding. This will take a number of years and will have an impact on services and is being planned and delivered in the context of: • on-going inflationary pressure (pay costs and commissioned service costs); • increasing demand as a consequence of demographic change and social factors; and • persistent workforce recruitment and retention challenges. Enhanced financial management processes are in place to maintain focus upon managing the situation including: • Vacancy management. • Increased controls and reporting of agency and locum spend. • Enhanced approval process for agency staffing. • Care at Home efficiency processes which restricts delivery of care to budgeted hours. • Implementation and monitoring of the ceiling of care policy. The future challenges facing health and social care services include: • Ageing demographic resulting in increasing demand for older adult services’ • cost increases relating to pay, home-care and residential care contracts continuing to exceed funding increases. • reductions in capacity in the independent sector as providers continue to withdraw citing financial viability and staffing issues. • Continued lack of availability of staff resulting in increased costs as services are supported by agency staff. The cost is exacerbated by accommodation shortages and costs. The final outturn for 2025/26 was an underspend against budget of £2.9m. This has been carried forward to fund cost pressures and the budget gap in 2026/27. The following table summarises financial performance analysed between Health and Social Work services: Service Actual £000 Budget £000 Variance £000 % Variance COUNCIL SERVICES TOTAL 100,483 100,540 57 0.1% HEALTH SERVICES TOTAL 295,698 298,555 2,857 1% GRAND TOTAL 396,181 399,095 2,914 0.7% Allocation to General Reserves - NHS 2,857 Allocation to General Reserves – Social Work 57 Year End Balance 399,095 399,095 0 0%
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 7 Savings Delivery The budget included a savings target of £8.9m. During the year £8.0m or 90% of the target was delivered. The savings programme is managed and reported rigorously throughout the year and savings delivery contributed to the improved financial position and helps the HSCP move towards financial sustainability in the longer term. There were a small number of projects which were not delivered during the year and these remain priorities for future years. Given the longer term outlook, it is anticipated that the IJB will be required to develop further savings projects. Financial Statements Comprehensive Income and Expenditure Statement This statement shows the cost of providing services according to accepted accounting practices. There are no statutory or presentational adjustments which affect the application of the funding received from partners, therefore the movement in the General Fund is solely due to the transactions summarised in the Comprehensive Income and Expenditure statement. Reconciliation of Comprehensive Income and Expenditure Statement to Financial Outturn: The table below reconciles the surplus on the provision of services of £10,343k as noted in the Comprehensive Income and Expenditure Statement to the financial outturn: £000 £000 Surplus on Provision of Services 10,343 Less Statutory Adjustments that don’t feature in financial outturn 0 Movement in General Fund Balance 10,343 Reserves released for the delivery of services (5,643) New Earmarked Reserves 15,986 Increase in General Fund Balance 10,343 Movement in Reserves Statement This statement shows the movement on the IJB’s Reserves. It has one reserve, its General Fund, a resource backed reserve which can be used to fund future expenditure. The balance increased from £20.7m to £31.1m. These resources have generally been earmarked for specific purposes, including to fund the revenue budget in 2026/27. The IJB spent £5.6m of its reserves during the year including spend on a number of projects as detailed in note 6, including: • Children’s Acute Mental Health Services £244k. • Delivery of E Health projects £245k. • Hospital at Home £414k. • The Prevention Programme £258k. • Campbeltown Hospital / X Ray £352k.
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 8 • Final phase of the Tiree Care Home and care service remodelling £209k to deliver a more sustainable model on the island. The Reserves Policy is that a prudent level of General Fund reserve is 2% of annual spend, this equates to £8m. As at 31 March 2026 general reserves were below this level at £4.7m. Earmarked reserves increased as a consequence of new resource allocations to fund agenda for change pay liabilities, service sustainability, system flow and primary care improvement. Note 6 provides detail on the reserves and the purposes for which they are earmarked. Balance Sheet The Balance Sheet shows the value of the IJB’s assets and liabilities as at 31 March 2026. It does not hold fixed assets or invest capital resource, these responsibilities sit with the partner bodies. There are explanatory notes which accompany the Balance Sheet. The net worth of the IJB as at 31 March 2026 is £31.1m, supported by the General Fund. The balance consists of Short Term Debtors relating to earmarked reserves for delegated services and recognises the amounts owed to the IJB by NHS Highland and Argyll and Bute Council. There are no provisions recognised on the Balance Sheet. NHS Highland made a year-end provision for annual leave of £1.3m (£1.2m in the prior year) for HSCP staff. It also made a provision of £0.1m for potential regrading costs and £0.2m for IR35 liabilities relating to medical staff. Argyll & Bute Council have made a provision for £77k for potential liabilities relating to rates increases regarding Children’s and Families care packages and £168k relating to a backlog of energy cost billing. All provisions are reflected in the outturn position. There are historic provision balances and contingent liabilities relating to services provided prior to 1 April 2016, these will be recognised as required in the partner Annual Accounts. There could be further consideration of funding requirements for the IJB where the historic funding of these provisions are insufficient and may affect future IJB funding arrangements. 6. FINANCIAL OUTLOOK, RISKS AND PLANS FOR THE FUTURE Budget 2026-27 The 2026/27 budget for was approved by the IJB in March 2026 following extensive public engagement. The budget relies upon a savings programme totalling £8m and the use of reserves. The approval of the savings programme has been particularly challenging as it has required reductions in services and constraints upon the resources allocated to third sector partners. Argyll and Bute Council allocated additional resources to the HSCP to mitigate the impact of the budget savings. It is anticipated that further savings will be required in the future and work on this is on-going. Service Transformation and the delivery of the approved savings program are key to ensuring services are delivered in sustainable way. While the budget position is extremely challenging, the HSCP has operated within the resources that have been available to it for the past six years.
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 9 It has also built up a small degree of financial resilience. Operating on a financially sustainable basis is a strategic priority, significant work is required to address the underlying deficit, particularly within NHS services as Greater Glasgow and Clyde are increasing charges for services delivered to Argyll & Bute residents. The Transformation Board receives regular updates on the agreed transformation programmes and projects, funding has been set aside to fund strategic change projects. The new Joint Strategic Plan recognises this extremely challenging context. Medium to Longer Term Outlook Looking to 2027/28 and beyond, it is anticipated the Scottish public sector will continue to face financial challenge. For Health and Social Care, increasing demand driven by demographic change combined with costs driven by pay and general inflation is expected to mean that cost pressures will exceed funding increases. This context has been outlined by Audit Scotland, the Institute for Fiscal Studies and the Scottish Government in its Medium-Term Financial Strategy and its intention to drive public sector reform. The impact of inflation and reducing real terms value of public funding are likely to present a challenge when coupled with increasing demand for services, workforce shortages and an ageing demographic. The HSCP will continue to update its medium-term financial planning as the future policy direction and impact of the reform agenda becomes clear. Financial pressures will require to be managed through continuing value for money, charging for services, efficiency improvement, the implementation of new ways of working and some reductions in service delivery. NHS services are operating with an underlying deficit and there is an additional pressure in respect of the SLA with Greater Glasgow and Clyde. The situation is not sustainable and spend reduction is required. It is anticipated that cash releasing efficiency savings of 3% or around £12m per year will be required. Financial Risks The IJB has a robust approach to Risk Management and responsibility for oversight of financial risks and mitigations sit with its Finance & Policy Committee. Financial risks are considered and reported on a regular basis. Key financial risks which have an assessed value of £500k or more have been identified. The main financial risk facing the IJB (and NHS Highland) relates to the increased charging for services provided by NHS Greater Glasgow and Clyde: Identified Risk Estimated Value £000 Summary of Mitigations Increased SLA charges from NHS Greater Glasgow and Clyde. £12m in 2026/27. £16m recurring. Diligence regarding activity levels and costs. Engagement between NHS Highland, NHS Greater Glasgow and Clyde and Scottish Government. Consideration of potential actions to reduce scale of charge or make compensating changes to local services.
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 10 Sustainability of service providers – providers reduce or close provision resulting in additional costs such as increased agency and accommodation as the HSCP is required to identify alternative ways of providing services. £750k (£0.5m- £1.5m range) On-going dialogue, monitoring and review. Engagement with partners. The Care at Home service transformation project and consideration of new ways of working in some localities Inflation – macroeconomic conditions and on-going conflicts which may result in pay and non-pay inflation exceeding budgeted allowances. £500k (£0.5m- £1.5m range) Allowance made for inflation in the budget, performance monitoring, continuous review of contract rates and pricing. Delivery of savings. Monitoring of energy cost and travel impact of increased fuel prices. Staff recruitment – inability to recruit staff across NHS and social care services results in on-going utilisation of agency staffing. £500k (£0.5m- £1.5m range) Workforce strategy, targeted recruitment action, development of improved accommodation options. Savings – failure to deliver the savings programme in full during the year contributes to a budget overspend and failure to achieve financial objectives. £500k (£0.5m- £1.5m range) Project management processes and funds held in reserve. Service Demand – Older adult service demand continues to increase driving spend above budget on residential care and care @ home £500k (£0.5m- £1.5m range) Care at home efficiency, monitoring of care home occupancy and potentially restrictions of service. The macroeconomic environment remains a risk, whilst the implications for the HSCP of higher inflation can be modelled and are understood, the impact upon some of the most vulnerable in the communities served by the HSCP is of concern. Increased poverty and impacts on health and well-being can be expected, this in turn may further increase service pressures along with the adverse impact covid lockdowns have had. The HSCP continuously seeks to consider its strategic context and is undertaking specific work to examine how it can manage the service impact of demographic change. Additionally there are a number of government policies and new legislation which will have direct and indirect financial implications for the HSCP. The process of horizon scanning and modelling the financial implications, examples include: • The Care Reform Act; • Keeping the Promise; and • The Health and Care Staffing Act. The HSCP has identified the following high grade strategic risks: • Sustainability of commissioned service providers; • Workforce recruitment and retention; • Infrastructure condition and suitability; • Long term financial sustainability; and • Socio-economic situation and cost of living crisis.
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Management Commentary Page 11 7. CONCLUSION The Integration Joint Board’s final outturn position for 2025/26 was a small underspend against its budget. This is welcome and has enabled the HSCP to slightly increase its general reserve balance. The delivery of the savings programme and the recovery plan have been critical in improving the financial performance. Whilst financial targets have been achieved in 2025/26, there remains significant challenges ahead and the impact on the services that can be afforded and delivered is of concern. The IJB still has a structural deficit relating to its NHS services which requires to be addressed along with NHS Highland. The HSCP ended the year with total reserves of £31.1m including its general reserves of £4.7m, these are mostly committed to funding the 2026/27 budget gap, service sustainability and agenda for change staffing costs. The environment remains challenging as there are ongoing service pressures. The impact of inflation and cost of living crisis is resulting in people requiring increasing levels of health and social care support. The public funding environment is expected to worsen and will make it increasingly challenging to operate current services on a financially sustainable basis. The identification and delivery of efficiency savings is crucial, this will inevitably result in further reductions in the service offer. The demographic changes now being experienced will result in an incremental increase in demand for service each year, financial and staffing constraints mean that this cannot be managed without service change and a shift towards increasing preventative approaches. Making best use of the resources available is now critical to ensure that the HSCP can continue to deliver services in the best possible way for the communities it serves. 8. ACKNOWLEDGEMENTS We would take this opportunity to acknowledge the effort in producing the Annual Accounts and to record our thanks to members of the Integration Joint Board and staff for their continued hard work and support. Graham Bell Evan Beswick James Gow Chair Chief Officer Head of Finance Date TBC Date TBC Date TBC
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Statement of Responsibilities Page 12 THE INTEGRATION JOINT BOARD’S RESPONSIBILITIES: The Integration Joint Board is required: - to ensure the Annual Accounts are prepared in accordance with the legislation (The Local Authority Accounts (Scotland) Regulations 2014), and so far as is compatible with that legislation, in accordance with proper accounting practices (section 12 of the Local Government Act 2003); - to make arrangements for the proper administration of its financial affairs and to secure that the proper officer of the board had responsibility for the administration of those affairs (section 95 of the Local Government (Scotland) Act 1973). In this organisation, that officer is the Head of Finance; - to manage its affairs to secure economic, efficient and effective use of its resources and safeguard its assets; and - to approve the Annual Accounts for signature. I confirm that these Annual Accounts were approved for signature by the Argyll and Bute Integration Joint Board at its meeting on Date TBC. Signed on behalf of the Integration Joint Board: Graham Bell Chair Date TBC
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Statement of Responsibilities Page 13 THE CHIEF FINANCIAL OFFICER’S RESPONSIBILITIES: The Chief Financial Officer (Head of Finance) is responsible for the preparation of the Integration Joint Board’s Annual Accounts in accordance with proper practices as required by legislation and as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Accounting Code). In preparing the annual accounts the Chief Financial Officer is responsible for: - selecting suitable accounting policies and applying them consistently; - making judgements and estimates on a reasonable basis; - complying with legislation; - complying with the Local Authority Code of Practice (in so far as it is compatible with legislation). The Chief Financial Officer is also required to: - keep proper accounting records which are up to date; and - take reasonable steps to ensure the propriety and regularity of the finances of the Integration Joint Board. I certify that the financial statements give a true and fair view of the financial position of the Argyll and Bute Integration Joint Board as at 31 March 2026, and its income and expenditure for the year then ended. James Gow Head of Finance 16 June 2026
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Annual Governance Statement Page 14 INTRODUCTION The Annual Governance Statement explains Argyll and Bute Integration Joint Board’s (IJB) governance arrangements and reports on the effectiveness of its system of internal control. SCOPE OF RESPONSIBILITY The IJB is responsible for ensuring that its business is conducted in accordance with the law and appropriate standards, that public money is safeguarded, properly accounted for and used economically, efficiently and effectively. In discharging these responsibilities, the IJB has put in place arrangements for governance of its affairs which includes a system of internal control. This is based on an ongoing process designed to identify, prioritise and manage risk. The system aims to manage risks effectively and proportionately to deliver the IJB’s objectives. The IJB places reliance on the NHS Highland and Argyll and Bute Council systems of internal control. These support compliance with both organisations’ policies and promote achievement of their aims and objectives, as well as those of the IJB. The system can only provide reasonable and not absolute assurance of effectiveness. GOVERNANCE FRAMEWORK The IJB is an independent legal entity from both Argyll and Bute Council and NHS Highland, with a separate governance framework. The IJB comprises eight voting members with four Elected Members nominated by Argyll and Bute Council and four Board members of NHS Highland. In addition there are a number of non-voting appointees representing other stakeholder groups, such as the Third Sector, Independent Sector, Patients and Service Users, Carers and Staff. The arrangements for the operation, remit and governance of the IJB are set out in the Integration Scheme which has been prepared and approved by Argyll and Bute Council and NHS Highland. The IJB, via a process of delegation from the Health Board and Local Authority has responsibility for the planning, resourcing and operational delivery of all integrated health and social care services within Argyll and Bute. The scheme of integration was revised, as required by legislation, and was approved by Scottish Government on 23 March 2026. It is published on the Council and NHS Highland websites. The funding available to the IJB is dependent on the funding made available to and by Argyll and Bute Council and NHS Highland. The IJB is therefore reliant on both partners for the resources to deliver health and social care services. The main features of the governance framework in place during 2025-26 were: • The Integration Scheme outlines the scope and functions of services that are delegated, the clinical and care governance, strategic planning, financial and operational management arrangements.
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Annual Governance Statement Page 15 • The IJB operates within an established procedural framework. The roles and responsibilities of Board members and officers are defined within Standing Orders, the Integration Scheme, Financial Regulations and Standing Financial Instructions; all subject to regular review. • The strategic vision, mission and values of the IJB are set out in the Strategic Plan and are aligned to the health priorities outlined by the Scottish Government in the Population Health Framework. • Effective partnership working with the Council and NHS Highland ensures delivery of the Strategic Objectives, through information sharing and clear lines of responsibility. • Members of the IJB subscribe to, and comply with, the Standing Orders and Code of Conduct. The Standards Officer is responsible for advising and guiding members of the Board on issues of conduct and propriety. A register of interests is held for Board members and senior officers. • Appropriate training, development and induction is provided for all new IJB members. Performance Development and Review schemes are in place for all staff through each partner agency, the aim of which is to focus on their individual performance and development and contribution to meeting service objectives. • Four Locality Planning Groups have been established and meet quarterly, they aim to provide an effective mechanism for local leadership of service planning and a way for localities to influence how resources are allocated in their area and allow them to contribute to the development and delivery of the Strategic Plan. • Effective scrutiny and decision making is supported by the formal submission of reports, findings and recommendations by Audit Scotland, Inspectorates and the Internal Audit service. • The decision making structure whereby the committees of the IJB have agreed Terms of Reference. These include the Clinical and Care Governance Committee, Audit and Risk Committee, Finance & Policy Committee, Strategic Planning Group and Locality Planning Groups. Terms of reference and the annual reporting framework are formally approved by the IJB and are reviewed regularly. • The output from committees is publicly available and reported through minutes being considered by the IJB. All committees self-assess their performance and provide an annual report to the IJB. • The Integrated Performance Management Framework focusses on embedding a performance management culture throughout the organisation with regular reporting to the IJB. The IJB prepares an Annual Performance Report, this is submitted to Scottish Government and is publicly available. • Reliance on the procedures, processes, policies and operational systems of Argyll and Bute Council and NHS Highland where these are not operationally delegated. The IJB key governance documents are subject to periodic review. • The legislative framework requires the Chief Officer to be a single point of overall strategic and operational advice to the IJB and to be a member of the Senior Management Teams of Argyll and Bute Council and NHS Highland. • Robust Risk Management processes are in place and the IJB have set their risk appetite to ensure management actions align risk management priorities. IJB meetings take place on a hybrid basis with in-person attendance encouraged, most committee meetings continue to take place by remote conferencing. This continues to be an efficient way of
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Annual Governance Statement Page 16 conducting business considering the geography of Argyll & Bute. Members of press and public were enabled to attend IJB meetings, and the recording of each meeting was subsequently published alongside the minutes. THE SYSTEM OF INTERNAL FINANCIAL CONTROL The governance arrangements described operate on the basis of a system of internal controls. This is based on a framework of regular management and financial information, financial regulations, administrative procedures, management supervision and a system of delegation and accountability. Development and maintenance of the system is undertaken by managers within the IJB. During 2025-26 this included the following: - Financial Regulations and guidance relating to financial processes and procedures, these were updated in May 2024. - Formalised budget setting process, a three-year budget outlook and identification of new savings projects. - Regular review of detailed financial performance reports. - Formal programme and project management discipline. - Regular Finance and Policy Committee meetings to provide scrutiny of the financial position and progress with savings and service transformation. - An effective and independent Internal Audit function. - Integrated financial reporting and financial risk management. - An extensive public engagement process to inform the development of the 2026/27 budget. The system of internal financial control can provide reasonable and not absolute assurance and is designed to manage risk to a reasonable level. Responsibility for maintaining and operating an effective system of internal financial control rests with the Head of Finance. The IJB’s financial management arrangements conform to the governance requirements of the CIPFA statement: ‘The Role of the Chief Financial Officer in Local Government (2016)’. In relation to managing the risk of fraud and corruption the IJB relies upon the financial regulations, processes and procedures put in place and operated by both partners. Its Audit & Risk committee review arrangements for managing fraud risk, including through the work of its internal and external auditors. These arrangements are considered to provide adequate assurance on the management of fraud risk and are considered to be compliant with CIPFA’s Code of Practice on Managing the Risk of Fraud and Corruption. UPDATE ON GOVERNANCE IMPROVEMENT ACTIONS A number of areas for development in respect of governance have been progressed and this has resulted in a marked improvement in the way in which the IJB operates and is governed. The action plan is now fully implemented, highlights included the development of the Workforce plan, the roll out and on-going development of the Integrated Performance Management System, the development of the engagement strategy and training and development for IJB members.
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Annual Governance Statement Page 17 DATA PROTECTION The HSCP is committed to the highest standards of Data Protection and has put in place arrangements to ensure compliance with the General Data Protection Regulations with NHS Highland and Argyll & Bute Council. There were no notifiable data breaches in 2025/26 and one data breach in the prior year which was resolved, and upon investigation, no personal data had been disclosed. INTERNAL AUDIT The IJB is required to put in place adequate and proportionate internal audit arrangements to provide independent assurance on risk management, corporate governance and system of internal control. Following a competitive tendering process, Argyll and Bute Council Internal Audit Service were contracted as internal auditors for the IJB from 1 April 2021. This contract was extended for a further period of three years from 1 April 2024. The IJB complies with “The Role of the Head of Internal Audit in Public Organisations” (CIPFA) and operates in accordance with “Public Sector Internal Audit Standards” (CIPFA). The Chief Internal Auditor reports directly to the IJB Audit and Risk Committee with the right of access to the Head of Finance, Chief Officer and Chair of the IJB Audit and Risk Committee on any matter. The annual programme of internal audit work is based on a strategic risk assessment and is approved by the IJB Audit and Risk Committee. The role of the Audit and Risk Committee is to provide the IJB with independent assurance on the adequacy of the risk management framework, the internal control environment and the integrity of the financial reporting and annual governance processes. Membership of the Audit and Risk Committee includes six members of the IJB. Professional advisors, the internal auditor and external auditor support the committee and attend where appropriate. The approved Audit Plan for 2025/26 included reviews of: • IJB Governance Arrangements • Partnership Governance • Workforce Planning • Payroll procedures for Care at Home • Care Assessment and Resources Allocation – Adult Care In addition, the Committee considered a wide range of reports including several published by Audit Scotland. It also reviews performance in implementing audit recommendations. As at the end of the year the HSCP had implemented 11 of its outstanding recommendations with a total of 17 outstanding at the year end. The implementation of the outstanding recommendations is a priority for the management team. The Chief Internal Auditor provides the Audit Committee with an annual report on audit activity for the Integration Joint Board. The annual report includes an independent opinion on the adequacy and effectiveness of the systems of governance and internal control. For financial year
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Annual Governance Statement Page 18 2025/26 the overall conclusion of the Internal Auditor is to provide a reasonable level of assurance on the adequacy of internal controls and governance arrangements within the IJB. The Chief Internal Auditor also summarised concerns about the financial challenges facing the HSCP in the longer term which will require both savings to be identified and effective delivery of these savings in order to maintain financial sustainability and minimise the financial risk to both parent bodies. The Annual Internal Audit Report also notes that financial sustainability continues to be an issue throughout the Health and Social Sector as reported on several occasions by Audit Scotland. BEST VALUE The IJB has a statutory duty to provide best value as a designated body under section 106 of the Local Government (Scotland) Act 1973. The Annual Performance Report sets out how the IJB fulfilled its obligations for best value in that year. The Annual Performance Report is publicly available. A short summary against the 8 best value themes is given below: Vision and Leadership The IJB and Senior Leadership team set clear direction and strategy as expressed in the Strategic Plan and Commissioning Strategy. There are strong mechanisms for contributions from the Locality Planning Groups and the Strategic Planning Group into these documents. The IJB approved its new joint strategic plan and its budget and savings plan for the 2026/27 financial year. Governance and Accountability The IJB has an open and transparent governance system in place. It seeks to continually develop and improve in response to emerging good practice and independent audit review. Support for the system of governance is provided by Argyll and Bute Council, this ensures that it is properly administered. Comprehensive and clear Board minutes and papers continue to be published and meetings are open to the public. The IJB has agreed to make sub-committee meetings open for public attendance to further improve its open and transparent approach to governance. Effective use of resources The Finance & Policy Committee meet regularly to scrutinise performance against budget, the delivery of savings and the Transformation Programme. Improving financial management and governance has been a priority for a number of years, steps taken have contributed to the improved financial performance and resilience. It continues to seek to identify ways of improving efficiency and has been able to invest in longer term service transformation. The financial and demographic challenges facing the health and social care sector are resulting in increasing pressure on finances service and its staff. There is an ongoing focus on efficiency, savings and service reductions as a consequence. Partnership and Collaborative Working
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Annual Governance Statement Page 19 Effective partnership working is a core element of the way in which the IJB has been established. The IJB works closely with NHS Highland and Argyll and Bute Council. The Chief Officer is a member of both Strategic Management Teams. In addition the HSCP works closely with third sector partners and its commissioned service providers by holding regular meetings with strategic partners and stakeholders. This has continued throughout 2025/26 and illustrates an ethos of partnership working and co-production. Examples of effective partnership working during include the purchase of the Kintyre Care Centre, the remodelling of care services and the care home on Tiree, the outcomes from the Coll Collaborative Group, the establishment of the Prevention Programme and participation in several place-based programmes. However, it is acknowledged that partnership working has become more challenging as a consequence of the budget decisions which have had to be made by the IJB, these have had an adverse impact on the resourcing provided to 3rd sector partners. Community Responsiveness The Locality Planning Groups ensure that local concerns are considered and feed into the Strategic Plan. The Engagement Strategy ensures that consultation and engagement is carried out before policy changes are agreed. Most recently this has been demonstrated in the high levels of public engagement in the budget engagement process and in the development of the new Joint Strategic Plan. A commitment to co-production is an underlying theme and work is now underway to develop new models of service delivery with community based partners. Fairness and Equality A commitment to fairness and equality is at the core of the IJBs purpose, strategy and vision. The HSCP provides a wide range of essential and critical services to the most vulnerable in society. Equality Impact Assessments on new projects plans and strategies include an assessment of socio-economic impacts and islands impacts. Sustainability & Carbon Reduction Carbon reduction remains an important objective for all public bodies. There are a number of strands to the approach including: • Remote provision of services and remote working to reduce travel for staff and service users. There has been extensive use of Near Me for remote consultations where appropriate, and continued utilisation of Microsoft Teams; • The use of drones for transporting items such as laboratory samples from islands and remote areas; • Increasing electric vehicle charging infrastructure and investment in the electrification of the fleet; • Securing of funding to roll out installation of LED lighting; • Investing in management capacity to develop a strategic approach to the HSCP estate to develop capital schemes to reduce carbon emissions; • The commissioning of consultancy services to identify opportunities for carbon reduction across the estate;
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Annual Governance Statement Page 20 • Identification of property backlog maintenance and improvement issues to enable a fabric first approach to energy reduction; and • The rationalisation of the estate through improved co-location arrangements. Performance, Outcomes & Improvement The HSCP reports performance in a holistic way and it has implemented its Integrated Performance Management Framework, this remains subject to further improvement and development. The HSCP continues to work to increase activity levels and address the backlog of treatment and diagnosis and long waits in particular. A further priority remains the management of delayed discharges from the acute sector, within Argyll & Bute and from Greater Glasgow & Clyde. REVIEW OF EFFECTIVENESS The IJB has responsibility for conducting, at least annually, a review of the effectiveness of the governance arrangements including the system of internal financial control. This is informed by: - The work of officers within the IJB. - The work of Internal and External Audit. - External review and inspection reports. - The compliance with statutory guidance issued for the integration of services. - Recommendations from the Audit Committee. CONCLUSION AND OPINION ON ASSURANCE Appropriate governance arrangements are in place and operated effectively throughout 2025/26. Continuous improvement and development is ongoing to ensure that the Partnership is able to deliver on its strategic objectives and operate on a financially sustainable basis. The annual report and accounts outline the financial challenge and risk, common to the health and care sector nationally at present. The HSCP has been able to fund its activity and has managed the financial challenges facing it relatively well. It has also been able to improve its general reserve position to provide some degree of financial contingency and resilience for future years. Addressing the longer-term financial sustainability of the HSCP remains a priority. The Annual Governance Statement outlines a number of key evidence sources which support the view that reasonable assurance can be placed upon the adequacy and effectiveness of the IJB’s systems of governance. Graham Bell Evan Beswick Chair Chief Officer Date TBC Date TBC
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Remuneration Report Page 21 1. INTRODUCTION The Local Authority Accounts (Scotland) Amendment Regulations 2014 (SSI No.2014/200) require local authorities and IJBs to prepare a Remuneration Report within the annual accounts. The information disclosed in the Remuneration Report is subject to external audit and the text is reviewed by external audit to ensure its consistency with the Financial Statements. 2. INTEGRATION JOINT BOARD The IJB comprises eight voting members appointed in equal numbers by the Health Board and Council. The partners appoint a Chair and Vice Chair in accordance with the Integration Scheme and the Public Bodies (Joint Working) (Integration Joint Boards) (Scotland) Order 2014. Article 4 of the Order provides for the Chair to be appointed by NHS Highland or Argyll and Bute Council from among the voting members nominated by NHS Highland and the Council. The Vice Chair is appointed by the constituent authority who did not appoint the Chair. The NHS Board and the Council have responsibility for these appointments on an alternating basis and the NHS Board and the Council may change the person appointed by them as Chair or Vice Chair during an appointing period. NHS Highland Appointed Mr Graham Bell as Chair from 1 April 2025. Argyll and Bute Council appointed Cllr Dougie McFadzean as Vice Chair from 1 April 2025. In addition there are professional advisors and stakeholder members who are non-voting members of the Integration Joint Board. The IJB does not provide any additional remuneration to the Chair, Vice Chair or any other board members relating to their role. The IJB does not reimburse the relevant partner organisations for any voting board members costs. Travel and subsistence costs for all Board Members are re- imbursed in line with the policies of the Council and Health Board. The IJB does not have responsibilities, either in the current or future years, for funding any pension entitlements of voting IJB members. Therefore no pension rights or disclosures are provided for the Chair or Vice Chair. 3. OFFICERS OF THE IJB The IJB does not employ staff in its own right, however specific post-holding officers are non- voting members of the Board. Under Section 10 of the Public Bodies (Joint Working) (Scotland) Act 2014 a Chief Officer for the IJB has to be appointed and the employing partner has to formally second the officer to the IJB. The Chief Officer is regarded as an employee of the IJB although the contract of employment is with NHS Highland. No other staff are appointed by the IJB under a similar legal regime. Other non-voting board members who meet the criteria for disclosure are included below. The following table sets out the remuneration disclosures for 2025-26 for senior officers:
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Remuneration Report Page 22 Total 2024-25 £ Senior Officer Salary (Inc Fees and Allowances) £ Taxable Expenses £ Total 2025-26 £ 100,151 Chief Officer – Evan Beswick 102,368 102,368 94,854 Head of Finance – James Gow 98,446 967 99,413 195,005 Total 200,814 967 201,781 4. PENSION BENEFITS In respect of officers’ pension benefits the statutory responsibility for any future contributions rests with the employing partner organisation. Therefore there is no pension liability reflected on the IJB balance sheet for its officers. The IJB has a responsibility for funding the employer cash contributions each year. The Chief Officer is a member of the NHS Pension Scheme, costs for the pension scheme contributions and accrued pension entitlements are shown in the table below: 2024-25 2025-26 In-year Pension Contributions £ Accrued Pension Benefits £ In-year Pension Contributions £ Accrued Pension Benefits £ 21,821 Pension 22,000 Lump Sum 0 Chief Officer – Evan Beswick 23,033 Pension 26,000 Lump Sum 0 6,486 Pension 8,000 Lump Sum 0 Head of Finance James Gow 6,399 Pension 11,000 Lump Sum 0 5. DISCLOSURE BY PAY BANDS Pay band information is not separately provided as all staff pay information is disclosed above. 6. EXIT PACKAGES There were no exit packages agreed for senior officers during 2025/26 and none in the prior year. Graham Bell Evan Beswick Chair Chief Officer Date TBC Date TBC
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Financial Statements Page 23 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT The statement below shows the cost of providing services for the year according to accepted accounting practices. CIES 2025-26 2025-26 Gross Expenditure £000 Gross Income £000 Net Expenditure £000 Services Provided by NHS Highland 313,005 (10,140) 302,865 Services Provided by Argyll & Bute Council 112,725 (11,976) 100,749 Cost of Services 425,730 (22,116) 403,614 Taxation and Non-Specific Grant Income (note 3) (413,957) (Surplus) or Deficit on Provision of Services (10,343) Total Comprehensive (Income) and Expenditure (10,343) The movement in the General Fund balance is solely due to the transactions shown in the Comprehensive Income and Expenditure Statement. Consequently an Expenditure and Funding Analysis is not provided in these accounts. CIES 2024-25 2024-25 Gross Expenditure £000 Gross Income £000 Net Expenditure £000 Services Provided by NHS Highland 294,530 (10,001) 284,529 Services Provided by Argyll & Bute Council 108,261 (11,507) 96,754 Cost of Services 402,791 (21,508) 381,283 Taxation and Non-Specific Grant Income (note 3) (382,151) (Surplus) or Deficit on Provision of Services (868) Total Comprehensive (Income) and Expenditure (868)
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Financial Statements Page 24 MOVEMENT IN RESERVES STATEMENT This statement shows the movement on the IJB reserves. The movements which arise due to statutory adjustments which affect the General Fund balance are separately identified from the movements due to accounting practices. Movements in Reserves During 2025-26: General Fund Balance £000 Total Reserves £000 Opening Balance at 31 March 2025 (20,747) (20,747) (Surplus) / Deficit on Provision of Services (10,343) (10,343) (Increase) / Decrease in Year 2025-26 (10,343) (10,343) Closing Balance at 31 March 2026 (31,090) (31,090) Movements in Reserves During 2024-25: General Fund Balance £000 Total Reserves £000 Opening Balance at 31 March 2024 (19,879) (19,879) (Surplus) / Deficit on Provision of Services (868) (868) (Increase) / Decrease in Year 2024-25 (868) (868) Closing Balance at 31 March 2025 (20,747) (20,747)
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ARGYLL AND BUTE INTEGRATION JOINT BOARD Financial Statements Page 25 BALANCE SHEET The Balance Sheet shows the value of the IJB’s assets and liabilities as at the balance sheet date. The net assets of the IJB are matched by the reserves held by the IJB. 31 March 2025 Note 31 March 2026 £’000 £’000 20,747 Current Assets: Short Term Debtors 4 31,090 20,747 Net Assets 31,090 20,747 Usable Reserve: General Fund 6 31,090 20,747 Total Reserves 31,090 James Gow Head of Finance 16 May 2026
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Page 26 1. MATERIAL ACCOUNTING POLICIES 1.1 General Principles The Financial Statements summarise the transactions of the Integration Joint Board for the 2025/26 financial year and its position as at 31 March 2026. The Integration Joint Board was established under the requirements of the Public Bodies (Joint Working) (Scotland) Act 2014 and is a Section 106 body as defined in the Local Government (Scotland) Act 1973. The Financial Statements are therefore prepared in compliance with the Code of Practice on Local Authorities Accounting in the United Kingdom 2025-26, supported by International Financial Reporting Standards (IFRS), unless legislation or statutory guidance requires different treatment. The accounts are prepared on a going concern basis, which assumes the Integration Joint Board will continue in operational existence for the foreseeable future. The historical cost convention has been adopted. 1.2 Accruals of Income and Expenditure Activity is accounted for in the year that it takes place, not simply when cash payments are made or received. In particular: - Expenditure is recognised when goods or services are received and their benefits are used by the IJB. - Income is recognised when the IJB has a right to the income, for instance by meeting any terms and conditions required to earn income, and receipt of the income is probable. - Where income and expenditure have been recognised but settlement in cash has not taken place, a debtor or creditor is recorded in the Balance Sheet. - Where debts may not be received, the balance of debtors is written down. For the IJB annual accounts a debtor and/or creditor will be recorded where the partner contributions differ from the actual net expenditure in year, this allows any surplus or deficit on the provision of services to be transferred to the reserves held by the IJB. Where any in-year overspend exceeds reserves available the partners will make additional in-year payments, in this instance a creditor will not be recognised as future funding would be adjusted to reflect any future repayment. 1.3 Offsetting of Debtors and Creditors The IJB does not hold cash and cash equivalents. Instead the funding partners utilise, as directed by the Integration Joint Board, the amount of funding due to the Integration Joint Board to pay for services. The Integration Joint Board and the funding partners have confirmed that there is a ‘right of offset’, and that there is an intention to allow settlement of balances to be undertaken on a net basis. On this basis the Integration Joint Board’s financial statements present the balances due to and from the funding partners on a net basis rather than as separate creditors and debtors. 1.4 Funding
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Page 27 The Integration Joint Board is primarily funded by funding contributions from the statutory partners, Argyll and Bute Council and NHS Highland. Expenditure is incurred as the Integration Joint Board commissions specified health and social care services from the funding partners for the benefit of service recipients in Argyll and Bute. 1.5 Cash and Cash Equivalents The Integration Joint Board does not operate a bank account or hold cash. Transactions are settled on behalf of the Integration Joint Board by the funding partners. Consequently the Integration Joint Board does not present a ‘Cash and Cash Equivalent’ figure on the balance sheet. The funding balance due to or from each partner at 31 March is represented as a debtor or creditor on the Integration Joint Board’s Balance Sheet. 1.6 Employee Benefits The Integration Joint Board does not directly employ staff. Staff are formally employed by the funding partners who retain the liability for pension benefits payable in the future. The Integration Joint Board therefore does not present a Pensions Liability on its Balance Sheet. The Integration Joint Board has a legal responsibility to appoint a Chief Officer. Details on the arrangements are provided in the Remuneration Report. The charges from the employing partner are treated as employee costs. Where material the Chief Officer’s absence entitlement at 31 March is accrued, for example in relation to annual leave earned but not taken. 1.7 Provisions Provisions are liabilities of uncertain timing or amount. A provision is recognised as a liability on the balance sheet when there is an obligation as at 31 March due to a past event; settlement of the obligation is probable; and a reliable estimate of the amount can be made. Recognition of a provision will result in expenditure being charged to the Comprehensive Income and Expenditure Statement and will normally be a charge to the General Fund. Where NHS Highland or Argyll and Bute Council recognise provisions in relation to services included in the Integration Scheme these are disclosed in the IJB’s Annual Accounts. 1.8 Reserves The Integration Joint Board has a Reserves Policy in place which details the nature and use of reserves. The Integration Joint Board’s only Usable Reserve is the General Fund. The balance of the General Fund as at 31 March shows the extent of resources which the Integration Joint Board can use in future years. 1.9 Indemnity Insurance The Integration Joint Board has indemnity insurance for costs relating primarily to potential claim liabilities regarding Board member and officer responsibilities. NHS
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Page 28 Highland and Argyll and Bute Council have responsibility for claims in respect of the services that they are statutorily responsible for and that they provide. Unlike NHS Boards, the Integration Joint Board does not have any ‘shared risk’ exposure from participation in the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS). The Integration Joint Board’s participation in the CNORIS scheme is therefore analogous to normal insurance arrangements. Known claims are assessed as to the value and probability of settlement. Where it is material the overall expected value of known claims taking probability of settlement into consideration, is provided for in the Integration Joint Board’s Balance Sheet. The likelihood of receipt of an insurance settlement to cover any claims is separately assessed and, where material, presented as either a debtor or disclosed as a contingent asset. 1.10 VAT Status The IJB is a non-taxable person and does not charge or recover VAT on its functions. 2. EVENTS AFTER THE REPORTING PERIOD The Annual Accounts were authorised for issue on [date TBC]. Events taking place after this date are not reflected in the financial statements or notes. Events after the Balance Sheet date are those events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the Annual Accounts are authorised for issue. Two types of events can be identified: • Those that provide evidence of conditions that existed at the end of the reporting period, the Annual Accounts are adjusted to reflect such events. • Those that are indicative of conditions that arose after the reporting period – The Annual Accounts are not adjusted to reflect such events, but where a category of events would have a material impact disclosure is made in the notes of the nature of the events and their estimated financial effect. There are no events to report after the reporting period end. 3. TAXATION AND NON-SPECIFIC GRANT INCOME The following taxation and non-specific grant income was recognised in the Comprehensive Income and Expenditure Statement: 31 March 2025 31 March 2026 £’000 £’000
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Page 29 80,875 Funding Contribution from Argyll and Bute Council 85,494 301,276 Funding Contribution from NHS Highland 328,463 382,151 Taxation and Non-specific Grant Income 413,957 The funding contributions from the partners above excludes any funding which is ring- fenced for the provision of specific services. Such funding is presented as income in the Cost of Services in the Comprehensive Income and Expenditure Statement. 4. DEBTORS 31 March 2025 31 March 2026 £’000 £’000 18,500 NHS Highland 28,850 2,247 Argyll and Bute Council 2,240 20,747 Total Debtors 31,090 Amounts owed by the partners are stated on a net basis. Debtor and Creditor balances recognised by the funding partners but not yet settled in cash terms are offset against the funds they are holding on behalf of the IJB. 5. RELATED PARTY TRANSACTIONS The Integration Joint Board has related party relationships with NHS Highland and Argyll and Bute Council. In particular, the nature of the partnership means that the IJB may influence, and be influenced by, its partners. The following transactions and balances included in the Integration Joint Board’s accounts provide additional information on the relationships. Transactions with NHS Highland: 2024-25 £000 2025-26 £000 (301,276) Funding Contributions received from NHS Highland (328,463) 284,529 Expenditure on Services Provided by NHS Highland 302,865 (16,747) Net Transactions with NHS Highland (25,598) There are key management personnel employed by NHS Highland, these costs are included in the expenditure on services provided. The non-voting Board members employed by NHS Highland include the Lead Nurse, Clinical Director for Argyll and Bute, Public Health Specialist, Lead Allied Health Professional, Lead Pharmacist, Staff Representative and representatives from primary care and medical services. Details of remuneration, where required, is provided in the Remuneration Report. Transactions with Argyll and Bute Council 2024-25 £000 2025-26 £000
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Page 30 (80,875) Funding Contributions received from Argyll and Bute Council (85,494) 96,754 Expenditure on Services Provided by Argyll and Bute Council 100,749 15,879 Net Transactions with Argyll and Bute Council 15,255 There are key management personnel employed by Argyll and Bute Council, these costs are included in the expenditure on services provided. The non-voting Board members employed by Argyll and Bute Council include the Chief Financial Officer (Head of Finance), Chief Social Work Officer and a Staff Representative. Details of remuneration, where required, is provided in the Remuneration Report. Support services, such as human resources, financial services, information technology and accommodation are not included in the delegations from Argyll and Bute Council. These are provided free of charge as ‘services in kind’ and not included in the expenditure of the IJB. 6. USABLE RESERVE: GENERAL FUND The IJB holds a balance on the General Fund which will normally comprise of three elements: 1. Funds that are earmarked or set aside for specific purposes. In Scotland, under Local Government rules, earmarked reserves are accounted for separately but remain legally part of the General Fund. The identification of earmarked reserves may include: • future use of funds for a specific purpose, as agreed by the Integration Joint Board; or • reserves for unspent revenue grants or contributions which were allocated for a defined purpose. 2. Funds which are not earmarked for specific purposes, but are set aside to deal with unexpected events; and 3. Funds held in excess of the target level of reserves and identified earmarked sums. Such reserves can be spent or earmarked at the discretion of the Integration Joint Board. The following table details the movements on the General Fund: 2024-25 2025-26 Balance at 31 March 2025 Transfers Out Transfers In Balance at 31 March 2026 £000 £000 £000 £000 18 Technology Enabled Care 0 0 18
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Page 31 407 Alcohol & Drugs Partnership 242 201 366 105 Best start maternity services 0 8 113 178 Supporting improvements to GP premises 113 0 65 30 Scotgem funding 0 0 30 0 Long COVID Service 0 298 298 491 Primary Care Improvement Funding 125 602 968 37 Trauma Network 0 0 37 167 PFG School Nursing 0 0 167 90 District Nurse Posts 0 0 90 429 E-health Strategy Funding 245 145 329 14 Perinatal MH Funding 14 0 0 28 Mental Health Officer Training 0 0 28 37 Type 2 Diabetes Framework 37 0 0 79 Trauma Training Programme 0 18 97 145 Oban Accommodation Funding 0 0 145 250 Primary Care Education Fund 0 0 250 468 Additional Band 2-4 Staffing 39 0 429 229 Nursing Support for Care Homes Funding 17 0 212 165 Mental Health Facilities Funding 0 0 165 190 Waiting Times Funding and Improving Flow 190 1,145 1,145 55 Medical Assisted Treatment Standards 0 0 55 56 Psychological Therapies 56 0 0 159 Dementia Post Diagnostic Support 11 0 148 0 Community Glaucoma Service 0 39 39 19 Mental Health Recovery Services 19 0 0 495 Whole Family Wellbeing Fund 0 126 621 50 SARCS Programme 0 0 50 44 Multi Disciplinary Teams Funding 0 150 194 622 Children’s Mental Health Services (CAHMS) 244 0 378 11 Children’s Oral and Dental Health 0 0 11 21 Criminal Justice Fund 0 0 21 76 Health Checks – Learning Disability 0 0 76 39 Social Work Workforce 0 0 39 414 Hospital at Home Project 414 1,263 1,263 192 Public Dental Service 0 0 192 39 Digital Therapies 15 0 24 7,181 Agenda for change reserve 2,861 8,977 13,297 4,697 Sustainability & Value 0 100 4,797 2,576 General Reserves – Earmarked for Service Transformation & Budget Gap 743 2,914 4,747
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Page 32 444 General Reserves – Earmarked for Prevention Programme 258 0 186 20,747 General Fund 5,643 15,986 31,090 7. CRITICAL JUDGEMENTS AND ESTIMATION UNCERTAINTY In preparing the 2025/26 Annual Accounts, the IJB may have to make certain judgements about complex transactions or those involving uncertainty about future events. There are no critical judgements or material estimation uncertainties included within the Annual Accounts for 2025/26. 8. AUDIT FEES The fee payable in respect of the external audit of the accounts for the year ended 31 March 2026 was £36k (£34k in respect of the 2024/25 audit). Forvis Mazars did not receive any fees for non-audit work.