Unaudited Annual Accounts 2025/26
Argyll and Bute Council · 18 August 2026
Back to Argyll and Bute HSCP Finance and Policy Committee — 18 August 2026 and its agenda
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1 Finance & Policy Committee Date of Meeting: 18 August 2026 Title of Report: Unaudited Annual Accounts 2025/26 Presented by: James Gow, Head of Finance The Finance & Policy Committee is asked to: • Review the Unaudited Annual Accounts noting that these have been approved by the Audit & Risk Committee and published. • Note that the IJB is reporting a favourable financial outturn and an increase in its reserves. 1. EXECUTIVE SUMMARY 1.1 The Integration Joint Board is required to produce a set of annual accounts. The Audit & Risk Committee formally approved the Unaudited Accounts prior to issue to the External Auditors and being made available for public inspection by 31 June. 1.2 In respect of financial performance, the accounts are presenting a favourable outturn as the HSPC operated within budget and delivered well on its savings plan. As a result of the underspend, general reserves have increased and earmarked reserves have also increased as funding has been provided by Government via NHS Highland to fund future liabilities and costs. A more detailed analysis of spend against budget was provided to the IJB at its meeting on 27 May 2026. 2. Recommendations • Review the Unaudited Annual Accounts noting that these have been approved by the Audit & Risk Committee and published. • Note that the IJB is reporting a favourable financial outturn and an increase in its reserves. 3. DETAIL OF REPORT 3.1 The IJB is required to produce an audited set of annual accounts. The purpose of this report is to provide the Committee with an opportunity to review the un- audited accounts, any suggested changes can be taken into account during the audit process with changes made in advance of the audited accounts being approved and published November.
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2 3.2 The accounts provide a summary of financial performance along with the governance statement, a performance summary, remuneration details for senior staff and also provide information on risk. 3.3 It is likely that there will be some amendments to the unaudited accounts as the audit progresses. In respect of financial performance, an operational underspend of £2.9m or 0.7% against budget is reported. A summary of spend patterns over the past 5 years is provided below: 2021/22 2022/23 2023/24 2024/25 2025/26 £'000 £'000 £'000 £’000 £’000 Employee Costs 101,153 111,382 125,466 131,785 138,901 Premises 10,009 11,260 11,236 12,103 14,129 Supplies and Services 15,183 15,253 20,029 19,630 21,513 Transport 3,201 3,918 4,153 4,539 4,390 Third Party Payments 148,745 155,004 163,926 176,241 185,700 Income -19,104 -18,458 -21,019 -21,508 -22,118 Primary Care Services 52,930 53,137 55,287 58,098 60,766 Other 248 285 317 395 333 Total Spend 312,365 331,781 359,395 381,293 403,614 Total Funding 326,975 327,575 362,284 382,151 413,957 Increase / (Decrease) in reserves 14,610 -4,206* 2,889 868 10,343 *deficit due to recovery of covid reserves Spend increased by £22m or 5.8% against the prior year with direct staff costs accounting for 34% of net expenditure. The increases are largely due to inflationary pressure with premises costs increasing by more due to project spend such as the Campbeltown radiography and Coll key worker accommodation projects. Otherwise spend patterns appear relatively stable. 3.4 Whilst there was an underspend against the total resources allocated to the IJB of £10.3m, this is largely due to the allocation of funds to cover future payroll costs relating to agenda for change within the NHS. The underspend against the operational budget was £2.9m, as reported to the IJB and summarised on page 6 of the accounts. General reserves increased as a consequence of the underspend, from £2.6m to £4.7m but remain below the 2% target (circa £8m). Spend on projects and commitments from general reserves has been more than offset by the underspend. Spend on NHS services has also continued to grow faster than spend on Social Care (6.4% NHS increase / 4.1% Social Work / Social Care increase).
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3 3.5 The balance sheet debtor is equivalent to the reserves held by NHS Highland and Argyll and Bute Council. These have largely been earmarked for specific purposes and an analysis is included in Note 6. The high value reserves are to fund future pay related costs (agenda for change) and to support future sustainability and system flow within NHS services. 3.6 In the current context it is welcome that the HSCP has achieved its financial performance targets and holds general reserves at the year end. The accounts also provide an overview of the governance framework and a high level summary of performance and risk. The Greater Glasgow and Clyde SLA is highlighted as a strategic financial risk. In the medium term the HSCP has a deficit budget and is still not operating on a financially sustainable basis. This requires to be addressed and will be a particular area of external audit interest. In respect of the Going Concern judgement, the reserves held by the IJB and the plans currently in place to deliver savings mean it is appropriate to assume that the IJB remains a Going Concern. 4. RELEVANT DATA AND INDICATORS 4.1 Information contained within the accounts is derived from the financial systems of NHS Highland and Argyll and Bute Council. The audit of the IJB accounts is supported by the audits of both partners. 5. CONTRIBUTION TO STRATEGIC PRIORITIES 5.1 The annual accounts are a key statutory reporting and accountability requirement. They communicate both financial and key service delivery performance information in an accessible public document. 6. GOVERNANCE IMPLICATIONS 6.1 Financial Impact – The unaudited accounts present a favourable overview of the HSCPs financial performance during 2025/26 and the position at the year end.
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4 6.2 Staff Governance – None 6.3 Clinical Governance – None 7. Professional Advisory 7.1 Professional leads have had the opportunity to consider the contents of this report and the draft Annual Accounts. 8. EQUALITY & DIVERSITY IMPLICATIONS 8.1 None 9. GENERAL DATA PROTECTION PRINCIPLES COMPLIANCE 9.1 None 10. RISK ASSESSMENT 10.1 There are no changes to the risk register arising from the contents of this report. 11. PUBLIC & USER INVOLVEMENT & ENGAGEMENT 11.1 The unaudited annual accounts have been publicly available for inspection and their publication advertised. There has been some press and community interest in the underspend and responses to these have been issued explaining the nature of the underspend. 12. CONCLUSIONS 12.1 This report summarises the draft accounts for the year ended 31 March 2026 and provides an opportunity for members to comment on them prior to publication. 13. DIRECTIONS Directions required to Council, NHS Board or both. Directions to: tick No Directions required √ Argyll & Bute Council NHS Highland Health Board Argyll & Bute Council and NHS Highland Health Board
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5 14. PREVIOUS REVIEW OF THE REPORT Meeting Title of report Date Output (if relevant) SLT Unaudited Annual Report and Accounts 10/06/26 Endorsed Audit & Risk Committee Unaudited Annual Report and Accounts 16/06/26 Accounts approved and requirement for comms engagement required. REPORT AUTHOR AND CONTACT James Gow, Head of Finance james.gow@argyll-bute.gov.uk APPENDIX 1: Unaudited Annual Accounts for the year ended 31 March 2026