5. 2025-26 Budget Monitoring Report Mth3v4 - FINAL FOR IJB
North Ayrshire Council · 21 August 2025
Back to Integration Joint Board — 21 August 2025 and its agenda
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Integration Joint Board 21st August 2025 Subject: 2025-26 – Month 3 Financial Performance Purpose: To provide an overview of the IJB’s financial performance as at Month 3 (June). Recommendation: It is recommended that the IJB: (a) notes the overall integrated financial performance report for the financial year 2025-26 and the current overall projected year- end overspend of £5.187m reducing to £1.175m after planned recovery actions; (b) notes the progress with delivery of agreed savings; (c) approves the actions which are being taken to progress financial recovery and that an updated recovery plan will be presented to the next IJB; and (d) notes the remaining financial risks for 2025-26; Direction Required to Council, Health Board or Both Direction to: - 1. No Direction Required X 2. North Ayrshire Council 3. NHS Ayrshire & Arran 4. North Ayrshire Council and NHS Ayrshire & Arran Glossary of Terms NHS AA NHS Ayrshire and Arran HSCP Health and Social Care Partnership MH Mental Health MDT Child & Adolescent Mental Health Services BRAG Blue, Red, Amber, Green UNPACS UNPACS, (UNPlanned Activities) – Extra Contractual Referrals NRAC NHS Resource Allocation Committee PAC Performance and Audit Committee MHOF Mental Health Outcome Framework MDT Multi-Disciplinary Team
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1. EXECUTIVE SUMMARY 1.1 The report provides an overview of the financial position for the Partnership and outlines the projected year-end outturn position informed by the projected expenditure and income commitments; these have been prepared in conjunction with relevant budget holders and services. It should be noted that, although this report refers to the position at the end of June further work is undertaken following the month end to finalise projections, therefore the projected outturn position is as current and up to date as can practicably be reported. 1.2 The projected outturn is a year-end overspend of £5.187m (1.5%) reduced to £1.175m through already identified financial recovery actions. There is an increasing risk to achieving financial balance during 2025-26, the projected outturn position is summarised below with the residual risk following already identified financial improvement actions: TOTAL Health/ NHS AA Social Care/NAC Projected Overspend @ mth3 5.187 2.271 2.916 Financial Recovery Plan Projections (4.012) (1.752) (2.260) Residual Risk 1.175 0.519 0.656 The Integration Scheme describes the required approach where there is a projected overspend on the IJB integrated budget, which includes the requirement to agree a recovery plan to balance the overspending budget. Only if the recovery plan is unsuccessful will the Health Board and Council consider making available interim funds. The projection assumes all mitigations and controls established in 2024-25 continue throughout 2025-26 as it is recognised that the same uncertainty and risks remain into 2025-26 and there needs to be tight grip and control over expenditure overall. 1.3 From the core projections, overall, the main areas of pressure are: care at home, residential placements for children, physical disability care packages, supplementary staff in wards, staff costs in Montrose House and Unplanned Activities (UnPACs) within the lead partnership for mental health. 1.4 The projected IJB outturn position has been adjusted to reflect the impact of Lead Partnership services. The overspend in relation to North Lead Partnership services for Mental Health is not fully attributed to the North HSCP as a share has been allocated to East and South HSCPs, similarly the impact of the outturn on East and South led services has been shared with North, both on an NRAC basis in line with the agreed risk sharing mechanism. There is a requirement for the 3 IJBs to be aware of the position for Lead Partnership services and plans to deliver services from
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within allocated budget, on that basis further information will be brought forward with further detail on Lead Partnership services. 1.5 Since the setting of the budget in March 2025 the 2025/26 financial position has been adversely impacted by the below factors out-with the control of the IJB. • National Care Home Contract (NCHC) – the recent increase to the NCHC rate to reflect the impact of the nursing pay award resulted in an additional unfunded cost of £0.175m. • NHS Board allocation for the Employers National Insurance increase confirmed at 60% of funding – full year impact £0.664m • The current allocation for the Agenda for Change costs in relation to the reduced working week are currently being queried with the NHS finance team to ensure we receive our ‘fair share’ of the funding. The current funding allocated is £0.659m, the cost of covering all reduced hours is £1.497m, currently calculating actual cover costs and will request NHS AA review funding allocation. • Pay settlements for both NHS and Local Government staff have been agreed for 2025/26, the current assumption is that the shortfall between budget planning assumptions and actual settlements will be fully funded. 2. CURRENT POSITION 2.1 The report includes an overview of the financial position including commitments against the available resource, explanations for the main budget variances and an update on progress in terms of savings delivery. 2.2 FINANCIAL PERFORMANCE – AT MONTH 3 At month 3 against the full-year budget of £342.146m there is a projected year-end overspend of £5.187m (1.5%). The Integration Scheme outlines that there is an expectation that the IJB takes account of the totality of resources available to balance the budget in year. Following this approach, an integrated view of the financial position should be taken, however it is useful to note that this overall position consists of a projected overspend of £2.916m in social care services and a projected overspend of £2.271m in health services. Appendix A provides the financial overview of the Partnership position. The sections that follow outline the significant variances in service expenditure compared to the approved budgets. The projections for some areas will be subject to fluctuations as they depend on recruitment plans for new funding and also the capacity of providers to take on work. Appendix F provides information on the costs of bank and agency staff.
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2.3 Health and Community Care Services Against the full-year budget of £98.721m there is a projected overspend of £4.124m (4.2%) and the main variances are: a) Care home placements – net projected overspend of £0.060m. This includes a provision for an average of 7 interim beds and reflects the recent increase to the NCHC to reflect the impact of the nursing pay award resulted in an additional unfunded cost of £0.175m. The budgeted number of permanent placements was 765 and at month 3 there were 783 placements resulting in a projected overspend of £0.616m. The plan to manage down the number of permanent placements to reach the target is challenging due to the need to minimise delayed discharge from hospital and to continue to support those in critical and substantial need in the community. The overspend is partially offset by income recovered from charging orders which is projected to be £0.556m over recovered. This income is challenging to predict as it depends on the length of the legal process and time taken to sell the property that the charging order is registered to. b) Care at home is projected to be £1.641m overspent. The position reflects the cost of meeting the significant demand and level of provision for care at home support. c) Physical Disability Services – projected overspend of £0.923m split as follows: £1.268m over in residential placements, £0.178m under in direct payments and £0.167m under in community care packages. d) Integrated Island Services is projected to overspend by £0.266m. The most significant variance is a projected overspend at Montrose House of £0.189m which relates to the net overspend on agency staff (i.e. net of underspend on employee costs) and overspends across property, continence and medical supplies, admin and transport. Arran Patient Transfer contract is projected to overspend by £0.040m. e) Specialist Rehab wards – projected overspend of £0.214m (Redburn ward £0.253m overspend and Douglas Grant £0.039m underspend). The overspend is due to cover costs for vacancies as well as supplementary staffing for patients who require one to one support. f) Wards 1 and 2 – Projected overspend of £0.827m. The overspend is due to increased use of supplementary staffing. All rehabilitation wards are operating at 100% occupancy supporting a high level of patient needs/complexity, which places pressure on staffing levels and the use of bank and agency staff to support additional patient observations. The senior manager has developed an action
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plan which will reduce this overspend and the reduction is reflected in the recovery plan. g) District Nursing – projected to overspend by £0.100m mainly due to an overspend on continence supplies. 2.4 Mental Health Services Against the full-year budget of £114.884m there is a projected overspend of £0.940m (0.8%) prior to the re-allocation of the Lead Partnership variance to East and South HSCP. The main variances are: • Learning Disabilities are projected to underspend by £0.424m mainly due to community care packages (£0.886m under), direct payments (£0.335m over) and residential placements (£0.064m over). This improvement reflects the positive impact of assertive reviews of care packages and increased clawbacks from direct payments. • Community Mental Health services are projected to underspend by £0.095m across community care packages (£0.527m under), direct payments (£0.168m over), residential placements (£0.381 over) and Nethermains (£0.103m under). The main reason for underspend in community packages is the availability and capacity of adult community providers to deliver new packages of care. • There is a projected underspend of £0.353m in relation to the cost of Hospital Based Complex Continuing Care (HBCCC), this reflects the impact of change in provision for these services. There were plans to reinvest this in the service, but these plans are on hold as the funding is needed to contribute to the recovery plan. • The Lead Partnership for Mental Health is projected to be £1.806m overspent and the main variances are as follows: • Adult Inpatients – projected overspend by £0.372m due to overspends in supplementary staff for enhanced observations (1:1 and 2:1) and use of bank staff. There is an overspend of £0.159m at month 3 but this is partially offset by a recharge to another HSCP on a cost basis for an outwith authority placements which has incurred additional costs in relation to usage of supplementary staffing due to sustained enhanced observations. There is a favourable impact from the opening of the adult mental health assessment hub which has seen the adult inpatient areas with reduced occupancy. • The UNPACS (Unplanned Activities) budget – projected overspend of £1.369m based on current placements. This reflects two new placements agreed at the high-cost care package group in July 2025. UnPACS placements are for individuals with very specific needs that
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require a higher level of security and/or care from a staff group with a particular skill set/competence. There are no local NHS secure facilities for women, people with a learning disability or people with neurodevelopmental disorder. This can necessitate an UNPACs placement with a specialist provider which can be out-of-area. The nature of mental health UNPACs spend is that it is almost exclusively on medium- or long-term complex secure residential placements which are very expensive so a small change in placements can have a high budgetary impact. Due to the complexity and risk involved, transitions between units or levels of security can take many months. Applications to approve a placement are made to the Associate Medical Director for Mental Health who needs to be satisfied that the placement is appropriate and unavoidable prior to this being agreed. • Learning Disability Services – projected to overspend by £0.101m. This relates to the potential delays in achieving the saving from Trindlemoss moving from a nursing to social care model. The progress with this was impacted by the requirement to close Ward 7A. It is assumed that Ward 7A will be online as the use of bank staff will reduce. • Elderly Inpatients – projected overspend of £0.264m due to the use of supplementary staffing. The elderly mental health wards continue to operate at full occupancy and at times with waiting lists, with several patients who are on enhanced observations and bank costs remain high. • Eating Disorders – projected to overspend by £0.129m due to the staffing level being higher than the funding allocation. This is being considered alongside the overall resource allocation. • Enhanced Mental Health Outcome Framework – following the 2024/25 review there was £0.275m of unallocated funds. These were to be reinvested this in the service, but these plans are on hold as the funding is needed to contribute to the recovery plan. • Psychiatry – is projected to overspend by £0.269m mainly due to junior doctor costs. A mitigation plan is being developed and the rota for junior doctors is being reviewed. • MH Pharmacy – is projected to overspend by £0.396m due to increased demand and cost of medicines and in particular the cost of Buvidal. This overspend is after investing £0.510m on a Pan Ayrshire basis (£0.170m per HSCP).
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• Action 15 – is projected to overspend of £0.268m due legacy costs from the 2024/25 review of funding. There are £0.487m of reserves held for this and these will be requested as part of the recovery plan. Innovation Fund – projected underspend of £0.025m assuming that the posts to be redeployed as part of the EMHOF review are actioned. • The turnover target for vacancy savings for the Lead Partnership is held within the Lead Partnership as this is a Pan-Ayrshire target. There is a projected over recovery of the vacancy savings target of £0.701m in 2025-26. Further information is included in the table below: Vacancy Savings Target (£1.160m) Projected to March 2026 £1.861m Over/(Under) Achievement £0.701m 2.5 Children and Justice Services Against the full-year budget of £45.781m there is a projected overspend of £2.530m (5.5%) and the main variances are: a) Care Experienced Children and Young People is projected to overspend by £2.857m. Some of these costs are offset by the contribution from the Home Office for Unaccompanied Asylum-Seeking Children which is detailed below. The main areas within this are noted below: • The children’s residential placements are projected to overspend by £2.728m based 32 placements in month 3. This demonstrates an increase of 4 places since the start of the financial year. There are a number of factors leading to this challenging position: o We have 32 places available in our internal children’s houses, due to demand these have been operating at 100% occupancy or over for some time, leading to increased use of external placements where residential care is required. o There remains an acute shortage of foster carers leading to residential care being necessary in emergency placement situations. o The requirement to support Unaccompanied Asylum-Seeking Children (UASC) under the National Transfer Scheme and to support trafficked young people who have been identified in North Ayrshire. o A number of young people in residential care have requested Continuing Care, whereby a young person can remain in their placement until age 21. o Where appropriate young people are placed to meet their educational needs, the cost of Residential School Placements in the most cases is shared 50/50 with Education services.
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o Contractual inflation has still to be agreed for the majority of placements and it is likely that this will increase the projected costs of residential places which is outwith the control of the service. o Children’s Services are continuing to work with other services including Education and Housing to address the challenges through the work of the ‘Brighter Pathways’ Programme Board and associated workstreams. • Looked After and Accommodated Children (fostering, adoption, kinship etc) is projected to be £0.919m underspent. • Children with disabilities – there is a net projected overspend of £0.866m across residential placements (£1.312m over), direct payments (£0.312m under) and community packages (£0.134m under). • Residential respite – placements are overspent by £0.073m. These short- term placements are used to prevent an admission to full time care or to avoid placement breakdown. • Employee costs – are projected to overspend by £0.150m, largely due to staffing levels in the children’s houses and regrading of posts. • Care Leavers – projected underspend of £0.071m in rent costs. • Section 29 Payments (Throughcare Team) are projected to overspend by £0.064m. b) Head of Service – is projected to underspend by £0.548m. This consists of a projected overspend of £0.196m to the previous saving in relation to the staff reconfiguration in the children’s houses which was not achieved in 23-24 or 24- 25 and this is offset by the grant funding in relation to Unaccompanied Asylum- Seeking Children (UASC), which is projected to amount to £0.792m and which contributes to costs incurred across a number of C&F service areas. c) C&F Health Team – is projected to overspend by £0.121m mainly in relation to the Band 6 to 7 regrade for Health Visitors and the progression of posts up the Band 7 scale. Part of this recurring cost has been incorporated into budget pressures for 2025/26. 2.6 ALLIED HEALTH PROFESSIONALS (AHP) The non-employee costs element of the AHP services are projected to be on-line. All underspends in employee costs have contributed to payroll turnover.
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2.7 CHIEF SOCIAL WORK OFFICER This is projected to underspend by £0.205m. The carers contract is projected to underspend by £0.050m and there is an over-recovery of income in Learning and Development for social work student placements. 2.8 MANAGEMENT AND SUPPORT Management and Support Services are projected to underspend by £1.115m and the main areas of variance are: • There is projected slippage on the LD and MH transition funding of £0.246m due to delays in children transitioning into adult services. This involves complex planning by services with service users and families and can change over time based on assessed need when moving into adult services. • The 2024-25 budget included a budgeted deficit on the social care side of £0.437m which is offset by a budgeted surplus of £0.437m on the health side of the budget. • There is also a balance of overachieved savings of £0.061m as a result of the 25/26 budget decision • NHS shortfall in savings of £0.406m which is not coded to specific areas and held centrally until recurring savings can be identified. • An over-recovery of payroll turnover of £1.200m for social care services and an over-recovery of £0.403m for health services as outlined in the table below. The turnover targets and achievement for the financial year for Health and Social Care services outwith the Lead Partnership is noted below: Social Care Health Vacancy Savings Target (£3.400m) (£1.567m) Projected to be achieved by March 2026 £4.600m £1.970m Over/(Under) Achievement £1.200m £0.403m The areas contributing to the health and social care vacancy savings are spread across a wide range of services with vacancy savings being achieved in most areas. As part of the recovery plan, the vacancy scrutiny group has been enhanced with the Heads of Service and professional leads attending. Each post is scrutinised and filled only where deemed necessary with a recruitment freeze now implemented for all non-essential posts. For 2025/26 there will be a further recruitment delay with vacancy scrutiny approved vacancies being held for four weeks before they are advertised to create more payroll turnover. This will be for all vacancies except clinical or registered services vacancies or those which will incur cover costs.
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The turnover target for the North Lead Partnership for Mental Health services is detailed separately within the Lead Partnership information at section 2.4. 2.9 Savings Progress a) The approved 2025-26 budget included £4.019m of savings. BRAG Status Position at Budget Approval £m Position at Month 3 £m Red - - Amber 2.984 2.148 Green 1.035 0.998 Blue - 0.873 TOTAL 4.019 4.019 b) The main area to note is that the shortfall in the day care saving – the recommendations following the Older People’s Day Service Review were presented to the IJB in June 2025. The IJB supported a proposed model of day services which does not deliver the full savings target with a shortfall of £95k. The savings target will be re-adjusted for future monitoring. c) The Chief Officer presented a proposal to the Joint Staffing and Recruitment Panel in June 2025 to revise the leadership structure for the IJB finance team which includes the removal of the Head of Service position. These supported changes will deliver a saving of £101k which will be added to the plan and compensate for the reduction in recurring savings from the day care review. Appendix B provides an overview of those service changes which do have financial savings attached to them and the BRAG status around the deliverability of each saving. 2.10 Budget Changes The Integration Scheme states that “either party may increase it’s in year payment to the Integration Joint Board. Neither party may reduce the payment in-year to the Integration Joint Board nor Services managed on a Lead Partnership basis…. without the express consent of the Integration Joint Board.” Appendix C highlights the movement in the budget position following the initial approved budget. Reductions Requiring Approval: Ref Description Amount (£000) 1 ICT Budget Transfers (0.005) 2 Development of People working in Childrens SW – Children’s Social Care Uplift for Commissioned Services (0.390)
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3 Prescribing CRES (saving) (0.715) 4 Training Grade Adjustment – April and May (0.071) 5 NAHSCP contribution to pan Ayrshire Vision Support Service (South Lead) (0.005) 6 NAHSCP contribution to Pan Ayrshire Community Store (South Lead) (0.155) 2.11 Pan Ayrshire Lead Partnership services and Large Hospital Set Aside Lead Partnerships: - The IJB position is adjusted to reflect the impact of Lead Partnership services. The outturn for all Lead Partnership services is shared across the 3 Partnerships on an NRAC basis. The outturn in relation to North Lead Partnership services is not fully attributed to the North IJB as a share is allocated to East and South Partnerships; similarly, the impact of the outturn on East and South led services is shared with North. At Month 3 the MH lead partnership is projected to overspend by £1.806m (£0.591m NRAC share for East and £0.517m for South). South HSCP (month 3 info) – projected overspend of £0.134m of which £0.050m will be allocated to North. The variance is mainly due to an overspend of £0.080m in the community store. This includes the costs of replacing mattresses, repairs and maintenance contract and equipment costs. There is also a projected overspend of £0.058m in the Family Nurse Partnership as the SG funding was based on the mid- point of the salary scale and all post are now at the top point of the scale. This will be a pressure in 2026/27. East HSCP (month 2 info) - projected overspend of £0.106m (of which £0.040m will be allocated to North). The main variances are: • Primary Care (including Dental) projected overspend of £0.673m. This is due to increased spend on Primary Care Contracting and Support £0.408m, mainly due to ongoing additional costs in Diabetic Retinopathy, additional Consultant costs and additional costs at Community Hospitals. In addition, there are projected increased costs in Primary Medical Services £0.581m due to additional staffing costs, as well as in Ayrshire Urgent Care Services £0.047m. These additional costs are partially offset by staffing savings in Dental services £0.363m. • There are projected additional costs in Prison and Police Healthcare £0.093m, mainly due to prescribing. • The projected overspend in Other Lead Services £0.116m, relates to additional staffing costs in Area Wide Evening Services. Work is being undertaken to continue to reduce costs in the current year. • The additional pressures in Lead Partnership services highlighted above are partially offset by staffing savings in pan-Ayrshire Allied Health Professions
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Services £0.774m. This is based on current vacancies however this will potentially reduce over the course of the year as posts are recruited to. Overall, East Ayrshire hosted services are projected to overspend by £0.106m at this early stage of the financial year. Work will be undertaken to reduce costs in areas overspending within hosted services over the course of 2025/26. Set Aside: - Work has been undertaken with partnerships to progress and develop set aside arrangements to fully implement the legislative requirement. This includes arrangements in relation to the use of Directions, Joint Commissioning Plans and overall progression towards fair share allocations of resources. Further work has been undertaken through the Ayrshire Finance Leads group to establish baseline resources for each partnership and how these compare to the NRAC “fair share” of resources. Ayrshire Finance Leads have now agreed a baseline methodology for set aside budgets which involves using the four full years prior to the pandemic, 2016/17 – 2019/20 inclusive. The HSCPs require to agree their final share of the baseline with each other, however the aggregate will remain unchanged. The table below shows the cost of the historic baseline at 2024/25 prices. The 2025/26 actual usage information is not known until later in the year. IJB Baseline at 2024/25 prices (£) East 31.870 North 39.966 South 34.488 Total 106.324 The annual budget for Acute Services is £485.7 million. The directorate is overspent by £7.4 million after 3 months. This was caused by overspends on medical and nursing staff, together non pay overspends on equipment and supplies. These are required due to the level of operational pressure experienced. Unfunded beds contributed an overspend of £1.7 million after 3 months. Within the overall £7.4 million overspend Medicine are over by £3.0 million, Emergency Care by £2.7 million, Surgery by £0.7 million, Labs and Diagnostics by £1.2 million and Women and Children by £0.6 million. Underspends on other budgets of £0.8 million make up the difference.
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There is a material underlying deficit caused by: • Length of Stay (LoS) and emergency admission rates in NHS Ayrshire and Arran acute hospitals are above the Scottish average. • High expenditure on medical and nursing agency staff, high rates of absence and vacancies causing service pressure. • Delayed transfers of care and high acuity of patients. The IJBs and the Health Board work closely in partnership to maintain service and improve performance. In respect of Lead Partnership Services, the 3 Chief Officers and CFOs have met to consider improvements in the reporting and visibility of financial and operational performance for those services which we lead or are led by another HSCP. Actions have been agreed to develop more regular shared information to be shared across all 3 IJBs with an intention to incorporate this further detail into future financial monitoring reports during 2025/26. 2.12 FINANCIAL RISKS There are a number of financial risk areas that impact or may impact on the financial position. • Current overspend areas, especially in low volume / high-cost services e.g. Children’s residential placements, UNPACs, and supplementary staffing across community, mental health and learning disability wards. • Growing demand for services. • Staff recruitment and retention challenges across a number of service areas. • The expectation that performance will continue to be maintained or improved despite the significant resource challenges. • Ongoing delivery costs of Scottish Government policy directives, particularly where these are not fully funded or inflation proofed. • Both NHS and Local Government pay awards are settled, these are both higher than the budget assumptions for 2025-26, if the pay awards are not fully funded then this will present an in-year cost pressure. • Unearmarked reserves are depleted, there is no scope to absorb in-year variances, with any overspends requiring additional funding from partners. • The ongoing review of the Integration Schemes, where there is a focus on financial arrangements and risk share. • The wider system financial challenges and impact across the whole system, for example the financial position of NHS AA and the decisions taken to reduce the Board’s deficit may have impacts on other parts of the health and care system.
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• Removal of brokerage for NHS Boards, NHS AA have been asked by Scottish Government to deliver further financial improvement beyond their Board approved financial plan. • The overall sustainability of commissioned care providers, with eNICs compounding historic challenges re financial sustainability, there is a heightened risk of provider failure leading to handing back of care and contracts. • The ongoing ability to source packages of care for service users. • Progress with the work to develop set aside arrangements and the risk sharing arrangements agreed as part of this. • The recurring underlying levels of overspend which may impact on the Partnership’s ability to continue to sustain service levels in the future. • The use of supplementary staffing for enhanced observations across a number of service areas and the use of high-cost agency staff to support frontline service delivery in areas where there are recruitment challenges. • Agenda for Change Pay Reform programme – including Nursing Band 5-6 re- grade, protected learning time and reduction to the working week. • Scot Excel inflationary increases for children’s service are significantly higher than assumed. • There is a risk in relation to recovering recharge income in relation to the LD Assessment and Treatment patients from outwith Ayrshire. These risks will continue to be monitored during 2025-26. 2.13 RESERVES The IJB opening reserves position, subject to completion of the 24/25 audit, is summarised in the table below. General Fund Reserve Earmarked Reserves Total Unearmarked External Funding HSCP £m £m £m £m Balance – 1 April 2025 - 2.381 0.780 3.161 Anticipated Drawdown - (2.381) (0.780) (3.161) Balance – 31 March 2026 - - - - The £0.780m HSCP earmarked reserve relates to the Service Redesign and Change Fund which is fully committed in 2025/26. Further detail on the reserves is given in Appendix D.
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2.14 Financial Recovery Plan The IJB set a balanced budget for 2025/26 on 20th March 2025. This did not include any draw on reserves but did include the approval of £4.019m of savings to achieve financial balance. Services will continue to work towards implementing the recovery plan to deliver cost reduction targets while carefully managing the level of risk. This will include the preparation of equality impact assessments. The management actions and governance framework outlined below which were agreed in 2024/25 will continue throughout 2025/26: PREVIOUSLY AGREED MANAGEMENT ACTIONS/CONTROLS: • Review of expenditure authorisation levels across the Partnership and escalation of specific decisions to senior officers. In particular, a new governance group has been introduced, involving the Director and Heads of Service, to oversee the agreement of higher value packages of care (above £40,000 per annum). • Staff communication in relation to discretionary/non-essential spend. • Review of temporary posts and robust vacancy management/approval. The vacancy scrutiny group now has representation from all of the Heads of Service and a recruitment freeze will be implemented for all but essential frontline posts. • Restrictions on all but essential overtime working. • Ongoing review of future year savings or transformation programmes to identify scope for acceleration. • Maximise opportunities from the recently reopened Independent Living Fund (ILF) Scotland. PREVIOUSLY AGREED GOVERNANCE MEASURES: • Establishment a ‘Finance Working Group’, chaired by the IJB Chair or Vice Chair. The Director and Heads of Service are members of the group. It meets monthly to facilitate increased oversight and scrutiny of the financial position and transformation programme as well as detailed budget planning for future financial years. • Strengthened support from Finance Team to front line services and increased engagement with Heads of Service and Senior Management Teams, including line by line reviews of all budget areas. PROPOSED ADDITIONAL MANAGEMENT ACTIONS/CONTROLS: In addition to these measures further control measures have been agreed for 2025/26 to enhance the scrutiny of the overspend and support the recovery plan.
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These are: • Recruitment delay – there will be a recruitment drag with vacancy scrutiny approved vacancies being held for four weeks before they are advertised to create more payroll turnover. This will be for all vacancies except clinical or registered services vacancies or those which will incur cover costs. • High-cost care package group – the remit of this group will be expanded to include care packages for children with a disability and all UNPACs placement requests. • Oversight group for looked after and accommodated children in residential care – this group meets fortnightly to actively review all placements PROPOSED RECOVERY ACTIONS AT MONTH 3: • The proposed recovery action is outlined in Appendix E. This includes a mix of cost reduction targets across various services and a drawdown of all of the reserves held for Action 15 and the Enhanced Mental Health Outcome Framework. The reduces the projected overspend per below: TOTAL Health/ NHS AA Social Care/NAC Projected Overspend @ mth3 5.187 2.271 2.916 Financial Recovery Plan Projections (4.012) (1.752) (2.260) Residual Risk 1.175 0.519 0.656 • This plan will be reviewed each month and further recovery actions will be presented to the IJB for approval. PROPOSALS 3.1 Anticipated Outcomes Continuing to closely monitor the financial position will allow the IJB to take corrective action where required to deliver services in 2025-26 from within the available resource, thereby limiting the financial risk to the funding partners. The transformational change programme will have the greatest impact on the financial sustainability of the partnership, the IJB require to have a clear understanding of progress with the delivery of the transformation plan. 3.3 Measuring Impact Ongoing updates to the financial position will be reported to the IJB throughout 2025- 26. 4. IMPLICATIONS 4.1 Financial
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The outturn is an overall year-end overspend of £5.187m (1.5%) prior to recovery action. The report outlines the main variances for individual services. The IJB unearmarked reserve balance is zero. This current position poses a financial risk to North Ayrshire Council and NHS Ayrshire and Arran. 4.2 Human Resources The report highlights vacancy or turnover savings achieved during the year. Services will review any staffing establishment plans and recruitment in line with normal practice when implementing service change and reviews as per agreement with the IJB. Tight vacancy scrutiny management arrangements are in place for the HSCP. 4.3 Legal None. 4.4 Equality/Socio-Economic None. 4.5 Risk Para 2.12 highlights the financial risks. The report falls in line with the agreed risk appetite statement which is a low-risk appetite in respect to adherence to standing financial instructions, financial controls and financial statutory duties and a high-risk appetite in relation to finance and value for money. The ‘financial viability of the HSCP’ risk on our strategic risk register. 4.6 Community Wealth Building None. 4.7 Key Priorities The ability to deliver on our strategic priorities may be compromised due to the greater financial risk faced in 2025-26 and the increased focus required on financial rather than service improvement. This will be kept under close scrutiny throughout 2025-26. If we are unable to successfully develop a financial recovery plan to achieve financial balance, consideration may be given to revising the strategic commissioning plan. 5. CONSULTATION 5.1 This report has been produced in consultation with relevant budget holders and the Partnership Senior Management Team. 5.2 The IJB financial monitoring report is shared with the NHS Ayrshire and Arran Director of Finance and North Ayrshire Council’s Head of Finance after the report has been finalised for the IJB.
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Caroline Cameron, Director Author – Eleanor Currie, Chief Finance Officer [eleanorcurrie@north-ayrshire.gov.uk]
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PUBLIC INFORMATION 2025-26 Budget Monitoring Report–Objective Summary as at 30th June 2025 Appendix A Budget Outturn Projected Over/ (Under) Spend Variance Budget Outturn Projected Over/ (Under) Spend Variance Budget Outturn Projected Over/ (Under) Spend Variance £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 COMMUNITY CARE AND HEALTH 77,621 80,360 2,739 21,100 22,485 1,385 98,721 102,845 4,124 : Locality Services 32,841 33,879 1,038 5,942 6,041 99 38,783 39,920 1,137 : Community Care Service Delivery 40,560 42,184 1,624 0 40,560 42,184 1,624 : Rehabilitation and Reablement 2,118 2,097 (21) 0 2,118 2,097 (21) : Long Term Conditions 886 928 42 10,625 11,706 1,081 11,511 12,634 1,123 : Community Link Workers 392 387 (5) 0 0 0 392 387 (5) : Integrated Island Services 824 885 61 4,533 4,738 205 5,357 5,623 266 MENTAL HEALTH SERVICES 35,933 35,419 (514) 78,951 80,405 1,454 114,884 115,824 940 : Learning Disabilities 26,924 26,500 (424) 750 750 0 27,674 27,250 (424) : Community Mental Health 7,013 6,917 (96) 1,714 1,715 1 8,727 8,632 (95) : Addictions 1,996 2,002 6 1,941 1,941 0 3,937 3,943 6 : HBCCC 0 0 0 353 0 (353) 353 0 (353) : Lead Partnership Mental Health NHS Area Wide 0 0 0 74,193 75,999 1,806 74,193 75,999 1,806 CHILDREN & JUSTICE SERVICES 40,026 42,422 2,396 5,755 5,889 134 45,781 48,311 2,530 : Irvine, Kilwinning and Three Towns 3,138 3,188 50 0 0 0 3,138 3,188 50 : Garnock Valley, North Coast and Arran 3,558 3,612 54 0 0 0 3,558 3,612 54 :Intervention Services 1,799 1,808 9 0 0 0 1,799 1,808 9 : Care Experienced Children & Young people 27,094 29,951 2,857 0 0 0 27,094 29,951 2,857 : Head of Service - Children & Families 1,299 751 (548) 0 0 0 1,299 751 (548) : Justice Services 2,709 2,709 0 0 0 0 2,709 2,709 0 : C&F Health Team 429 403 (26) 4,995 5,116 121 5,424 5,519 95 : Lead Partnership NHS Children's Services 0 0 0 760 773 13 760 773 13 CHIEF SOCIAL WORK OFFICER 1,928 1,723 (205) 0 0 0 1,928 1,723 (205) PRIMARY CARE 0 0 0 55,147 55,078 (69) 55,147 55,078 (69) ALLIED HEALTH PROFESSIONALS 0 11,330 11,330 0 11,330 11,330 0 MANAGEMENT AND SUPPORT COSTS 11,059 9,559 (1,500) 3,296 3,681 385 14,355 13,240 (1,115) OUTTURN ON A MANAGED BASIS 166,567 169,483 2,916 175,579 178,868 3,289 342,146 348,351 6,205 Return Hosted Over/Underspends to East 0 0 0 0 (591) (591) 0 (591) (591) Return Hosted Over/Underspends to South 0 0 0 0 (517) (517) 0 (517) (517) Receive Hosted Over/Underspends South 0 0 0 0 50 50 0 50 50 Receive Hosted Over/Underspends East 0 0 0 0 40 40 0 40 40 OUTTURN ON AN IJB BASIS 166,567 169,483 2,916 175,579 177,850 2,271 342,146 347,333 5,187 TOTAL Partnership Budget - Objective Summary Council Health 2025/26 Budget
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PUBLIC INFORMATION 2025-26 Savings Tracker Appendix B Social Care: Ref Description Deliverability Status at budget setting Deliverability June 2025 2025/26 Saving Previously Agreed Savings (Full year impact) 1 Review of Day Care provision Green Green 0.100 2 Service redesign (CAAST Team and Corporate Parenting team) Green Green 0.034 Adjustments 3 Payroll Turnover Green Green 0.099 Mental Health 4 LD Responder Service Amber Amber 0.150 Children, Families & Criminal Justice 5 Brighter Pathways Amber Amber 1.000 Community Care & Health 6 Review of Day Care provision Amber Amber 0.107 7 Care at Home Amber Green 0.500 Cross Service 8 Care Package Review (all services) Amber Amber 0.200 9 Deletion of vacant posts Green Blue 0.056 10 Increase to charging Green Green 0.186 11 Admin Post Savings Green Blue 0.114 12 Financial Inclusion Green Blue 0.357 TOTAL SOCIAL CARE SAVINGS 2.903
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PUBLIC INFORMATION Health: Ref Description Deliverability Status at budget setting Deliverability June 2025 2025/26 Saving Adjustments 13 Increase recharge to East Ayrshire for beds at Woodland View Green Blue 0.010 14 Payroll Turnover Green Green 0.079 Other Savings 15 Admin Savings Amber Blue 0.186 16 Trindlemoss House - move to social care model Amber Amber 0.250 17 EICT/Rehab Amber Blue 0.150 18 Community MH/Wellbeing Review Amber Amber 0.100 19 Ward 7A - Woodland View Amber Amber 0.341 TOTAL HEALTH SAVINGS 1.116 TOTAL NORTH HSCP SAVINGS 4.019
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PUBLIC INFORMATION 2025-26 Budget Reconciliation Appendix C COUNCIL Period Permanent or Temporary £'m Initial Approved Budget 137.739 Adjustments to baseline 0.014 Revised Budget 137.753 Resource Transfer 25/26 1-3 25.462 Additional Funding - 24/25 Adult Social Care RLW 1-3 P 0.073 Additional Funding RLW 1-3 P 0.126 Additional Funding - Money Smart 1-3 P 0.094 ICT Transfers 1-3 P (0.005) Additional Funding - Whole Family Wellbeing Funds 1-3 T 0.179 CJSW - S27 1-3 P 3.280 Development of People working in Childrens SW 1-3 P (0.390) Roundings 3 (0.005) 166.567 HEALTH Period Permanent or Temporary £'m Initial Budget exc set aside 161.934 Month 10-12 Adjustments and adjusting for the full year impact of part years amounts and temporary funding. 8.532 Revised Budget 170.466 Resource Transfer 24/25 24.640 Resource Transfer 25/26 (25.462) NORTH NATIONAL INS 25-26 AMBUS 1 0.997 PRESCRIBING 25-26 AMBUSH 1 2.754 PRESCRIBING CRES 25-26 AMBUSH 1 (0.715) Training Grade Adj - April 1 (0.058) Training Grade Rates Adj - April 1 0.030 MH: Anticipate PDS Dementia (North) 25/26 1 0.094 MH: Anticipate Delivery of Veteran Specific 25/26 1 0.105 Anticipated RWW from SG 1 0.659 Anticipate 20% Tranche 2 ADP 1 0.174 Training Grade Adj - May 2 (0.013) Bwp 25-26 East Chest Heart Stroke 2 0.001 Bwp 25-26 East Nest Expansion 2 0.023 Bwp 25-26 East - Sds Advice Service 2 0.013 Bwp 25-26 East Sub Prescribing 2 0.170 25-26 South Budget Paper - North Substitute Prescribing 2 0.170 25-26 South Budget Paper - Pan Ayrshire Chest Heart And Stroke 2 0.001 25-26 North Budget Paper - Pan Ayrshire (vision Support Service 2 (0.005) 25-26 North Budget Paper - Pan Ayrshire (communitystore) 2 (0.155) HD52: EARLY INTERVENTION PSYCHOSIS 3 0.100 25-26 Pay Award Increase North 3 1.179 ANTICIPATED BUDGETS INCL HERE (NOT IN LEDGER) 3 0.412 Roundings (0.001) 175.579 TOTAL COMBINED BUDGET 342.146 Social Care Budget Reported at Month 3 Health Budget Reported at Month 3
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PUBLIC INFORMATION 25-26 IJB Reserves Position Appendix D Area of Reserves Balance at 31 March 2025 Earmarked Funds £ : Alcohol & Drug Partnership 353 : Mental Health Action 15 135 : Primary Care Improvement Fund 46 : Service Redesign / Challenge Fund 780 : Family Wellbeing Fund 934 : Breastfeeding Network 36 : MH Recovery and Renewal /Enhanced MH Outcome Framework 365 : Early Intervention in Psychosis 92 : LD funding 82 : Donation (Police Scotland) 1 : Primary Care Improvement Fund IP 303 : GP Premises Improvements - tranches 1 and 2 3 : Dental Practice Improvement 29 : Appropriate Adult 2 Total Earmarked 3,161
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PUBLIC INFORMATION Financial Recovery Action Plan Appendix E a) Care home placements (60) This will bring the overall budget for placements and charging order income online. b) Physical Disability Services (res, community and DPs) (575) Some PD residential packages £575K will move to the older people Care Home placements budget. When they transfer, the older people placements will need to manage this transfer within the existing budget. c) Specialist Rehab wards (75) Based on planned action developed by the senior manager. d) Wards 1 and 2 (275) Based on planned action developed by the senior manager. e) Care at Home (300) Reflects the potential reduction to costs as an impact of the SG investment in unscheduled care TOTAL (1,285) a) Learning Disabilities 0 b) Community Mental Health services 0 c) Lead Partnership for Mental Health : - Adult Inpatients (150) Inpatient Review being undertaken - Elderly Inpatients (50) Inpatient Review being undertaken - Psychiatry (150) Junior doctor rota still to be revised. - Action 15 Reserves (486) Draw down of the full pan Ayrshire reserve - agreed with the CFOs at East and South - Enhanced MH Outcome Framework Reserves (624) Draw down of the full pan Ayrshire reserve - agreed with the CFOs at East and South NORTH AYRSHIRE ELEMENT 38.65% (564) TOTAL (564) Health and Community Care Services Mental Health Services No cost reduction proposed but the service need to maintain the current position. All new placements need to be offset by discharges or reductions from care package reviews.
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PUBLIC INFORMATION SERVICE AREA Cost reduction target Comment Children and Justice Services a) Residential Placements (1,000) Based on some placements moving to tenancies and other placements moving from external to in-house provision. TOTAL (1,000) ALLIED HEALTH PROFESSIONALS 0.000 No cost reduction proposed but the service need to maintain the current position. CHIEF SOCIAL WORK OFFICER 0.000 No cost reduction proposed but the service need to maintain the current position. MANAGEMENT AND SUPPORT a) Payroll turnover (200) Increase to the current projection based on dragging vacancies for 4 weeks after vacancy scrutiny approval. b) Transition slippage (100) Based on historic slippage. c) Contractual inflation (25) TOTAL (325) OTHER AREAS b) Agenda for Change - assume fully funded (838) Based on 100% cost of the half hour reduction in working week being funded. (838) TOTAL RECOVERY ACTION (4,012) Remaining projected overspend 1,175
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PUBLIC INFORMATION Bank and Agency Costs to Month 3 Appendix F 1) NHS 4863 (Registered) 4864 (Unregistered) TOTAL AAC074 NORTH CORE SLT ADULT 2,243 2,243 AAC403 WARD 1 WOODLANDS VIEW 9,685 75,132 84,817 AAC406 WARD 2 WOODLANDS VIEW 9,022 126,262 135,284 AAC410 ACH REDBURN REHAB WARD NRS 10,059 46,963 57,022 AAC412 ACH DOUGLAS GRANT REHAB WD NRS 5,673 10,014 15,687 AAD401 WARD 3 WOODLANDS VIEW NURSING 3,234 137,568 140,802 AAD402 WARD 4 WOODLANDS VIEW NURSING 682 10,902 11,584 AAH047 NEW CLONBEITH NURSING(JURA) 36,558 26,708 63,266 AAH415 WVIEW THE GLEN ECT 1,311 627 1,938 AAH417 WVIEW WARD 10 ACUTE MH NRS 1,342 40,645 41,987 AAH423 WVIEW WARD 8 ACUTE MH NRS 4,896 256,513 261,409 AAH460 WARD 5 WOODLANDS VIEW 358 3,075 3,433 AAH466 WVIEW WARD 7B REHAB MH NRS 2,302 2,302 AAH492 NEW DUNURE NURSING(CLONBEITH) 11,907 42,643 54,550 AAH494 MH BED MANAGEMENT 4,792 4,792 AAT001 TRINDLEMOSS 19,288 54,297 73,585 AAW047 ARRAN HOSPITAL NURSING 18,134 12,265 30,399 ACA412 CAMHS UNSCHEDULED CARE 377 377 ACF001 EARLY YRS-C/F TEAM 1 300 300 ACN012 PACKAGE OF CARE (P) - AMG 35,869 35,869 ACN047 ARRAN DN 11,599 11,599 ACP002 NC POC TEAM 2 287 287 ACP003 NC POC TEAM 3 2,389 2,389 ADN033 IRVINE DN 101- 101- ADN042 NORTH WEST COAST DN 10,003 10,003 ADN075 GARNOCK VALLEY DN 9,705 9,705 ADN080 NORTH DN TEAM LEADERS 22,209 22,209 ALA047 LADY MARGARET NURSING 4,839 2,529 7,368 AML146 LD HEALTH CHECKS 12,238 12,238 AML392 NORTH CLDT 5,777 164 5,941 AML402 LDS MANAGEMENT 2,286 2,286 AML442 North Partnership Management 8,268 8,268 AMN412 CMHT NURSING-NORTH AYRSHIRE 1,229 1,229 AMN415 WVIEW WARD 7C FORENSIC REHAB N 358 25,982 26,340 AMN419 DAY ACTIVITIES TEAM 10,208 10,208 AMN425 INTENSIVE COMMUNITY NURSING TEAM 11,180 11,180 AMN431 ADULT MENTAL HEALTH LIASION TEAM 1,798 1,798 AMN446 WVIEW WARD 6 LOW SECURE NRS 12,933 37,194 50,127 AMN454 WARRIX AVE 18,214 19,161 37,375 ANU632 ICFN - COMMUNITY PHLEBOTOMY 3,303 3,303 AWV438 WVIEW WARD 7A LD A+T NRS 20,658 320,728 341,386 AXC407 WVIEW WARD 9 ACUTE MH NRS 6,480 93,989 100,469 AXC418 WVIEW WARD 11 ACUTE MH NRS 6,589 43,722 50,311 315,161 1,432,403 1,747,564 2) AGENCY COSTS Cost Centre Description Actual Expenditure Montrose House Brodick 128,839 Ld Acm 13,864 Mh Acm 13,606 156,309.00 Bank