Financial Monitoring Report P9
North Ayrshire Council · 12 February 2026
Back to Integration Joint Board — 12 February 2026 and its agenda
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Integration Joint Board 12th February 2026 Subject: 2025-26 – Month 9 Financial Performance Purpose: To provide an overview of the IJB’s financial performance as at Month 9 (December). 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 £4.479m reducing to £3.276m after planned recovery actions; (b) notes the progress with delivery of agreed savings; (c) approves the proposed and current actions (para 2.14) which are being taken to progress financial recovery 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 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 December further work is undertaken following the
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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 £4.479m (1.3%) reduced to £3.276m 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 @ mth9 4.479 1.111 3.368 Financial Recovery Plan Projections 1.203 0.771 0.432 Residual Risk 3.276 0.340 2.936 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 month 9 position reports a significant projected overspend on the North Ayrshire Council Services and this is unlikely to be fully mitigated by the proposed recovery action. Following approval by the IJB, the Chief Officer will write formally to North Ayrshire Council to request additional in-year funding to support the remaining overspend, subject to pursuing further recovery actions, with the residual position being: • North Ayrshire Council £2.936m At this stage the NHS projected overspend is partially mitigated by recovery action but this dependent on the full request for the shortfall in the reduced working week (RWW) of £0.551m being provided in full. The Health Board Director of Finance has offered partial funding which is insufficient and this has been returned for further consideration. 1.3 The movement in the projected outturn position for the 2025-26 financial year is illustrated in the graph below, this illustrates the movement in the gross and net projected overspend and the residual overspend or risk split between NHS and LA funding partners.
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1.4 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. The main areas of movement from Period 7 to Period 9 are: Favourable: • Care at Home £0.578m • Care Homes £0.221m • Integrated Islands £0.074m • Ward 1 and 2 £0.067m • Action 15 £0.054m • Lead Partnership payroll turnover £0.244m • Transition slippage £0.051m Adverse: • Adult Mental Health Inpatients £0.478m • LD Services within the Lead Partnership £0.130m • Children’s Residential placements £0.172m • Learning and Development income £0.083m • Social Care payroll turnover £0.400m • Recharge from East lead partnership £0.377m The position pre-recovery plan has improved by £0.467m, and this reflects the achievement of recovery plan action e.g. care at home and care homes. This means 5.187 5.259 4.957 4.946 4.946 4.479 1.175 1.733 1.604 1.939 1.939 3.276 0.519 0.776 0.001 0.058 0.058 0.34 0.656 0.957 1.603 1.881 1.881 2.936 -0.5 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 Period 3 Period 4 Period 6 Period 7 Period 8 Period 9 Projected Outturn Movement Gross PO Net Total PO Net NHS PO Net LA PO £m
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there is less scope for recovery action resulting in the position after recovery action deteriorating. 1.5 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 within allocated budget, on that basis the new Lead Partnership reporting template is included as Appendix G. 1.6 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. A recent exercise collated from services on the actual impact and cost indicated that the cost of cover is £1.210m (84% of staff covered) which is £0.551m higher than the current allocation. A request has been submitted to NHS A&A to review the funding allocation on a recurring basis. The IJB will be update on progress with this request. • Pay settlements for both NHS and Local Government staff have been agreed for 2025-26. The NHS element has been funded, and the current assumption is that the shortfall between budget planning assumptions and actual settlements will be fully funded for Local Government staff. 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 9 At month 9 against the full-year budget of £339.036m there is a projected year-end overspend of £4.479m (1.3%). The Integration Scheme outlines that there is an expectation that the IJB takes account of the totality of resources available to balance
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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 £3.368m in social care services and a projected overspend of £1.111m 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. Appendix F provides information on the costs of bank and agency staff. 2.3 Health and Community Care Services Against the full-year budget of £99.717m there is a projected overspend of £2.957m (3%) which is a favourable movement of £1.159m and the main variances are: a) Care home placements – net projected overspend of £0.324m (£0.221m favourable). This includes an overspend on placements of £0.774m (£0.321m favourable) which 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 9 there were 795 placements resulting in a projected overspend of £0.774m. The plan to manage down the number of permanent placements to reach the target is challenging due to the need to respond to referrals from hospital and to continue to support those in critical and substantial need in the community, this has led to a growing waiting list for access. The overspend is partially offset by income recovered from charging orders and gross funded placements which is projected to be £0.450m over recovered (£0.100m adverse). 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 and access to the funds or estate of service users. b) Care at home is projected to be £1.143m overspent (£0.578m favourable). The position reflects the cost of meeting the significant demand and level of provision for care at home support. The favourable movement is due to the action being taken to reduce the overall level of provision. The level of vacancies in the service has increased and whilst favourable it is coupled with increased levels of unmet need. c) Physical Disability Services – projected overspend of £0.326m (£0.028m adverse) split as follows: £1.004m over in residential placements, £0.407m under in direct payments due to increased clawbacks and £0.271m under in community care packages.
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d) Integrated Island Services is projected to overspend by £0.413m (£0.074m favourable). The most significant variance is a projected overspend at Montrose House of £0.353m which relates to the net overspend on agency staff (i.e. net of underspend on employee costs). There is also an under recovery of income and a write off of aged debt. In addition, there are overspends outwith Montrose House across property, continence and medical supplies, admin and transport. The Arran Patient Transfer contract is projected to overspend by £0.040m. e) Specialist Rehab wards – projected overspend of £0.195m (£0.037m adverse) (Redburn ward £0.191m overspend and Douglas Grant £0.004m overspend). 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 £0.703m (£0.067m favourable). 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 plan which will reduce this overspend and the reduction is reflected in the recovery plan. The projection for Health and Community Care services assumes that the allocation of unscheduled care funding will be fully utilised. 2.4 Mental Health Services Against the full-year budget of £118.470m there is a projected overspend of £1.720m (1.45%) which is an adverse movement of £0.217m prior to the re-allocation of the Lead Partnership variance to East and South HSCP. The main variances are: • Learning Disabilities are projected to overspend by £1.199m (£0.050m favourable). • Community Mental Health services are projected to underspend by £0.111m (£0.021m favourable movement). 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 holding the funding was agreed as part of the recovery plan at month 3.
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• The Lead Partnership for Mental Health is projected to be £0.976m overspent (£0.288m adverse) and the main variances are as follows: • Adult Inpatients – projected overspend by £1.429m (£0.478m adverse) due to very high levels of occupancy, patient mix and complexity and levels of continuous intervention which require additional supplementary staff and enhanced observations (1:1 and 2:1) and use of bank staff. The adverse movement relates to removal of previously assumed income (£0.600m) that would be recharged to another authority. • The UNPACS (Unplanned Activities) budget – projected overspend of £1.182m (£0.035m adverse) based on current placements. UnPACS placements are for individuals with very specific needs that 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. Part of the additional control measures agreed in month 3 was to expand the high- cost care package review group to include all UNPACS placement requests, the projected position includes provision for any new placements approved. • Learning Disability Services – projected to overspend by £0.435m (£0.130m adverse). The overspend relates to the delay in achieving the saving from Ward 7A. Whilst the ward closed there are still legacy costs as the staff are still being redeployed and some patients remain within Woodland View. • Elderly Inpatients – projected overspend of £0.129m (£0.008m adverse) due to the use of supplementary staffing. The elderly mental health wards continue to operate at full occupancy with waiting lists, with several patients who are on enhanced observations and bank costs remain high.
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• Eating Disorders – projected to overspend by £0.135m (no movement) 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 (EMHOF) – projected underspend of £0.624m (no movement). There was £0.624m of reserves held for EMHOF and the recovery plan approved the draw down of these reserves. • Psychiatry – is projected to overspend by £0.315m (£0.044m adverse) mainly due to junior doctor costs. A mitigation plan is being developed and the rota for junior doctors is being reviewed. A wholescale workforce review has been commissioned to determine longer term solutions for sustainability. • MH Pharmacy – is projected to overspend by £0.064m (£0.048m favourable). The overspend is less than projected due to a prior year rebate. Prior to this rebate there was an overspend due to increased demand and cost of medicines, and particularly the cost of Buvidal. This position is after investing £0.510m on a Pan Ayrshire basis (£0.170m per HSCP). • Action 15 – is projected to underspend of £0.375m (£0.054m favourable). There was £0.487m of reserves held for Action 15 and the recovery plan approved the draw down of these reserves which is the reason for the underspend. The projected underspend is after considering the legacy costs from the 2024/25 review of funding. Innovation Fund – projected underspend of £0.021m (no movement) 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 £1.347m (favourable movement of £0.244m) in 2025-26. Further information is included in the table below: Vacancy Savings Target (£1.160m) Projected to March 2026 £2.507m Over/(Under) Achievement £1.347m
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2.5 Children and Justice Services Against the full-year budget of £42.254m there is a projected overspend of £1.627m (3.9%) which is an adverse movement of £0.017m and the main variances are: a) Care Experienced Children and Young People is projected to overspend by £2.146m (£0.130m adverse). 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 £2.970m (£0.172m adverse) based 35 placements in month 9. This demonstrates an increase of 6 places since the start of the financial year. There are several 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. o Contractual inflation has still to be agreed for 4 providers. If this is higher than the assumed contractual inflation 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. Note that the costs associated with mobilising Boyle Street are being finalised and will be included in the month 10 report. • Looked After and Accommodated Children (fostering, adoption, kinship etc) is projected to be £0.851m (£0.047m adverse) underspent.
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• Residential respite – placements are overspent by £0.056m (£0.014m fav movement). 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 £0.114m (£0.035m favourable), largely due to staffing levels in the children’s houses and regrading of posts. • Care Leavers – projected underspend of £0.046m (£0.003m favourable) in rent costs. • Section 29 Payments (Throughcare Team) are projected to overspend by £0.046m (£0.001m adverse movement). b) Head of Service – is projected to underspend by £0.658m (£0.036m favourable). This consists of a projected overspend of £0.158m in relation to the previous staff reconfiguration saving 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 £0.776m £0.011m favourable) and which contributes to costs incurred across a number of C&F service areas. The favourable movement relates to additional funding and movement with costs associated with CP Independent Chair. c) C&F Health Team – is projected to overspend by £0.137m (£0.007m favourable) 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 was 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. 2.7 CHIEF SOCIAL WORK OFFICER This is projected to underspend by £0.073m (£0.083m adverse). The adverse movement mainly relates to a reduction in income in Learning and Development as some as the expected income will not be achieved until 2026/27. 2.8 MANAGEMENT AND SUPPORT Management and Support Services are projected to underspend by £1.831m (£0.233m adverse), and the main areas of variance are:
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• There is projected slippage on the LD and MH transition funding of £0.533m (£0.051m favourable) 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 £0.137m (no change) as a result of the 25/26 budget decision. • NHS shortfall in savings of £0.230m (no movement) which is not coded to specific areas and held centrally until recurring savings can be identified. • The funding for the Reduced Working Week (non-Lead Partnership element) is coded to Management and Support pending final confirming of the allocation. It is projected to underspend by £0.293m as the overspends in relation to these costs are shown on other lines outwith Management and Support. • An over-recovery of payroll turnover of £0.150m (£0.400m adverse) for social are services and an over-recovery of £0.282m (£0.038m favourable) 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 £3.550m £1.849m Over/(Under) Achievement £0.150m £0.282m 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. The turnover target for the North Lead Partnership for Mental Health services is detailed separately within the Lead Partnership information at section 2.4.
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2.9 Savings Progress The approved 2025-26 budget included £4.019m of savings. BRAG Status Position at Budget Approval £m Position at Month 9 £m Red - 1.000 Amber 2.984 1.027 Green 1.035 - Blue - 1.992 TOTAL 4.019 4.019 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. Any shortfall in relation to the red and amber rated savings are already reflected in the projected outturn. From month 7 to 9 the rating of the Brighter Pathways has increased from Amber to Red as the majority of the moves required to achieve this saving will not be implemented until month 12 onwards so a full year saving will not be made. 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 transfer 4 2 GP Prescribing adjustment 365 3 BBV funding returned to public health 8 4 Training Grade adjustment 71 2.11 Pan Ayrshire Lead Partnership services and Large Hospital Set Aside Lead Partnerships: - There is a requirement for the 3 IJBs to be aware of the position for Lead Partnership services and plans to deliver services from within allocated budget, on that basis the new Lead Partnership reporting template is included as Appendix G.
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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 £493.5million. The directorate is overspent by £27.2 million after 9 months including legacy CRES. 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 wards contributed an overspend of £5.2m after 9 months. Within the overall £27.2 million overspend Medicine are over by £10.9 million, Emergency Care by £8.9 million, Surgery by £3.5 million, Labs and Diagnostics by £2.8 million and Women and Children by £2.0 million. 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.
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The IJBs and the Health Board work closely in partnership to maintain service and improve performance. 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. • Pay settlements for both NHS and Local Government staff have been agreed for 2025/26. The NHS element has been funded, and the current assumption is that the shortfall between budget planning assumptions and actual settlements will be fully funded for Local Government staff. • 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. • 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.
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• Scot Excel inflationary increases for children’s services have been 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. • Risk related to NHS Reform investment being allocated by Scottish Government on a payment by results basis and in arrears. • Local Government Settlement and Distribution Group (SDG) – The SDG periodically review existing distributions to ensure that they remain fit for purpose. There is an agreed review of indicators for Adult Social Care Services, North Ayrshire are noted to be an area with an increase, however there is a risk that this funding will not be available in future years due to North Ayrshire Council overall not receiving any additional funding through the floor mechanism. These risks will continue to be monitored during 2025-26. Audit Scotland’s recent audit of the IJB Annual Accounts concluded that North Ayrshire IJB has effective financial management and reporting arrangements in place. The audit also highlighted success in achieving approved recurring savings. This demonstrates that the current financial recovery situation is not a result of inadequate financial oversight, poor reporting, or an inability to deliver efficiencies. Instead, the ongoing challenge relates to rising levels of need within the North Ayrshire population and the wider, and national, issue of ensuring the long-term financial sustainability of health and social care services. It is essential that the IJB works with all partners to accelerate and resource service redesign and transformation, in order to provide sustainable care for the future. An Internal Audit review of IJB transformation submitted to the September 2025 Performance and Audit Committee gave an opinion of substantial assurance in relation to the governance of the Transformation Plan. 2.13 RESERVES The IJB opening reserves position are 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 - - - -
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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. 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: MANAGEMENT ACTIONS/CONTROLS AGREED IN 2024/25 • 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. GOVERNANCE MEASURES AGREED IN 2024/25 • 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.
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MANAGEMENT ACTIONS/CONTROLS AGREED IN 2025/26 (AUGUST, SEPTEMBER AND DECEMBER 2025) • 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. • The senior managers for the main areas of overspend have been tasked with preparing an SBAR reports to be considered at the PSMT. This will cover current action being taken to reduce the overspend and future planned action. • Care home placements – move to one admission for every two discharges as per PSMT approval on 20th November 2025. The care placements at CARG to be approved on the basis of risk and need rather than current care setting. These levels will be exceeded where the risk to adults remaining in the community is considered too great and the only alternative is in immediately accessing a care placement. This may impact on delayed discharges within our acute and community hospitals. • Care at home – recruitment freeze to gradually reduce the overspend position. Again, this will impact on wait times and service performance. • All care packages (outwith in house care at home and older people placements agreed via CARG) will be considered for approval by the high- cost care package group. RECOVERY ACTIONS – MONTH 9 UPDATE • The updated recovery action is outlined in Appendix E. This includes the proposals agreed since month 3 and updated progress at month 9 and any changes to target reductions. The actions are a mix of cost reduction targets across various services and a drawdown of reserves. • There is a significant risk at this point in the financial year that all of the recovery action can be delivered especially around the residential placements for children and care home placements. • A summary of the residual risk is below: Residual Risk TOTAL Health/ NHS AA Social Care/NAC Month 3 1.175 0.519 0.656 Month 4 1.733 0.776 0.957 Month 6 1.604 0.001 1.603 Month 7 1.939 0.058 1.881
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• At month 9 this deteriorated to: TOTAL Health/ NHS AA Social Care/NAC Projected Overspend @ mth9 4.479 1.111 3.368 Financial Recovery Plan Projections 1.203 0.771 0.432 Residual Risk 3.276 0.340 2.936 • This plan is monitored and reviewed each month, and the following recovery actions are being proposed at month 9: o Seek to improve sickness absence rates through utilisation of Promoting Attendance Policy o Pursue cross-charge for persons admitted from out-of-area following failed placements in Ayrshire and Arran o Continue to progress implementation of Flexible Intervention Guideline to minimise length of time someone requires 1:1 (or higher) support. 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 The outturn is an overall year-end overspend of £4.479m (1.3%) 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
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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 is 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. 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 31st December 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 £'000 £'000 COMMUNITY CARE AND HEALTH 78,684 80,644 1,960 21,033 22,030 997 99,717 102,674 2,957 4,116 (1,159) : Locality Services 32,817 33,564 747 5,854 5,854 0 38,671 39,418 747 899 (152) : Community Care Service Delivery 41,652 42,455 803 0 41,652 42,455 803 1,677 (874) : Rehabilitation and Reablement 2,105 2,156 51 0 2,105 2,156 51 51 0 : Long Term Conditions 896 942 46 10,646 11,544 898 11,542 12,486 944 1,003 (59) : Community Link Workers 342 341 (1) 0 0 0 342 341 (1) (1) 0 : Integrated Island Services 872 1,186 314 4,533 4,632 99 5,405 5,818 413 487 (74) MENTAL HEALTH SERVICES 41,131 42,228 1,097 77,339 77,962 623 118,470 120,190 1,720 1,503 217 : Learning Disabilities 32,053 33,252 1,199 733 733 0 32,786 33,985 1,199 1,249 (50) : Community Mental Health 7,063 6,952 (111) 1,792 1,792 0 8,855 8,744 (111) (90) (21) : Addictions 2,015 2,024 9 1,901 1,901 0 3,916 3,925 9 9 0 : HBCCC 0 0 0 353 0 (353) 353 0 (353) (353) 0 : Lead Partnership Mental Health NHS Area Wide 0 0 0 72,560 73,536 976 72,560 73,536 976 688 288 CHILDREN & JUSTICE SERVICES 36,359 37,947 1,588 5,895 5,934 39 42,254 43,881 1,627 1,610 17 : Irvine, Kilwinning and Three Towns 3,247 3,293 46 0 0 0 3,247 3,293 46 71 (25) : Garnock Valley, North Coast and Arran 3,605 3,688 83 0 0 0 3,605 3,688 83 81 2 :Intervention Services 1,814 1,814 0 0 0 0 1,814 1,814 0 12 (12) : Care Experienced Children & Young people 22,755 24,901 2,146 0 0 0 22,755 24,901 2,146 2,016 130 : Head of Service - Children & Families 1,406 748 (658) 0 0 0 1,406 748 (658) (622) (36) : Justice Services 3,101 3,101 0 0 0 0 3,101 3,101 0 0 0 : C&F Health Team 431 402 (29) 5,015 5,126 111 5,446 5,528 82 88 (6) : Lead Partnership NHS Children's Services 0 0 0 880 808 (72) 880 808 (72) (36) (36) CHIEF SOCIAL WORK OFFICER 1,975 1,902 (73) 0 0 0 1,975 1,902 (73) (156) 83 PRIMARY CARE 0 0 0 53,262 53,259 (3) 53,262 53,259 (3) (17) 14 ALLIED HEALTH PROFESSIONALS 0 11,528 11,528 0 11,528 11,528 0 0 0 MANAGEMENT AND SUPPORT COSTS 8,033 6,829 (1,204) 3,797 3,403 (394) 11,830 10,232 (1,598) (1,831) 233 OUTTURN ON A MANAGED BASIS 166,182 169,550 3,368 172,854 174,116 1,262 339,036 343,666 4,630 5,225 (595) Return Hosted Over/Underspends to East 0 0 0 0 (320) (320) 0 (320) (320) (225) (95) Return Hosted Over/Underspends to South 0 0 0 0 (279) (279) 0 (279) (279) (196) (83) Receive Hosted Over/Underspends South 0 0 0 0 33 33 0 33 33 104 (71) Receive Hosted Over/Underspends East 0 0 0 0 415 415 0 415 415 38 377 OUTTURN ON AN IJB BASIS 166,182 169,550 3,368 172,854 173,965 1,111 339,036 343,515 4,479 4,946 (467) Over/ (Under) Spend Variance at Period 7 Movement in variance from Period 7 TOTAL Partnership Budget - Objective Summary Council Health 2025/26 Budget
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2025-26 Savings Tracker Appendix B Social Care: Ref Description Deliverability Status at budget setting Deliverability Month 9 2025/26 Saving Previously Agreed Savings (Full year impact) 1 Review of Day Care provision Green Blue 0.100 2 Service redesign (CAAST Team and Corporate Parenting team) Green Blue 0.034 Adjustments 3 Payroll Turnover Green Blue 0.099 Mental Health 4 LD Responder Service Amber Amber 0.150 Children, Families & Criminal Justice 5 Brighter Pathways Amber Red 1.000 Community Care & Health 6 Review of Day Care provision Amber Blue 0.107 7 Care at Home Amber Blue 0.500 8 Care Package Review (all services) Amber Blue 0.200 9 Deletion of vacant posts Green Blue 0.056 10 Increase to charging Green Amber 0.186 11 Admin Post Savings Green Blue 0.114 12 Financial Inclusion Green Blue 0.357 TOTAL SOCIAL CARE SAVINGS 2.903 Cross Service
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Health: Ref Description Deliverability Status at budget Deliverability Month 9 2025/26 Saving Adjustments 13 Increase recharge to East Ayrshire for beds at Woodland View Green Blue 0.010 14 Payroll Turnover Green Blue 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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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 25.045 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) Change Fund Allocation - HSCP FIO Team 7 T 0.021 Internal Commerical Waste 7 P 0.009 ICT Transfers 9 P (0.004) Roundings 9 0.001 166.182Social Care Budget Reported at Month 9 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 (25.045) 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
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HEALTH Period Permanent or Temporary £'m 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 Training Grade Adjustment (Dean Funding) 4 0.011 Medical Pay Award - Senior Medical - Additional 1% 4 0.086 Medical Pay Award - Specialty Doctors - Additional 1% 4 0.006 Virement to Medical Directorate from Mental Health Admin 4 (0.028) Transfer MAT Standards Psychiatrist 0.2 WTE 4 0.029 Primary Care Prescribing Tariff Reduction 4 (0.556) BBV transfer from Public Health 4 0.269 Training Grade Adjustment (Dean Funding) - August 5 0.129 Budget transferred to Capital for INV-3395435821 5 (0.006) Transfer from South - ANP contribution 5 0.030 Primary Care Prescribing Budgets reworked 5 0.130 HD157 3% pay award ADP North 5 0.057 North MDT funding to Arran Medical Group (Virement 11) 5 (0.043) Training Grade Adjustment (Dean Funding) - September 6 0.018 Transfer Methadone LES to East GMS 7 (0.008) Post to Medical records 7 (0.037) GP Prescribing budget adjustment 7 (1.094) ADP MAT Standards Allocation 7 (0.045) ADP ABI to East 7 (0.010) Drug Death Co-ordinator funding returned to PH (retiral - post funding returned) (0.040) BBV funding returned to PH (reduction in hours) 8 (0.008) Training Grade Adjustment (Dean Funding) - December 8 (0.071) Training Grade Rates Adjustment - December 9 0.086 Early Years funding 0.49 WTE Band 4 - MIN Allocation 9 0.020 GP Prescribing budget adjustment 9 (0.365) ANTICIPATED BUDGETS INCL HERE (NOT IN LEDGER) 9 (1.288) Roundings (0.003) 172.854 TOTAL COMBINED BUDGET 339.036 Health Budget Reported at Month 9
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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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Financial Recovery Action Plan Appendix E £m Projected Overspend at Month 9 4,479 SERVICE AREA Current Target at Month 9 Proposed Target at Month 9 Achieved at Month 9 Still to be achieved Target set (IJB Date) Community Care and Health a) Care home placements (329) (500) (400) (100) August 2025 - month 3 report b) Physical Disability Services (res, community and DPs) 0 0 0 0 August 2025 - month 3 report c) Specialist Rehab wards (100) (100) (57) (43) August 2025 - month 3 report d) Wards 1 and 2 (217) (175) (124) (51) August 2025 - month 3 report e) Care at Home (300) (750) (578) (172) August 2025 - month 3 report TOTAL (946) (1,525) (1,159) (366) Mental Health Services Current Target at Month 9 Proposed Target at Month 9 Achieved at Month 9 Still to be achieved Target set (IJB Date) a) Learning Disabilities 0 0 0 0 August 2025 - month 3 report b) Community Mental Health services 0 0 0 0 August 2025 - month 3 report c) Lead Partnership for Mental Health : 0 0 - Adult Inpatients (100) (75) 0 (75) August 2025 - month 3 report - Elderly Inpatients (150) (150) (62) (88) August 2025 - month 3 report - Psychiatry (150) (50) (14) (36) August 2025 - month 3 report - Action 15 Reserves (486) (486) (486) 0 August 2025 - month 3 report - Enhanced MH Outcome Framework Reserves (624) (624) (624) 0 August 2025 - month 3 report NORTH AYRSHIRE ELEMENT 38.65% (584) (584) (458) (126) August 2025 - month 3 report TOTAL (584) (584) (458) (126)
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SERVICE AREA Current Target at Month 9 Proposed Target at Month 9 Achieved at Month 9 Still to be achieved Target set (IJB Date) Children and Justice Services Target set (IJB Date) a) Residential Placements (400) (20) 0 (20) August 2025 - month 3 report TOTAL (400) (20) 0 (20) ALLIED HEALTH PROFESSIONALS 0 0 0 0 August 2025 - month 3 report CHIEF SOCIAL WORK OFFICER 0 0 0 0 August 2025 - month 3 report MANAGEMENT AND SUPPORT a) Payroll turnover 0 0 0 0 August 2025 - month 3 report b) Transition slippage (125) (150) (125) (25) August 2025 - month 3 report c) Contractual inflation (115) (115) (100) (15) August 2025 - month 3 report d) Service Redesign Fund (100) (100) (100) November 2025 - moth 6 report TOTAL (340) (365) (225) (140) OTHER AREAS b) Agenda for Change - assume fully funded (551) (551) 0 (551) August 2025 - month 3 report (551) (551) 0 (551) TOTAL RECOVERY ACTION (2,821) (3,045) (1,842) (1,203) Remaining projected overspend 3,276
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Bank and Agency Costs to Month 9 Appendix F 1) NHS 4863 (Registered) 4864 (Unregistered) 4853 (Registered) 4854 (Unregistered) TOTAL NORTH CORE SLT ADULT 3,098 3,098 WARD 1 WOODLANDS VIEW 41,006 222,323 263,329 WARD 2 WOODLANDS VIEW 23,337 319,637 342,974 ACH REDBURN REHAB WARD NRS 23,857 147,834 171,691 ACH DOUGLAS GRANT REHAB WD NRS 29,210 68,191 97,400 WARD 3 WOODLANDS VIEW NURSING 10,647 303,068 313,715 WARD 4 WOODLANDS VIEW NURSING 1,605 35,993 37,598 NEW CLONBEITH NURSING(JURA) 83,798 124,173 207,971 WVIEW THE GLEN ECT 4,939 10,222 15,162 WVIEW WARD 10 ACUTE MH NRS 5,576 215,351 220,927 WVIEW WARD 8 ACUTE MH NRS 19,000 665,038 684,038 WARD 5 WOODLANDS VIEW 2,562 39,962 42,524 WVIEW WARD 7B REHAB MH NRS 7,419 7,419 NEW DUNURE NURSING(CLONBEITH) 29,685 161,801 191,486 MH BED MANAGEMENT 20,920 20,920 TRINDLEMOSS 51,949 242,047 293,996 ARRAN HOSPITAL NURSING 61,859 38,415 100,274 CAMHS MANAGEMENT 1,944 1,944 CAMHS UNSCHEDULED CARE 1,482 1,482 EARLY YRS-C/F TEAM 1 923 923 EARLY YRS-C/F TEAM 3 974 974 IMMUNISATION NURSING 55,249 17,611 72,859 ARRAN DN 13,862 13,862 PACKAGE OF CARE (P) - AMG 103,722 103,722 PACKAGE OF CARE (P) - LMO 879 879 NC POC TEAM 2 990 990 NC POC TEAM 3 3,843 3,843 THREE TOWNS DN 1,187 1,187 FOXGROVE(NSAIS)ADVANCE RECRUIT 25,661 25,661 NORTH AHP MANAGEMENT TEAM 7,329 7,329 IRVINE DN 16,516 16,516 NORTH WEST COAST DN 29,774 29,774 GARNOCK VALLEY DN 52,203 52,203 LADY MARGARET NURSING 8,467 4,194 12,661 PREVENTION + SERVICES SPT TEAM 2,397 2,397 LD HEALTH CHECKS 12,238 12,238 NORTH CLDT 5,777 164 5,941 LDS MANAGEMENT 4,642 4,642 MHANPS MH UNSCHEDULED CARE 2,355 57 2,412 MHS INPATIENT MGT 15,113 210 15,323 CMHT NURSING-NORTH AYRSHIRE 9,362 5,890 15,252 WVIEW WARD 7C FORENSIC REHAB N 7,692 128,882 371 136,944 INTENSIVE COMMUNITY NURSING TEAM 36,520 2,417 38,937 ADULT MENTAL HEALTH LIASION TEAM 34,864 34,864 PCMHT NORTH 1,798 1,798 WVIEW WARD 6 LOW SECURE NRS 47,174 147,066 194,241 WARRIX AVE 97,883 73,923 171,805 ICFN - COMMUNITY PHLEBOTOMY 11,906 11,906 FORENSIC PSYCHOLOGY 3,248 3,248 CHILD HEALTH ADMIN 1,797 1,797 WVIEW WARD 7A LD A+T NRS 25,610 425,962 1,804 14,532 467,906 WVIEW WARD 9 ACUTE MH NRS 21,180 314,561 226 335,968 WVIEW WARD 11 ACUTE MH NRS 35,559 196,382 231,941 963,357 4,070,599 2,400 14,532 5,050,888 2) SOCIAL CARE Mth 9 Spend 260,647 103,863 18,706 500,592 97,334 981,142 Mh Acm Bank Agency Montrose House Brodick Unscheduled Care Funding Ld Acm Children Acm
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Official APPENDIX G Lead Partnership Report Background: The Integration Scheme creates various Lead Partnership roles across the three Ayrshire Integration Joint Boards. Each IJB, acting as lead partner, commissions services on behalf of the three Ayrshire IJBs and reclaims the costs involved. This arrangement is treated as an agency arrangement. The projected outturn position for each IJB is adjusted to reflect the impact of Lead Partnership services. The over or underspend in relation to each Lead Partnership services is not fully attributed to that partnership, and a share will be allocated to the other Ayrshire IJBs on an NRAC* basis in line with the agreed risk sharing mechanism. Within the Integration Scheme, as with all delegated budgets, the intention is that services managed under Lead Partnership arrangements should be delivered within budget. Should that not be possible, a financial recovery plan requires to be developed and approved by all three Integration Joint Boards. Should financial recovery plans for Lead Partnership services fail, then all IJBs are required to address any shortfalls which are not related to base line budget issues. There is a requirement for the 3 IJBs to be aware of the position for Lead Partnership services and plans to deliver services from within allocated budget. *NRAC and the percentage information is explained later in the report
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Official 1. SUMMARY 1.1 The summary of the financial position month 9 is given in the table below: Further detail by IJB is given below. Allocation of Variance IJB Area of Service Period Covere d Budget £’000’s Outturn £’000’s Variance £’000’s North £’000’s South £’000’s East £’000’s North Mental Health Lead Partnership Month 9 72,560 73,536 (976) (377) (279) (320) North Children Lead Partnership Month 9 880 808 72 27 21 24 South Community Store Month 9 1,203 1,203 0 0 0 0 South Family Nurse Partnership Month 9 2,804 2,833 (29) (11) (9) (9) South Continence Team Month 9 572 632 (60) (22) (19) (19) East Standby Services Month 9 319 319 0 0 0 0 East Primary Care (including Dental) Month 9 139,678 141,259 (1,581) (585) (492) (504) East Prison and Police Healthcare Month 9 4,233 4,086 147 54 46 47 East Allied Health Professionals (Lead) Month 9 5,537 5,159 378 140 118 121 East Other Lead Services Month 9 2,321 2,387 (66) (24) (21) (21) 2. North Ayrshire: 2.1 Services managed under Lead Partnership arrangements by North Ayrshire Integration Joint Board are projected to overspend by £0.904m in total. This equates to 1.2% of delegated Lead Partnership budget. 2.2 Allocation of Variance IJB Area of Service Budget £000’s Outturn £000’s Variance £000’s North £000’s South £000’s East £000’s North Mental Health Lead Partnership 72,560 73,536 (976) (377) (279) (320) North Children Lead Partnership 880 808 72 27 21 24 2.3 • The Lead Partnership for Mental Health is projected to be £0.976m overspent (£0.288m adverse) and the main variances are as follows:
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Official • Adult Inpatients – projected overspend by £1.429m (£0.478m adverse) due to very high levels of continuous intervention which require additional supplementary staff and enhanced observations (1:1 and 2:1) and use of bank staff. The adverse movement relates to removal of income previously assumed would be recharged to another authority. • The UNPACS (Unplanned Activities) budget – projected overspend of £1.182m (£0.035m adverse) based on current placements. UnPACS placements are for individuals with very specific needs that 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. Part of the additional control measures agreed in month 3 was to expand the high-cost care package review group to include all UNPACS placement requests, the projected position includes provision for any new placements approved. • Learning Disability Services – projected to overspend by £0.435m (£0.130m adverse). The overspend relates to the delay in achieving the saving from Ward 7A. Whilst the ward closed there are still legacy costs as the staff are still being redeployed. • Elderly Inpatients – projected overspend of £0.129m (£0.008m adverse) 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 £0.135m (no movement) 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 (EMHOF) – projected underspend of £0.624m (no movement). There was £0.624m of reserves held for EMHOF and the recovery plan approved the draw down of these reserves which is the reason for the favourable movement.
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Official • Psychiatry – is projected to overspend by £0.315m (£0.044m adverse) mainly due to junior doctor costs. A mitigation plan is being developed and the rota for junior doctors is being reviewed. • Mental Health Pharmacy – is projected to overspend by £0.064m (£0.048m favourable). The overspend is less than projected due to a prior year rebate. Prior to this rebate there was an overspend due to increased demand and cost of medicines, and particularly the cost of Buvidal. This position is after investing £0.510m on a Pan Ayrshire basis (£0.170m per HSCP). • Action 15 – is projected to underspend of £0.375m (£0.054m favourable). There was £0.487m of reserves held for Action 15 and the recovery plan approved the draw down of these reserves which is the reason for the underspend. The projected underspend is after considering the legacy costs from the 2024/25 review of funding. Innovation Fund – projected underspend of £0.021m (no movement) 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 £1.347m (favourable movement of £0.244m) in 2025-26. Further information is included in the table below: Vacancy Savings Target (£1.160m) Projected to March 2026 £2.507m Over/(Under) Achievement £1.347m 2.4 Recovery Plan Action • The Chief Officer and Chief Finance Officer have started a rolling programme of one-to-one meetings with individual budget holders across the HSCP to consider opportunities for cost reduction, service change and any spend to save propositions – to support the development of the 2026/27 budget but also to identify further cost reductions for the current financial year. • High-cost care package group – the remit of this group will be expanded to include all UNPACs placement requests. • Seek to improve sickness absence rates through utilisation of Promoting Attendance Policy • Pursue cross-charge for persons admitted from out-of-area following failed placements in Ayrshire and Arran
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Official • Continue to progress implementation of Flexible Intervention Guideline to minimise length of time someone requires 1:1 (or higher) support. 2.5 Performance Information • The elderly and adult 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. 3. South Ayrshire: 3.1 Services managed under Lead Partnership arrangements by East Ayrshire Integration Joint Board are projected to overspend by £0.089m in total. This equates to 1.9% of delegated Lead Partnership budget. 3.2 Allocation of Variance IJB Area of Service Budget £000’s Outturn £000’s Variance £000’s North £000’s South £000’s East £000’s South Community Store 1,203 1,203 0 0 0 0 South Family Nurse Partnership 2,804 2,833 (29) (11) (9) (9) South Continence Team 572 632 (60) (22) (19) (19) The main variances are as follows: • Community Equipment Store projected to come in line with budget, favourable movement of £131k from period 6. Whole System Intervention funding allocation has been provided to mitigate pressures to ensure timely discharge from hospital. This funding has meant the planned recovery action to reduce spend on non-fixed costs in line with budgeted monthly budget has been relaxed, additional funding will be used to maintain demand to ensure no impact to whole system flow. Budget Pressure of £0.429m approved by all HSCP's and added to Budget 25/26. • Family Nurse Partnership – projected overspend of £0.029m, favourable movement of £0.058m from period 6, due to vacancies not expected to be filled by the end of year. FNP - projected overspend of £0.065m, Scottish Government funding based at midpoint of salary, all posts in place at top of scale. SG have confirmed no additional funding will be provided. School Student Nurses projected underspend of £0.037m, since period 6 there are now 2 Band 6 nurse vacancies, with one projected to be filled at end of March 26. Team Leader to review and work within budget.
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Official • Continence – projected overspend £0.060m, favourable movement £0.004m. Continence Advisors £0.023m projected overspend 0.32FTE @ Band 3 additional to establishment £12k, and 1 B6 £10k who is now redeployed. Supplies £0.037m projected overspend due to increase spend in servicing to nursing homes. Projection includes £50k Ontex rebate (£25k 24/25 and £25k 25/26). Work ongoing with provider and DN teams across A&A to reduce spend to look at practice of continence assessments and use of different products to ensure in line with budget for 26/27. 3.3 Recovery Plan Action Community Equipment Store - £0.080m projected overspend in period 3. The service has been provided with a monthly budget that can be spent on equipment and supplies, this is after taking account of contracted service and maintenance costs that are fixed amounts required to ensure equipment is maintained and serviced in line with relevant legislation. The service was managing within this budget to reduce spend. Scottish Government Whole System Intervention Funding of has since been allocated to ensure supplies are available for timely discharge from hospital, avoiding the need to reduce spend and impact on delayed discharges. This funding is non-recurring and available in 2025/26 only. Family Nurse Partnership- £0.101m projected overspend in period 3, the Scottish Government have now baselined the original funding allocation for FNP of £1.7m, this did not take account of pay wards and increments, leaving a £0.101m shortfall. The AAHB Nurse Director wrote to Scottish Government to request additional funding for FNP to ensure the service is maintained, confirmation has since been received that no funding will be forthcoming. Financial mitigation of £0.058m in year includes not replacing staff and reducing staff hours, caseloads have been adjusted as a result of reduced capacity. SBAR for 26/27 Budget Pressures to be reviewed. 3.4 Performance Information To be further developed 4. East Ayrshire: 4.1 Services managed under Lead Partnership arrangements by East Ayrshire Integration Joint Board are projected to overspend by £1.122m in total. This equates to 0.7% of delegated Lead Partnership budget.
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Official 4.2 Allocation of Variance IJB Area of Service Budget £000’s Outturn £000’s Variance £000’s North £000’s South £000’s East £000’s East Standby Services 319 319 0 0 0 0 East Primary Care (including dental) 139,678 141,259 1,581 (585) (492) (504) East Prison and Police Healthcare 4,233 4,086 (147) 54 46 47 East Allied Health Professionals (Lead) 5,537 5,159 (378) 140 118 121 East Other Lead Services 2,321 2,387 66 (24) (21) (21) The main variances are as follows: • Allied Health Professions (Lead Partnership) - £0.378m projected underspend which mainly relates to staffing savings. An increase in overall supplies expenditure has seen a small adverse movement from month 6 projected underspend £0.420m. • Primary Care and Out of Hours Services (Lead Partnership) - £1.581m projected overspend which is an adverse movement of £0.408m at month 6. The projected overspend includes two provisions in relation to backdates Ayrshire Urgent Care Services holiday pay from 1 July 2023 to 30 June 2025 based on 12.8% of total cost paid over that period and five years of backdated Statutory Maternity Pay in GP Practices costing £1.350m and £0.156m respectively. There are projected additional costs within Primary Care Contracting and Support £0.098m (£0.402m overspend month 6) The favourable movement relates to a budget realignment of historic savings following work undertaken to finalise the funding source, partially offset by adverse variances, including new Office 365 licence costs and additional spend related to the GP Sub-Committee and staffing costs. Primary Medical Services are projected to overspend by £0.666m (£0.643m at month 6), largely due to increased pension and sickness cover costs. Primary Medical Services payments also show an overspend due to additional IT costs. These projected additional costs are being partially offset by a projected underspend £0.159m (£0.309m at month 6) against Ayrshire Urgent Care Services based on average of month 1 to 9 expenditure and cross charges based on 2024/25 trends (and is after building-in an allowance for public holiday cover in the remainder of the financial year). Funding has been allocated to partially offset Urgent Care Pathway costs £0.823m (projected to outturn £0.249m over allocated funding). Funding has also been allocated to Covid-19 Therapeutics of £0.274m, with costs projected at £0.231m. There is a projected underspend of £0.505m (£0.555m at month 6) in Dental services that reflects that staffing numbers are running at less than establishment, alongside reduced equipment costs. • Prison and Police Healthcare (Lead Partnership) - £0.147m projected underspend at month 9 (£0.013m overspend month 6) is due to realignment of budget of £0.192m to offset additional prescribing costs. Prison prescribing was highlighted as a budget pressure as part of the 2025/26 budget. Both East Ayrshire and South Ayrshire IJBs had approved additional funding to offset this pressure however North Ayrshire IJB
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Official did not provide for this in their approved budget. The additional funding has now been allocated against the prescribing budget, with North Ayrshire IJB agreeing to allocate additional funding towards Specialist Mental Health Unplanned Activities (UnPACS) (hosted in North Ayrshire) to account for this in the current financial year, with work to be undertaken to align resources as part of the 2026/27 budget-setting process. • Other Services (Lead Partnership) - £0.066m projected overspend (£0.095m overspend month 6). The £0.066m projected overspend (£0.095m overspend month 6) is due to reduced Area Wide Evening Services, with continuing Palliative Care Services cost pressures. Palliative Care Services budgets continue to be closely monitored and reviewed, however increased costs largely reflect demand for provision of services. This pressure will require to be considered on a pan-Ayrshire basis, as part of the 2026/27 budget-setting process. • Children’s Services - £0.112m projected underspend (£0.006m overspend at month 6) is largely due to reduced staffing costs. 4.3 Recovery Plan Action The East Ayrshire Lead Partnership projected overspend £1.122m represents an adverse movement from month 6. This is largely due to a provision of £1.350m related to a legal challenge in respect of holiday pay entitlement for GPs undertaking Ayrshire Urgent Care Services sessions. This issue was initially communicated by NHS Ayrshire & Arran at month 6 and has been discussed with the NHS Ayrshire & Arran Interim Chief Executive and Director of Finance. As a consequence of this discussion, it is considered prudent to include this as a provision for backdated costs at month 9. In addition, the projected outturn position includes a provision of £0.156m related to five years back payment of Statutory Maternity Pay costs to GP Practices. Primary Care colleagues are currently working with GP Practices to finalise the sum due, however it is considered prudent to include this provision for backdated costs at month 9. Both provisions were included within the month 8 summary Financial Management Report to the Audit and Performance Committee on 27 January 2026. No additional Financial Recovery Plan proposals for East Ayrshire hosted services are included within this report, with further discussions required with NHS Ayrshire & Arran regarding funding implications, as well as how these pressures are to be managed going forward. 4.4 Performance Information To be further developed 5. NRAC 5.1 NRAC is the NHS Scotland Resource Allocation Committee Formula, a method to allocate funding to NHS Scotland Health Boards. Its primary objective is to promote equitable access to healthcare by assessing each board's relative need based on factors like population size, characteristics influencing healthcare needs, and service delivery
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Official costs. The formula sets "target shares" for funding distribution, although final allocations may differ to ensure funding stability. 6. Reporting Cycle North: Month 3,4,6,7,9,10 and 12 South: Month 3,6,9,10 and 12 East: Month 2, 4, 6, 9 and 12