Health and Social Care: medium term financial framework

This Framework supports the Health and Social Care Delivery Plan and sets out in more detail the potential approach and type of initiatives required to ensure continued delivery of a financially balanced and sustainable Health and Social Care system.


Our NHS celebrated its 70th Birthday this year and it is clear that our most cherished of public services has had to evolve, changing to reflect advances in medicine and the changing needs of our people. Our NHS, and the wider health and social care system, will need to continue to adapt, recognising changing demands and that people are living longer, thanks in no small part to the NHS and the care and treatment it has provided.

Our staff do an outstanding job, day in and day out. The vast majority of people get a fantastic and timely service, demonstrated in high satisfaction levels. For example - 90% of Scottish inpatients say NHS hospital care and treatment was good or excellent.

Planning for the future of our health and social care services requires a clear financial context which outlines the challenges facing the system, but at the same time looks at our approach to addressing these pressures – through a combination of investment and reform.

This Financial Framework aims to consider the whole health and social care system and how this supports the triple aim of better care, better health and better value. It outlines that investment, while necessary, must be matched with reform to drive further improvements in our services - considering the health and social care landscape at a strategic level. It has been developed with input from NHS Boards, COSLA, Local Government and Integration Authorities.


This framework and supporting data will be updated as reform plans evolve, allowing local systems to develop plans within an overall set of financial parameters and alongside workforce and service considerations. Throughout this document, 2016/17 is used as the baseline year for data, reflecting that this is the latest year of published information from the NHS Cost Book and Local Government Local Financial Returns.[1]

Determining the factors which contribute to the wider financial context we will operate within is far from simple, not least as the Scottish Government does not have all the flexibility and levers to manage and plan its finances, as much of this remains reserved to the UK Government.

Additionally, our public finances continue to face the impact of the financial constraints imposed on us by the UK Government’s austerity approach – a £2.6 billion real terms reduction in the our discretionary block grant between 2010/11 and 2019/20.

Perhaps the greatest threat to our future finances is the damage caused by Brexit. The economic damage of Brexit could reduce Scotland’s GDP by £12.7 billion by 2030 compared with staying in the EU[2] and it is impossible to ignore the risk it creates to some of the planning assumptions in this framework.

The UK Government funding announcement for NHS England in June 2018 included projections through to 2023/24[3] – and indicated associated Barnett resource consequentials for the devolved administrations. The funding assumptions in this document cover the same time period and are predicated on the assumption that the funding the UK Government has promised will be delivered as a true net benefit to the Scottish Government’s budget. Clearly any actions by the UK Government which did not deliver this additional funding as a net benefit would have potential consequences on funding for Scotland’s public services.

It should also be noted that the funding announced by the UK Government for NHS England in June fell some way short of the resource required to address the fundamental challenges facing the health and social care services in England. It did not, for example, touch on necessary funding for social care and public health services.

Health and Social Care Delivery Plan

The Health and Social Care Delivery Plan[4] set out a framework for the delivery of services, bringing together the National Clinical Strategy and our key reform programmes, such as Health and Social Care Integration. Its aim is to ensure that Scotland provides a high quality service, with a focus on prevention, early intervention and supported self-management, and if people need hospital services, they are seen on a day case basis where appropriate, or discharged as soon as possible.

Over the last ten years there has been significant investment in the health service – with the health budget having increased to a record level. Striking progress against key challenges to our nation’s health and healthcare has been seen, with steady falls in mortality from the ‘Big Three’ – cancer, heart disease and stroke.

Bold action has been taken in Scotland in public health improvement, including major and innovative developments such as the ban on smoking in public places, raising the age for purchasing tobacco from 16 to 18 and the introduction of a minimum unit price for alcohol. Those aged 65 and over are entitled to free personal care when they need it, with extension to those under 65 who need it being delivered by April 2019, and there is free nursing care for anyone at any age who requires these services.

The Integration of Health and Social Care aims to ensure that people are supported at home to live independently for as long as possible, ensuring that people’s care needs are anticipated and planned appropriately. This is focused on the key areas of reducing the inappropriate use of hospital services and shifting resource to primary and community care.

We recognise that like other health and social care systems around the world, we do face inflationary pressures, which could be exacerbated by the uncertainty that is being created by Brexit. Achieving long-term financial sustainability and making best use of resources is critical to delivering on the Delivery Plan’s objectives.

The guiding principle underpinning this framework is simple – that we continue to deliver a service for our patients that is world class and that takes forward our ambition that everyone is able to live longer, healthier lives at home, or in a homely setting.


Health Finance Team:

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