NHS Ayrshire & Arran is forecasting a £45 million deficit this financial year amid concerns over its ability to deliver millions of pounds in planned savings.
The health board recorded an £18.8 million deficit during the first five months of 2026/27, according to a financial report going before board members on Monday, October 12.
The figure is £100,000 worse than planned, but officials continue to forecast a year-end deficit of £45 million.
Savings programme shortfall
However, the report identifies risks surrounding the board’s £57.1 million savings programme, with current projections indicating that £49.9 million could be delivered.
That leaves a potential £7.2 million gap against the savings target.
The health board is currently at level four of the Scottish Government’s performance escalation framework, reflecting concerns over its financial sustainability.
Recovery plan and statutory duty
Its financial recovery plan, approved by the board and Scottish Government, involves reducing the annual deficit from £45 million in 2026/27 to £30 million in 2027/28 and £15 million in 2028/29.
The latest report states that the board has a statutory duty to break even but acknowledges that this requirement will not be met during the current financial year.
A total of £18.8 million in savings had been achieved by the end of August, including savings attributed to Integration Joint Boards.
Cost pressures and offsets
The report says the underdelivery of savings is being partially offset by underspends elsewhere, including corporate, infrastructure and support services.
Acute services, which have an annual budget of £531.5 million, were £4 million over their year-to-date budget.
This was largely attributed to £4.9 million of savings that had not yet been allocated.
The financial report also highlights increasing cost pressures associated with the Band 5-6 review, warning that the estimated impact has reached the maximum level the organisation believes it can manage within existing resources.
The board’s financial risk register identifies a failure to deliver sufficient savings as a potential threat to delivering its services and to its reputation as a board.
Officials say management action continues to focus on progressing the savings programme while maintaining financial controls.
Despite the pressures, the health board expects to remain within the £45 million maximum deficit support funding agreed with the Scottish Government.
The report will be discussed by NHS Ayrshire & Arran board members on October 12.
