Health trusts asked to draw up cost savings to cover £300m budget shortfall

Health trusts in Northern Ireland have been asked to work up cost-saving plans as part of efforts to bridge an estimated £300 million budget gap.

It is understood the plans are due to be delivered to the Department of Health by the end of May, at which point Health Minister Robin Swann will be required to make decisions on how to reduce spending.

A benchmarking exercise conducted by experts working with NHS England is already under way to identify other potential savings.

Mr Swann has claimed an additional £500 million he was allocated in the budget agreed by the Stormont Executive last week falls well short of what is required to maintain health service provision at current levels.

He voted against the spending plan and has refused to rule out resigning if the budget is approved by the Assembly in its current form.

The minister had bid for an additional £1 billion – an amount that represented the entirety of the uncommitted funding available for distribution among all Stormont departments.

The £1 billion comprised £300 million to maintain a pay award made to health staff at the end of the last financial year as part of the Government’s financial package to restore powersharing. It also included £150 million to make a further 3% pay award to staff in this financial year.

The remaining requested £550 million was described as for inescapable pressures.

Among the allocations within that £550 million was £200 million to cover projected overspends by the five main health trusts (the trusts overspent by £150 million last year); £80 million to reduce red flag cancer waiting lists; £70 million to account for inflation; £70 million to cover the costs of new drugs expected to become available in 2024/25; and £80 million to pay for the impact of the UK Government rise in the national minimum wage.

Mr Swann had told Executive colleagues he was prepared to accept an additional £800 million in the budget and would look to make up the £200 million shortfall on the £1 billion with in-year reallocations from central funds and potential cost-saving steps such as limiting the 2024/25 pay award to 2%.

However, he said the £500 million he has been allocated by the Executive is unsustainable and will have serious consequences for health service delivery in Northern Ireland.

Mr Swann has also been allocated £34 million as part of the UK Government’s financial deal for specific initiatives to tackle the region’s spiralling waiting lists.

Officials in Mr Swann’s department are now examining how the estimated £300 million hole in their spending plans can be plugged, with the health trusts’ plans central to shaping future ministerial decisions on future service provision in Northern Ireland.