HEALTH chiefs in Argyll and Bute have reported an underspend of £2.6million for the 2023/24 financial year.

But social care services for older people in the area were subject to a “significant” overspend as a result of interim arrangements while a new contract is progressed.

It is believed that the area’s health and social care partnership (HSCP) has resources in place to cover its budget gap for the 2024/25 financial year.

The details are given in a report which will go before the HSCP’s integration joint board at its meeting on Wednesday, May 29.

James Gow, the HSCP’s head of finance and transformation, said: “This report provides a provisional summary of the year-end financial position which is subject to final accounting adjustments and external audit.

“The position has improved, for health services, and the HSCP is reporting an overall underspend of £2.6m against its budget of £355m. Additional funding was confirmed in the last month of the year and some favourable movements against forecast were also identified which reduced spend, particularly relating to drugs costs.

“Overall, this enabled the HSCP to maintain its reserves at a higher level than anticipated. Additionally, £4.7m of new non-recurring funding has been allocated to reserves to assist with future sustainability.

“The improved performance provides funds for investment and enables the HSCP to take a longer term approach to addressing the financial challenges it faces going forward.

“It believes it now has resources in place to cover its budget gap for 2024/25 and to progress infrastructure and transformation projects without having to identify and implement additional savings plans.

“Financial risks remain high despite the favourable performance. A new spending review is expected from the Scottish Government in June 2024, this will help inform medium term financial planning.”

Mr Gow added: “As has been reported all year, several social work budgets have been under severe pressure and older people services overspent significantly (by £2.4m or five per cent).

“This was partly offset by the planned use of reserves, underspends on other services and vacancies. The overspend was as a result of increased care home placements and higher demand and costs for care at home services.

“The overspending includes the additional costs relating to interim arrangements in the care at home service while the new contract is being progressed. This includes uplifts to improve terms and conditions for staff, to assist with the sustainability of the service and reduce unmet need.

“The overspend was partly offset by savings in other areas including children’s services and learning disability budgets. The older people service also took on the direct staffing and management of care at home services in Kintyre towards the end of year, this added slightly to the overspend.

“The social work budget was balanced through the increased use of general reserves which reduced by slightly more than anticipated as a result.”