Financial problems reported at NHS Highland and NHS Ayrshire and Arran

Two health boards face “significant financial challenges” if they are to remain sustainable, Scotland’s public spending watchdog has warned.

Both NHS Highland and NHS Ayrshire and Arran have been highlighted in an Audit Scotland report on the health boards’ financial sustainability.

The report comes after Auditor General Caroline Gardner told MSPs previous warnings over NHS Tayside – placed under special measures by ministers due to financial irregularities – had gone unheeded.

Although health spending in Scotland has gone up every year, the Scottish Government has also asked health board to make efficiency savings in order to keep up with demand.

In the new report Audit Scotland warns a “significant proportion” of both NHS Highland and NHS Ayrshire and Arran savings have only been one-off measures such as selling assets.

“These boards are unable to deliver services within budget, savings targets have not been met and it will be difficult to achieve financial sustainability in future,” it said.

Both boards already rely on ‘brokerage’ loans from Scottish Government to provide their services, and face further shortfalls in the future.

Auditor General Caroline Gardner said: "Both NHS boards face significant financial challenges, and I have serious reservations about their ability to make the changes that are needed to achieve financial balance in future.”

After NHS Tayside was placed under ministerial control last year, Gardner told MSPs repeated warnings about the finances at the board had not been heeded

 “Internal auditors raised concerns about the retrospective transactions back in 2014 and it is included in the external auditors’ report as well,” she told members of the Public Audit Committee.

“There is a significant question about why, throughout the NHS system, warnings from auditors are not being taken seriously. The reason why is something you would need to ask of Scottish Government and of the board itself.”

An audit of the whole of NHS Scotland's finances is expected later this month.