Dumfries & Galloway Royal Infirmary.
Health chiefs are warning of “unprecedented” financial challenges as they bid to save nearly £30 million.
And there are likely to be “quite significant changes” to healthcare services if budget targets are to be met.
Chairman, Nick Morris, said: “It’s a significant financial challenge in the scale that we’ve never had before. It will lead to significant service restructuring and modernisation as we cannot deliver the service changes and efficiencies we’re looking for through tinkering.”
An update from finance director Katy Kerr revealed the board is on track to return a £28.9 million financial loss in 2023/24. It is intended the hole will be plugged with brokerage from the Scottish Government, which already provided more than £9 million to NHS Dumfries and Galloway in 2022/23. Both amounts have to be repaid.
Ms Kerr’s report showed that the board is set to start 2024/25 with a deficit of £35.2 million – and if no savings are made that could rise to £54.2 million.
A savings target had been set at £18.3 million, which would take the deficit back to £35.8 million.
However, the Scottish Government has now told the board that the deficit is capped at £25 million – meaning as much as £29.2 million could need to be saved next year.
Ms Kerr said: “This would increase our savings target up to eight per cent in terms of delivery and we know that is far in excess of anything we’ve managed to deliver.”
She said officials had been aware of the potential challenge since before the coronavirus pandemic, with the demographic challenges of an elderly population creating a “perfect storm”.
She described the financial challenge as “unprecedented”, a view shared by health board chief executive Jeff Ace.
He said the pandemic had cost four years of redesign and cost reduction.
Mr Ace – who will retire at the end of March – told members: “We’ve now got to enter into an accelerated programme, which is really unprecedented.
“It will be a real test for us as a board as to how we go about this programme.
“You can have successful redesign programmes that are focussed on improving quality and improving patient experience, and you can have cost reduction programmes that are simply trying to make current services cheaper.
“The former work, the latter don’t and we need to make sure we’ve got the courage of our convictions to redesign our service model in a way that better meets the needs of our population, provides a better working environment for staff and is less costly.
“We have to redesign on that basis of delivering better quality, better outcomes, lower waits and a better staff experience while still taking out that cost base. If we just try to make the current system cheaper, we will fail.”
Chief operating officer Julie White – who is set to take over from Mr Ace – said: “Things will have to look very different to how they look today.”
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