NHS Ayrshire and Arran is likely to end the financial year in a better position than it anticipated, a report has revealed.

But the ongoing concerns around the financial impact of unfunded beds, staff and medications will continue to place pressure on budgets.

Last year, Ayrshire and Arran Health Board planned for a deficit budget, expecting to spend £56.4m more than they receive.

On top of its core funding, the Scottish Government gave NHS Ayrshire & Arran £5.6m in sustainability funding. The service had also budgeted for new medicine funding, for which it received £18.2m.

This additional money came with the expectation from the Scottish Government that they would reduce the budget deficit to £50.8m.

Last month, NHS Ayrshire & Arran also received a one off payment of £10.965m from the UK Treasury as a result of an earlier announcement of funding for NHS in England and Wales, thanks to the Barnett formula.

This has left NHS Ayrshire & Arran with a projected deficit of £37.7m, of which the the majority, £28.7m, is from acute services.

A report to the board stated that closures of some unfunded beds provided during the pandemic and reduce nursing agency use had showed there were ‘signs of improvement’.

However, over the already difficult winter period this progress had been ‘challenging’ it admitted.

The board had sought to make cuts and savings of £9.6m in March 2023, with increased cost pressures of £53.2m and, at that point, just £19.7m in additional funding.

However, it is now expected that only £8.9m of savings will be achieved.

The report explained: “An excess of cost pressures over the funding uplift and achievable cash efficiency savings has caused a deterioration in the planned annual deficit from last year.

“The acute overspend against budget is partly driven by excess unfunded beds being open and high use of agency nurses and doctors.”

The annual budget for acute services is £425.3 million and was overspent by £28.7 million as of February 2024.

Of this, £9.1 million was spent on unfunded beds, with other pay and supplies overspends as well as unachieved savings also contributing.

Pay is £19.7 million overspent. Nursing pay was £11.3 million overspent whilst medical pay was £7.6 million over. A total of £7.96m has been spend on nursing agencies. This is mainly due to a lack of staff for unfunded beds.