SIGNIFICANT financial challenges continue to be faced by NHS Dumfries and Galloway, its Board was informed at a meeting yesterday.
A report noted that in June 2025 the Board had approved a financial plan for 2025/26 with a projected overspend of £28 million.
The financial plan has been accepted by Scottish Government – who recognised that it did not meet the £25 million deficit limit which it had set, but that the Board continues to look at bridging this gap.
Addressing this position, Interim Director of Finance Susan Thompson said: “To manage the projected overspend, the Board must achieve savings this current financial year of £21.3 million.
“We must also ensure that directorates operate within their allocated budgets.”
Offering an update, she added: “Following the delivery of record savings in 2024/25, the Board must now build on this and deliver its most ambitious programme of savings during 2025/26 – equating to over £21.3 million.
“While the current position is challenging, we remain confident that through working with our clinical and operational teams, we will recover the position.”
A number of factors are recognised as contributing to the overspend over several years, despite the record-breaking savings which have been achieved.
As of the start of this month, the Board has been escalated to Stage 3 of the NHS Scotland Support and Intervention Framework for finance. This reflects ongoing concerns about its financial sustainability.
Stage 3 involves enhanced monitoring, additional support, and increased oversight from the Scottish Government.
Although the Board has been formally at Stage 2 for the past two years, the level of work and support during that time has effectively been equivalent to Stage 3, and this formal escalation now codifies that arrangement.
Efforts are underway to return to Stage 2 as soon as possible.
Work continues to focus on meeting this year’s financial targets while also looking ahead to develop savings plans aimed at improving the financial position for 2026/27 and reducing the overall deficit.
Ms Thompson said: “A significant portion of the current 2025/26 financial plan relies on delivering non-recurring savings and funding. This means that these savings are one-offs which do not apply going forward, and that makes improving next year’s position even more challenging.”
The deficit has been building over the past decade, driven by a combination of factors.
These include difficulties in maintaining consistent efficiency savings, alongside rising inflation which has increased the cost of clinical supplies and services.
Other pressures include increased staffing to continue delivering safe and effective care, a growing volume of prescribed medicines, higher building running costs – such as gas, electricity, water, and rates – and increased spending on care provided by other Boards when it can’t be delivered locally.
Additional costs have also come from new national systems like Office 365.
While the Board remains fully committed to delivering safe and effective care, the scale of the financial challenge means difficult decisions will likely be necessary.
In addition to these measures, key actions currently in progress include strengthening financial governance and oversight, implementing additional financial controls, proactively engaging with external partners, and revising the Board’s engagement strategy.