Warning NHS could 'deteriorate sharply' as share of hospitals and ambulance funds to be cut by SNP

The Institute for Fiscal Studies (IFS) has stressed that real-terms increases to health boards amounted to just an average of 0.4 per cent a year over the next three years.

The IFS stressed that the SNP government’s plans imply a substantial reduction in the share of funding going towards hospitals and the ambulance service, and a big increase in the share going to other services, such as primary care and social care.

The study warned that the proposed settlement is “just one-sixth the rate of the overall increase” for spending in health and social care, where funding is poised to grow by 2.4 per cent a year in real terms.

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For health boards, the report said there was a “very slow rate of growth” which would “require big increases in efficiency and productivity to avoid degradation in service quality”.

The report added that health boards could “struggle with their small funding increases unless they can deliver large efficiency gains”.

The IFS contrasted the average 0.4 per cent a year increase to health boards with a rise of almost 12 per cent a year on average to remaining parts of the health and social care portfolio.

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While the report was “unclear” how this money would be distributed between primary care services, such as GPs and the social care sector, the report said this represented a “major (relative) transfer of resources out of hospitals”.

The think tank also warned it is “high likely” that spending on health and social care will have to be “topped up substantially in 2026–27”.

While the Scottish Government is targeting annual savings of 3 per cent, the IFS said health boards had reported savings averaging 1.3 per cent in 2024-24 and 2.2 per cent in 2024-25.

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IFS research economist Martin Brogaard, co-author of the report, said the Scottish government was “banking on big improvements in hospital and ambulance service productivity” along with a “shift in resources to some combination of primary and social care to refocus on preventing ill health”.

Mr Brogaard added that ministers may hope this will “enable health funding to stretch further and avoid a deterioration in service quality”.

Scottish Labour finance spokesperson, Michael Marra, said: “Scotland’s public finances are at breaking point after years of mismanagement by this wasteful and incompetent SNP government.

“It is crucial that our overstretched NHS is not harmed further by the SNP’s inability to make its sums add up.”

Scottish Conservative shadow finance secretary, Craig Hoy, said: “This damning analysis confirms the SNP are set to shamefully short-change frontline healthcare services.

“The nationalists’ incompetence means performance levels in hospitals and in the ambulance service will deteriorate sharply unless major savings are delivered, something which John Swinney’s government has shown little interest in delivering over the last two decades.”

Health Secretary Neil Gray said: "Our draft budget includes record funding of £22.5 billion for Health and Social Care to support a more sustainable and resilient system. Our plan is delivering - long waits have reduced for seven consecutive months, we are seeing downward trends across nearly all waiting list indicators, and thousands more appointments, operations and procedures are being delivered this year.

"We want the people of Scotland to live healthier, longer lives, with services that are accessible, efficient and tailored to people's needs. While challenges remain, we will continue to reform, focusing on prevention, improving access and shifting the balance of care to communities.”