Why NHS Boards Rely on Brokerage and Loans

17th November 2025

For years, Scotland's health service has relied on an obscure but increasingly important financial tool: brokerage.

Most people in the Highlands have never heard the word, yet it now sits at the centre of NHS Highland's financial future — and it shapes everything from staffing levels to the long-term sustainability of local services.

Brokerage is often described as a "loan" from the Scottish Government, but that's not quite accurate. While brokerage behaves like a loan — in that it must eventually be repaid — it works very differently, and understanding that difference helps explain why boards such as NHS Highland have accumulated such large sums of debt-like support.

In recent Audit Scotland reporting, NHS Highland is shown to have £106.5 million in cumulative repayable brokerage, placing it among the most financially challenged health boards in Scotland. At the same time, other boards such as NHS Grampian and NHS Ayrshire & Arran have taken similarly large amounts of support, raising wider questions about whether the current funding model is sustainable.

To understand how we got here, we need to look at three linked questions:

What is brokerage? Why do NHS boards rely on it? And what does it mean for the future of NHS Highland?

What Exactly Is Brokerage?

Brokerage is a form of temporary financial support provided by the Scottish Government when a health board cannot break even at the end of the financial year. Under Scots public-finance rules, health boards are legally required to balance their books but when rising costs, recruitment challenges, inflationary pressure, and service demand make that impossible, the Government steps in.

However, brokerage is not a grant. It is repayable. In effect, it is a debt-like advance that allows a board to meet its legal duties while smoothing the financial problem into future years.

What makes brokerage different from a standard loan is that:

There is no fixed repayment schedule.

No interest is charged.

Repayment only begins once the board returns to financial balance.

In some circumstances, brokerage can be converted into a non-repayable allocation — though this is increasingly rare.

It is, in essence, a financial safety net designed for a system that struggles to match demand with the money available.

Why Brokerage Is Not Called a Loan — Even Though It Feels Like One

The word loan conjures up interest rates, repayment dates, and bank-style conditions. Brokerage has none of these. It is designed not as a punishment for overspending, but as a stabiliser for an essential public service that cannot simply stop when the money runs out.

That said, in practical terms brokerage acts like a growing internal debt:

It accumulates year after year.

It creates long-term financial drag.

It limits a board's ability to invest in improvements.

It signals a failure of funding structures to keep pace with real-world pressures.

For these reasons, journalists, MSPs and even Audit Scotland reports will sometimes describe brokerage as a "loan". While the term isn't technically correct, it captures the underlying reality: boards are surviving by borrowing from tomorrow to pay for today.

Why NHS Boards Are Using More and More Brokerage

Across Scotland, health boards are under unprecedented pressure. Rising demand for emergency care, social-care delays, difficulties recruiting clinical staff, increasing drug costs, and the long-term effects of Covid have all driven up spending faster than funding increases.

When budgets no longer match operational reality, brokerage becomes essential.

Some boards require occasional brokerage. But others have become structurally dependent on it — needing support year after year just to stay afloat.

Audit Scotland's latest findings highlight the scale of the issue:

NHS Ayrshire & Arran now has £129.9 million in outstanding brokerage — the largest in Scotland.

NHS Grampian required £65.2 million in 2024/25 alone, and holds around £90 million over two years.

NHS Highland sits with £106.5 million, reflecting years of accumulated financial pressure.

The pattern is clear: brokerage is no longer a temporary fix. It has become a central feature of how the NHS in Scotland balances its books.

Why NHS Highland’s Position Is Particularly Important

For Highland residents, the most crucial fact is that NHS Highland carries an exceptionally high level of repayable brokerage — despite being a geographically vast board with a relatively small population.

Several structural pressures make NHS Highland especially exposed:

1. Rurality and geography

Delivering healthcare across remote and island communities is expensive. Travel time, low population density, and the need to maintain small hospitals and clinics all drive up costs.

2. Recruitment challenges

NHS Highland faces persistent shortages in nursing, general practice, and some specialist roles. Temporary staff (locums) are much more expensive and erode financial stability.

3. Social care bottlenecks

Delayed discharges — often caused by shortages in care-home capacity or community-care staffing — mean beds stay full, reducing flow through Raigmore and other hospitals.

4. Historic deficits and legacy issues

The board has faced long-term financial challenges, including the well-publicised costs associated with previous organisational failings and cultural issues.

5. Inflation and post-Covid pressures

High inflation, rising energy costs, and long waiting lists all add to the annual deficit.

These factors mean NHS Highland’s reliance on brokerage is unlikely to disappear quickly. In fact, the board has been warned that its financial plan is not sustainable without major change.

What Does This Mean for the Future?

Brokerage is becoming the NHS equivalent of using a credit card to pay essential bills. It keeps the system functioning today — but at the cost of storing up a problem for tomorrow.

For NHS Highland, the growing brokerage balance means:

• Less flexibility for future investment

Major upgrades, new equipment, or service redesign become harder when the board must eventually repay over £100 million.

• Greater scrutiny from Audit Scotland and the Scottish Government

High levels of brokerage trigger additional oversight and stricter financial controls.

• A focus on savings rather than expansion

Board plans increasingly rely on efficiency savings, vacancy management, and service redesign.

• Pressure on local services

When money is tight, boards often struggle to maintain smaller rural services — raising concerns in communities across the Highlands.

• No easy route out

Repayment only begins when the board reaches recurring balance — but achieving balance becomes harder the longer brokerage continues.

So What Should Highland Residents Take From This?

The essential point is this: brokerage is a warning sign, not a collapse.

NHS Highland will continue to operate, and patients will still receive care. Brokerage ensures that.

But the long-term financial position is strained, and the scale of cumulative brokerage suggests the current funding model — both nationally and locally — is no longer aligned with the realities of delivering healthcare in a rural region.

As the debate over NHS reform continues, the Highlands will have a strong case to argue that geography, rurality, and social-care pressures require a different funding solution — not just more brokerage.

Because while brokerage keeps the doors open today, it leaves a growing financial shadow over tomorrow.

Key Takeaways for Highland Residents

Brokerage keeps NHS Highland running today, ensuring care continues.

The board’s £106.5 million liability is a warning sign, not a collapse.

Without structural change and sustainable funding, the cycle of temporary support will continue, limiting investment in hospitals and community care.

Highland’s unique geography, staffing pressures, and social care constraints mean that solutions must be tailored, not simply "more money."

Bottom line: Brokerage is essential today, but building a financially sustainable NHS Highland for tomorrow requires reform, investment, and smarter service design.

NHS Grampian by Audit Scotland 24/25

NHS Grampian and NHS Ayrshire and Arran both needed large loans from the Scottish Government to break even in the last financial year.

NHS Grampian received a £65.2 million loan in 2024/25 and is projecting a £68 million overspend in 2025/26. In May 2025, Grampian was escalated to Stage 4 of NHS Scotland’s support and intervention framework due to concerns about financial sustainability, leadership and governance, and service performance.

NHS Ayrshire and Arran needed a £51.4 million loan in 2024/25 to break even. It now has outstanding loans totalling £129.9 million, the highest amount across the NHS in Scotland. The board is forecasting a deficit of £33.1 million in 2025/26 and does not have a clear plan for achieving financial sustainability.

Stephen Boyle, Auditor General for Scotland, said:

These two health boards are not alone in finding it difficult to achieve financial balance, but their situations are currently the most pressing.

In the case of NHS Grampian, it won’t be possible for the board to return to financial balance without a significant redesign of its health and social care system.

The severity of the financial challenge facing NHS Ayrshire and Arran is unprecedented, and the board is relying on an overly optimistic savings plan that may not be achievable.

For both health boards, effective leadership and close working with the Scottish Government and other partners will be vital to improving their financial sustainability and the delivery of services