Argyll and Bute IJB's Budget Consultation - A Symptom of a Wider Funding Crisis in NHS Highland

1st February 2026

The decision by the Argyll and Bute Integration Joint Board (IJB) to launch a public consultation on its budget is significant, not simply because of the proposals themselves, but because it marks a departure from how financial decisions have traditionally been handled.

This consultation announced on 30 January 2026 strongly suggests a growing crack in the relationship between need, funding, and service delivery across NHS Highland.

The Argyle and Bute Integration Joint Board Consultation

While consultations are often presented as exercises in transparency and engagement, in this case they reflect deeper structural and financial problems rather than routine financial planning.

Argyll and Bute IJB is responsible for planning and delivering health and social care services locally, operating as part of a partnership between NHS Highland and Argyll and Bute Council.

When an IJB turns to public consultation on budgets, it is usually because the financial position has become so tight that difficult and potentially controversial decisions about services can no longer be absorbed internally. This is not a sign of business as usual; it is a sign that existing funding is no longer meeting existing demand.

Local Pressures in Argyll and Bute

At a local level, Argyll and Bute has been facing mounting financial pressure for several years.

Savings of several million pounds have been identified, but even senior officials have described these as "difficult", indicating that they go beyond simple efficiencies and may affect frontline services.

The consultation reflects the reality that the partnership must still legally set a balanced budget, even when costs are rising faster than funding.

Adult social care is a key driver of this pressure. High-cost care packages, care home placements, and the growing need for complex support in an ageing population have pushed costs well beyond original budget assumptions. Recruitment and retention problems in rural and island communities mean that services often rely on agency or temporary staff, which are significantly more expensive. These pressures are not short-term or exceptional; they are structural and persistent.

How This Links to NHS Highland's Wider Financial Position

Argyll and Bute's situation cannot be viewed in isolation. NHS Highland as a whole is experiencing serious financial strain. Despite receiving increased funding year-on-year from the Scottish Government, NHS Highland is forecasting a substantial overspend—running into tens of millions of pounds—unless recovery plans fully succeed.

This has led to NHS Highland being placed under the Scottish Government's highest level of financial monitoring and support, a status reserved for boards with sustained and significant challenges.

The largest pressures across NHS Highland broadly mirror those seen in Argyll and Bute:

Adult social care overspends, driven by demand, workforce shortages, and delayed hospital discharges

High spending on locum and agency staff, especially in remote and rural areas

Delayed discharge, where patients medically fit to leave hospital cannot do so because appropriate care is unavailable, driving up costs across both hospital and community services

Rising prescribing and treatment costs, linked to both inflation and increased clinical demand

These pressures combine to create a system where money is constantly diverted to deal with immediate operational risks, leaving little space for planned improvement or reform.

Funding Increases Do Not Equal Financial Stability

A key misunderstanding in public debate is the assumption that because NHS funding is increasing, financial problems should not exist. In reality, funding has risen, but costs have risen faster. NHS Highland's budget has increased significantly in recent years, and further increases are planned.

However, these uplifts have had to absorb:

National pay deals and workforce cost inflation

Increased demand from an ageing population

Higher costs associated with rural service delivery

Long-standing structural inefficiencies and legacy deficits

As a result, funding increases often only allow boards to "stand still", rather than genuinely improve services or eliminate deficits.

The National Picture - A System Under Strain

What is happening in Argyll and Bute and NHS Highland reflects a wider issue across NHS Scotland. Audit Scotland, the Scottish Fiscal Commission, and independent analysts have all warned that the NHS is not financially sustainable in its current form over the long term without major reform. Health and social care are projected to take up an ever-larger share of the Scottish Government's total budget, largely due to demographic change and rising care complexity.

At the same time, productivity has not recovered to pre-pandemic levels, meaning the system is delivering fewer treatments per pound spent than before, despite higher staffing levels and higher overall spending. This gap between funding, demand, and delivery is the core tension driving consultations, savings plans, and service redesigns across Scotland.

[b]What the Argyll and Bute Consultation Really Represents

Seen in this wider context, the Argyll and Bute IJB consultation is not just a local exercise in engagement. It is a visible sign of a fundamental imbalance between what communities need and what the system can currently afford to provide. It exposes the strain in the relationship between local partnerships, NHS Highland, and national funding structures.

While consultations can give communities a voice, they also risk shifting responsibility for painful decisions onto the public, when the underlying causes lie in long-term funding gaps, workforce shortages, and demographic pressures beyond local control.

The Argyll and Bute Integrated Joint Board's budget consultation highlights a growing crack across NHS Highland between rising need and limited financial capacity.

It reflects real and persistent pressures in adult social care, workforce costs, delayed discharge, and rural service delivery.

Although funding for NHS Highland and NHS Scotland continues to rise, it has not kept pace with demand and cost growth. As a result, local consultations, savings plans, and difficult service decisions are becoming more common not because of poor local management, but because the system itself is under sustained strain.

Long-Term Financial Gap Forecast

Independent economic forecasts show that:

Under current demographic and cost trends, health spending will grow faster than the money the Scottish Government gets through the Barnett funding formula, creating a structural gap in the long term.

The SFC estimated that Scottish public spending could be outpaced by overall costs by an average of around 1.5 % per year from 2030-31 to 2049-50 — meaning spending needs could exceed funding without reform or changes.

Other reports suggest this gap could be very large (potentially forcing either big spending cuts in other areas, tax rises, or both) if population health doesn’t improve.

So in the longer term, health spending pressures are outpacing funding growth unless major reforms or offsets happen.

Ultimately the Scottish Government must make the hard financial decisions with all the other pressures they have for weighing up taxes and spending priorities.