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Three quarters of the boards, which are responsible for overseeing the integration of health and social care services at a local level, reported a deficit in 2023-24, the Accounts Commission said in its latest financial bulletin.
It found that despite a 4% real-terms increase in funding, most boards were reliant on contributions from partner health boards and councils or unplanned use of reserves to stay afloat.
Although the majority of savings targets were achieved, half of all savings were met on a non-recurring basis and would have to be carried forward to be found again in future years.
“There is a concerning picture of continued overspending, depletion of reserves and savings being met through one-off rather than recurring savings,” the commission said.
Across Scotland, the total reserves held by the bodies fell by two-fifths, while contingency reserves almost halved, limiting the boards’ ability to address future deficits.
One board, Aberdeenshire, depleted its entire stock of reserves in-year, while eight others – including Edinburgh, South Lanarkshire and Scottish Borders – were found to have no contingency reserves at all.
The commission warned that boards cannot continue to rely on NHS boards and local authorities, which themselves face significant financial challenges, to bail them out.
It was also concerned by the continued high turnover within boards of chief officers and chief finance officers.
“Instability in leadership teams has the potential to disrupt strategic planning and the leadership capacity to bring about the fundamental change required to address the growing scale of challenges facing integration joint boards,” it said.
Commission member Malcolm Bell said that for too long, the boards had been fire-fighting immediate financial challenges.
“Now they must shift from making one-off savings and relying on reserves to transform how services are delivered if they are to tackle their precarious finances,” he said.
“A stronger focus on prevention is needed, with candid conversations with communities, councils and NHS partners vital around the difficult choices that need to be made.”
The Convention of Scottish Local Authorities said the findings came in the context of increased demand for social care services, workforce difficulties and constrained finances across the health and social care sector.
Paul Kelly, COSLA’s health and social care spokesperson, agreed that a stronger focus on prevention was needed to slow demand and improve outcomes, but said this had to go hand-in-hand with appropriate funding.
“The report rightly highlights the significant in-year financial contributions already made from partners,” he said.
“However, this is not a sustainable solution for integration joint boards and only adds to the pressures our councils are facing.”
Last year, a report co-authored by CIPFA called for policy on the boards to be revisited in the light of the financial pressure the bodies put on councils, both in terms of cost and the ring-fenced approach to grant allocation.
The Scottish Government said it had invested £21.7bn in health and social care in 2024-25, which included almost £2.2bn for social care and integration, representing an increase of £1.2bn in three years.
“On top of that, our Budget makes a record £15bn available for councils for 2025-26,” a spokesman said.
