'Significant challenges' for health funding, warns report

The Scottish government will face extra pressure funding health care as the country's population ages, a new report has warned.

A study by the Scottish Fiscal Commission found more effort is needed to help people stay healthy as they age, or else spending levels could become unsustainable in the future.

The assessment cautioned there will be "significant challenges" in funding devolved to public services, particularly over the next 25 years, due to spending outpacing funding by an average of 1.2% per year - or £1bn in 2024-25 prices.

Scotland's population is also expected to grow, reversing a prior prediction from the commission that numbers would decline after 2030.

Health is the largest area of spending in the Scottish budget and grows faster than any other area, meaning while health and social care spending is estimated to make up around 40% per cent of devolved public spending in 2029-30, by 2074-75 it will have jumped to just under 55%.

The SFC, which is the official economic forecaster, found that as health spending tends to rise with age, an ageing population would lead to more health spending in the future - unless healthy life expectancy also improved - meaning there would be "upward pressure" on budgets.

Healthy life expectancy (HLE) is the number of years a person can expect to live in full health, without being hindered by disabling illnesses or injuries.

An improvement in HLE would also ease the 1.2% gap between spending and funding, but if the population's general health was to worsen, that gap would then grow.

The SFC report provided two scenarios for the future, one based on positive improvements to the nation's health and the other negative.

The study states "several indicators point to a decline in Scottish population health", citing life expectancy in Scotland having stagnated since around 2012, a general decline in healthy life expectancy since 2018 and a rise in mental illness.

The country faces "significant health inequalities" due to factors like location or socio-economic position, and these are "wider in Scotland than in England."

SFC chairman Prof Graeme Roy said: "With this budget gap the Scottish government can't borrow. So that budget cap means cuts to public spending or increased taxes.

"Scotland faces a real challenge in terms of its overall fiscal sustainability because of this twin challenge of an ageing population and also an unhealthy population."

David Phillips, head of devolved and local government finance at the Institute for Fiscal Studies think tank, said households are likely to face a choice between higher taxes or a state investing less in public services.

Mr Phillips said this trade-off would remain an issue even if Scotland became independent at some point in the study's time frame.

He added: "Improving health and the performance of the healthcare system is vital to Scotland's finances. However, unfortunately, even substantial improvements in health won't be enough to avoid difficult decisions on tax and spending."

The Scottish government's Health Minister Neil Gray said he was " cognisant" of the anticipated changes and that the NHS in Scotland would be strengthened through plans to make it easier for people to see a doctor and increased investment in improving access to treatment.

Tory public finance spokesman Alexander Stewart claimed the report was "another damning verdict on the SNP government's inability to live within its means".

Jackie Baillie, Scottish Labour's health spokesperson, said: "This report is a stark reminder that 18 years of SNP complacency is leading our NHS and social care services towards disaster."

Figures in the report showed the overall population in Scotland is expected to rise, due to migration numbers increasing at a "higher than expected" rate.

The SFS expect this to continue, resulting in the population increasing until around 2050, when they forecast it will stabilise.

During that time the population's median age is projected to rise from 43 in 2029-30 to 49 in 2074-75, despite deaths being expected to outnumber births across the country.