27 February 2026
by Graham Martin
Cuts will impact crucial services and third sector organisations
An alarm bell has been rung on the future of social care services in Scotland.
Audit Scotland has produced a report saying that mounting financial pressures are forcing tough decisions on the country’s Integrated Joint Boards (IJBs), which are leading to devastating cuts.
These affect crucial services and third sector organisations.
IJBs are independent legal bodies responsible for planning, commissioning, and overseeing adult health and social care services. They bring together NHS boards and local authorities to create a single system. Crucially, they manage budgets for social care services.
Audit Scotland - which audits over 200 public sector organisations to ensure public money is spent properly, efficiently and effectively - says that funding to Scotland’s 30 IJBs increased by over 2% in 2024/25 to over £12 billion but this has not matched rising costs and demands, with many IJBs using dwindling reserves to help meet a nearly £450m gap between demand and available funding.
Increasing demand, rising costs and a growing number of people with long-term complex needs are placing mounting financial pressures on IJBs, which Audit Scotland warns is unsustainable when compared to the funding being offered.
Key risks to financial sustainability include significant budget gaps, lower levels of reserves to draw on, and reliance on non-recurring savings.
To bridge this financial gap in the coming years, without additional funding, the Audit Scotland report says that IJBs will need to make difficult decisions about services.
This will likely include reducing service provision, changing eligibility criteria, and introducing charges for some services.
Audit Scotland says that the boards have now reached a critical point, with a significant risk that they will become financially unsustainable within the next 12 to 24 months.
Alongside savings and using reserves, IJBs have been relying on substantial additional funding from the NHS and councils.
Audit Scotland now says IJBs need to plan their finances more realistically to reduce this reliance, as health boards and councils face their own significant financial pressures.
Scotland’s Health and Social Care ALLIANCE responded to the report by calling for greater third sector input into “redesign” to create a “more preventative system”.
Chief officer Sara Redmond said: “The ALLIANCE is deeply concerned about the growing trend of cuts to services that provide essential preventative and self management support. These budget gaps will affect third sector organisations funded by IJBs and most importantly the people who access and rely on their services and support.
“These financial pressures force IJBs to balance the need to shift towards a focus on prevention with cuts to the preventative and self management support that is essential for improving people’s health outcomes.
“We must prioritise lived experience in these decisions. We are already seeing a trend of worsening health and an increase in people providing unpaid care. Whilst this is a welcome report which continues to highlight the pressures facing vital public services, we must keep people at the centre of these conversations and not reduce this to a system issue.
“Efforts to balance budgets will not improve health outcomes. Therefore, redesigning to a more preventative system is essential. The third sector plays a crucial role in delivering the innovation needed to achieve this. It is vital that efforts to redesign and develop strategic plans are done so in collaboration with the sector and people themselves.
“We must also not overlook the need for fair funding for the third sector, to ensure the sustainability of these services which play a key role in meeting national ambitions for public service reform.”
Age Scotland chief executive Katherine Crawford added: "The dire state of health and social care services outlined in this Audit Scotland report is something that sadly we are all too aware of. The closure of lifeline social and community services across the country are already having a devastating impact on older people, affecting their wellbeing and exacerbating loneliness and social isolation.
"The deteriorating situation shows just how important it is to fix social care in this country which is why we want the party political leaders to get round the table after the Holyrood election and, once and for all, come up with a deliverable plan to sort out the mess that social care has become.
"Social care reform requires significant investment from governments and some real accountability. Services are crumbling and we can't afford another five years of hand-wringing and failure to act. Voters have a right to know if politicians are going to make fixing social care a priority. It is a vitally important service that deserves proper support, not just for older people but for all of us."
Malcolm Bell, member of Audit Scotland’s Accounts Commission, said: “The cost of delivering services is rising faster than available funding.
“Tackling this could include difficult decisions about redesigning or reducing services, and whether new or additional charges need to be made.
“Whatever decisions are made, service users, their families and wider communities must be consulted.
“But without radical change the services delivered by IJBs can’t be sustained.
“The gap between funding available and the cost of meeting demand is widening, and the gap of nearly £450m cannot be bridged with savings alone.”
The Audit Scotland report is available here.
The above information is from a Third Force News (TFN) Weekly Health & Social Care roundup Newsletter Wed 04/03/2026