MORE than £2.5 million is being used to prop up Scottish Borders Council's Health and Social Care department ahead of the direct control of services being transferred next week.

The loss-making SB Cares is being scrapped at the end of this week following more than four years of controversy and financial failures.

As well as plundering cash from other departments, bosses at the local authority have called time on 'discretionary expenditure' and have also delayed recruitment in non-frontline vacant posts.

When SB Cares was launched in 2015 the business plan, which was provided by consultants at a cost of around £160,000, predicted the Limited Liability Partnership would generate profits of £1.65 million over the first four years.

But the most recent accounts show the arms-length organisation recorded losses of well over £7 million.

Last week members of the ruling Executive rubber-stamped £2.518 million to be moved from other departments to offset the predicted health and social care overspend.

Finance services manager Suzy Douglas stated: "The pressures in Health and Social Care arise through the non-delivery of savings, reduced income from charging and the costs of additional care packages."

SB Cares employs around 870 staff and provides care for 12,000 clients across the region.

Ahead of its launch, in 2014 consultants Care & Health Solutions predicted year one (2015/16) profits of £265,515, followed by £463,874 in year two, £466,906 in year three and £454,425 in the black last year.

The same company predicted SB Cares would be recording £606,243 profits for the current 2019/20 financial year.

But year after year the arms-length company has recorded major losses - £1.294 million in year one, followed by £2.676 million, then £735,000 in 2017/18 and £2.851 million last year - a total of £7.556 million.

Although bosses identified and made savings to its operations over the four years, which included closing its Bordercare alarm centre in Galashiels, struggles to balance the books along with poor inspection reports and senior staff suspensions led to the decision for the local authority to take back direct control.

The council's Finance spokesman, Councillor Robin Tatler, believes much of the predicted financial overspend for this year is down to an increase in demand.

He said: "said: “A significant financial challenge of £2.5m has arisen, largely due to more people requiring more complex care than was predicted when the budget was set last February.

“Through underspends in some services and income from other areas we will be able to minimise the impact on the overall revenue budget and remain confident of achieving a balanced position come the end of March.

“However, this does emphasise just how challenging it has become for the council, like other local authorities, to continue to balance our books when demand for services continues to grow. In the Borders there are particular demographic pressures which will only increase year-on-year too.”

A spokesperson for the local authority told us: "SB Cares delivered a valuable contribution of £3.656million of net savings back to the Council over four years.

"The losses calculation takes into consideration pension fund liabilities which the council would have had to pay in any event.

"The pension fund is 114 percent funded, so there is more than enough to pay for pension benefits when they are due and therefore there is absolutely no impact on the council’s budget or reserves."