Manx Care, which has overspent in each year of its existence, is already reporting a £1.2m deficit for the first two months of the current year.

And it is forecasting to be £2m in the red by the end of the financial year even after using all of the £10m contingency fund allocated by Treasury.

Tynwald members will be asked this month to approve a supplementary vote of £15.3m for the Department of Health and Social Care to cover Manx Care’s overspend in 2024-25.

But interim designated finance officer Tammy Hewitt told Manx Care’s latest board meeting this week: ‘Currently at month two we have an operational year-to-date position of a £1.2m deficit.

‘Taking into account additional costs which we’ve currently got earmarked against contingency funding that takes us to a £2m deficit.

‘Because we are seeing these costs coming through, we are assuming we will need full usage of the £10m Treasury contingency fund.’

Manx Care submitted an operating plan for 2025-26 to meet its Budget funding allocation of £361.8m.

Board papers show the financial plan outlined potential gaps and pressures initially totalling £30m.

To close this gap, a cost-saving target of £14.6m was set.

Treasury allocated a £10m contingency fund to help Manx Care manage unexpected expenses and ensure the delivery of healthcare services - but the board papers reveal that the terms of reference to access the fund have not yet been fully agreed.

Similarly, transformation programme funding totalling £5.7m for 2025-26, which Manx Care is relying on to balance the books, has yet to be signed off.

Manx Care said it is working collaboratively with the department to agree terms of reference for both funds.

The main drivers of the deficit are the phasing of the cost improvement plan, slippage in the delivery of transformation programme workstreams and workforce issues within unscheduled care pushing up agency and bank staff expenditure.

Last year’s overspend was mainly due to higher than planned employee costs, an increase in spending on off-island care, and inflation causing the price of some drugs to be much higher than expected.

Manx Care was set up in 2021 as an independent organisation working at arm’s length from government to deliver health and social care services, as recommended by Sir Jonathan Michael’s report into healthcare reform.

In March members of Tynwald voted to postpone a motion to approve a supplementary vote of £20m.

Health and Social Care Minister Claire Christian said: ‘Although we’ve made some meaningful savings so far, we know there’s still more work ahead.

‘Our priority is always to provide safe, high-quality care for patients and that means we need to continue finding ways to work more efficiently and make the best use of public funds.

‘All healthcare systems around the world are grappling with rising costs and, even when we make savings, inflation can sometimes outpace them, which puts added pressure on our budget.’

‘However, the team remains firmly committed to managing those challenges carefully, always with the needs of patients at the heart of every decision we make.’