Health bosses could withdraw from plans to provide services for new additional support housing planned as part of a £17 million Midlothian Council project in a row over funding.
Midlothian Council reduced its annual funding for health and social care services by £1.3million in its February budget as it looked to cut costs across the board.
The move stunned the county's Integration Joint Board (IJB) which oversees the services, after they claimed it was a 'last minute' decision by the local authority.
READ MORE: Midlothian health and social care hit with 'last minute' cut in council funding
And a report on how to plug the financial gap will this week recommend the board pulls out of plans to provide 48 additional extra care housing units in Dalkeith.
The Normandy Court housing units, which are made up of 40 one-bedroom units and 8 two-bedroon bungalows, are due to be delivered to Midlothian Council in June.
The housing is part of a £17m redevelopment of the Old Dalkeith High School site by the local authority which includes 44 new council homes as well as the extra care units.
However, the report by IJB chief officer Morag Barrow, says the board's involvement is no longer 'financially viable'.
It says: "No additional funding was received from Midlothian Council for the additional care provision and initial budget plans had been around re-alignment of Care at Home contract funding.
"The cost of delivering this service is £647k. Due to the reduction in budget offer, it is no longer financially viable for Midlothian Health and Social Care Partnership to deliver this additional development."
At a meeting of the IJB last month chief finance officer Claire Flanagan told members the decision by Midlothian Council not to give the full amount of cash allocated for health to them had been 'last minute' leaving health chiefs struggling to make up the difference as they faced their own deficit of more than £4 million.
The board receives funding from both the council and NHS Lothian to make up its Health and Social Care Partnership budget.
During the meeting, in which IJB officers recommended members reject the council's funding offer, Councillor Derek Milligan urged fellow board members not to reject the offer but to defer the decision until April to give officers the chance to look at alternatives.
He suggested a £1 million plan by health chiefs to replace analogue alarms with digital ones next year could be funded from the council's capital budget, adding other ways of off setting the cut may be available.
This week's report confirms that the council is likely to approve the additional funding for the alarms, but sets out several other cost cutting measures required to plug the gap in finances, with withdrawal from Normandy Court housing the preferred option.
The board meets on Thursday to discuss the proposals.
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