Health boards overspent £89m in last financial year
HEALTH boards in Wales collectively overspent by a colossal £89m in the last financial year, it has been revealed.
A new report by the Wales Audit Office (WAO) also showed that over the course of the past three years, Wales’ seven health boards were £352m in the red.
However, this is an improvement on the £96m overspend in 2018-19 and on the £411m cumulative threeyear overspend between 2016-17 and 2018-19.
Four of the seven health boards failed to meet their financial duty to break even over the last three-year period, including Hywel Dda, Swansea Bay (formerly ABMU), Betsi Cadwaladr and Cardiff and Vale.
However, Cardiff and Vale UHB was described as making “positive progress” after breaking even on its annual budget for the first time since 2015-16. It also has an approved three-year plan to 2021-22.
The Welsh Government was found to have increased its revenue spending on health by £650m for 2019-20. Once inflation is factored in, that translated to a 6.8% increase in real terms.
Some £170m of this was used to cover additional pension costs, £95m for pay awards and £52m to support “improved performance” such as elective waiting times.
The Welsh Government also allocated an extra £192m to help integrate health and social care and wider transformation of services, some of which will be shared with local government and other partners. This investment is predicted to result in longer-term improvements to the cost-effectiveness of health and care services.
The WAO report stated that NHS expenditure during the final quarter of 2019-20 remained largely in line with their pre-Covid forecasts. However, it expects the “significant” additional Covid-related spending to have “a major impact” on figures in the 2020-21 financial year. Auditor General Adrian Crompton said: “Whilst any improvement in the overall financial health of NHS Wales is to be welcomed, I am concerned that several health boards continue to record annual deficits, despite some significant increases in their funding. “Looking ahead, NHS Wales clearly faces a huge challenge in trying to improve its financial performance whilst also grappling with the exceptional impacts of the Covid-19 pandemic. “I will be closely monitoring its progress throughout 2020-21 and publishing updates as appropriate.”
The report also found
that NHS bodies collectively achieved £130m in savings in 2019-20. This was around £18m less than in 2018-19.
Recurrent savings, which continue in future years, fell substantially from £125m in 2018-19 to £87m in 201920.
The WAO said this indicates that the NHS is facing a challenge to find sustainable savings by making longterm operational changes.
A Welsh Government spokesperson said: “There has been an improvement in reducing the overall NHS Wales budget deficit and it is encouraging to see the progress made by Cardiff and Vale University
Health Board in delivering a balanced budget.
“However we are concerned Betsi Cadwaladr, Hywel Dda and Swansea Bay university health boards have not been able to develop financially balanced medium-term plans.
“We have provided extra support and expect to see improvements in their financial planning.
“As the report notes, we continue to increase investment in NHS Wales to deliver our vision for a modern, integrated health and care system, which is set out in A Healthier Wales.
“In 2019-20 this extra investment included support for social services, digital transformation and prevention of ill-health.”