Health warning over NHS Wales finances

The Auditor General has sounded an alarm about NHS finances in Wales, after four of the seven health boards once again failed to meet their financial duty to break-even over a three-year period, according to a review of their 2019-20 accounts

Three of these – Hywel Dda University Health Board (UHB), Betsi Cadwaladr UHB and Swansea Bay UHB (formerly known as Abertawe Bro Morgannwg UHB) – also failed to meet their legal duty to have an approved three-year plan.

As a result, the Auditor General has had to qualify his audit opinion on the accounts of all three bodies.

Cardiff and Vale UHB broke-even on its annual budget for the first time since 2015-16, and now also has an approved three-year plan to 2021-22, but the fact that its budgets still do not balance, as required, over the three-year period to 31 March 2020 means that the Auditor General has had to qualify his audit opinion on the 2019-20 accounts.

The three other health boards, three NHS trusts and one special health authority all met their duties to break-even and have had approved plans in place.

Hywel Dda UHB and Betsi Cadwaladr UHB largely sustained their financial position compared to last year, recording similar in-year deficits but failing to meet the reduced deficit ‘control totals’ set for them by the Welsh government.

However, the finances of Swansea Bay UHB deteriorated. Having set out to break-even, the health board recorded an in-year deficit of £16.3m.

Across NHS Wales, the total in-year deficit fell from £96m in 2018-19 to £89m. The three-year cumulative over-spend across the NHS reduced from £411m to £352m.

NHS bodies reported that they collectively achieved £130m in savings in 2019-20, some £18m less than the year before.

The Auditor General’s report said recurrent savings, which continue in future years, fell substantially: from £125m in 2018-19 to £87m in 2019-20, suggesting that the NHS is facing a challenge to find sustainable savings by making long-term operational changes.

The report said that although it started in February, the immediate effects of the Covid-19 pandemic on NHS Wales finances were limited, and NHS bodies’ expenditure during the final quarter of 2019-20 remained largely in line with their pre-pandemic forecasts.  However, the significant additional Covid-19 related spending is expected to have a major impact in the 2020-21 financial year.  

Adrian Crompton, Auditor General, 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.’

NHS Wales Finances 

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