News / Audit Wales finds mixed picture for health boards

Auditor general Adrian Crompton (pictured) said the position on break-even had improved. Cardiff and Vale University Health Board, which had been in breach of the duty in previous three-year periods, met the target of breaking even between 2019/20 and 2021/22.

Betsi Cadwaladr, Swansea Bay and Hywel Dda university health boards failed to meet their break-even duty. Betsi Cadwaladr University Health Board has returned balanced positions in 2020/21 and 2021/22, with the help of significant Welsh government support.

However, the auditor general qualified his regularity opinion on the board’s 2021/22 accounts because of the failure to break-even over three years, and because it incurred irregular expenditure by complying with a ministerial direction to fund clinicians’ pension tax liabilities.

All health bodies, except the Welsh Ambulance Services NHS Trust, Health Education and Improvement Wales and Digital Health Care Wales, received a qualified opinion on the regularity of expenditure as a result of the ministerial direction.

Mr Crompton also issued a qualified true and fair opinion on Betsi Cadwaladr’s accounts because he could not obtain sufficient evidence that some figures were accurately stated and accounted for in the correct accounting period.

Health and social services minister Eluned Morgan said: ‘I am pleased at the progress made by Cardiff and Vale University Health Board in returning to in-year financial balance.

‘The health board has met its three-year break-even duty for the first time since the implementation of the 2014 NHS Finance (Wales) Act. As announced by the former health minister, any historical deficits incurred will no longer be repayable.’

Overall, health boards delivered 121% of planned savings (nearly £115m) in 2021/22. However, a greater proportion of one-off savings were delivered than in recent years – 49% in 2021/22 compared with 32% in 2020/21.

The auditors said the NHS in Wales had received an unprecedented increase in funding in 2020/21 (a 14.3% real terms increase) to help the service cope with the Covid pandemic.

This was followed by a rise of £0.2bn in 2021/22 (2% in real terms). But despite significant demand pressure due to Covid and backlog waiting lists, the in-year deficit across NHS Wales remained static at £47.4m compared with £47.9m in 2020/21. And the three-year cumulative overspend fell from £233m to £184m in 2021/22.

Mr Crompton said: ‘NHS bodies have faced the challenge of using that money to both respond to immediate service pressures and to also start to recover and reshape services to tackle backlogs and new patterns of demand.

‘The focus on recovery and remodelling must continue into the current year and beyond, but our data points to challenges with the workforce, as evidenced by a growing expenditure on agency staffing, and a need to develop a more strategic approach to service transformation.

‘As the peak of additional Covid funding subsides, NHS bodies will need to use the reinstated medium-term planning process to set out a financially sustainable path to service recovery and modernisation.’