News / AMs support year-end flexibility

The Welsh Assembly public accounts committee has supported calls to change health boards’ requirement to break even each year, but has also called for greater scrutiny of their financial forecasts.

A report, Health finances, said significant efforts were being made to improve financial management and deliver savings. But some elements of financial planning and management had to be improved. Chair Darren Millar said the committee was concerned about ‘apparently unrealistic and over-ambitious forecasts’.

The report insisted the Welsh NHS needed ‘support and challenge’. It recommended the introduction of greater year-end flexibility, accompanied by stronger planning processes and more robust financial monitoring.

Such a move, which is being explored by the Welsh government, would ensure a focus on achieving sustainable savings throughout the year rather than looking for non-recurrent savings at the end of each financial year, it said.

In recent years, the government has given the NHS financial support from reserves to help it break even, giving rise to accusations that it was ‘bailing out’ the service. In 2011/12 it supported four health boards, giving them a total of £24m in year. But in a shift in policy, the funds were in the form of brokerage. The report said in-year brokerage should continue to be available until a more permanent, legislative solution to year-end flexibility is implemented.

The assembly members (AMs) made a number of other recommendations, including a call for greater transparency in allocation decisions and the development of a consistent approach to the involvement of clinical staff in financial decisions.