Four Welsh boards fail breakeven duty

03 July 2019

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The Wales Audit Office said the Welsh government increased revenue spending by £231m in 2018/19, a 1.5% real terms increase.

However, there was still a shortfall on the amount the NHS bodies believed they needed to cover rising cost pressures. To bridge the gap, they made cost savings totalling £158m – around £11m less than the previous financial year.

The WAO said this was mostly due to fewer non-recurrent savings being made – recurrent savings were £125m, an increase of £5m compared with 2017/18.

Overall, the seven health boards and three trusts reported an aggregate revenue deficit of £96m in 2018/19. In 2017/18 the total deficit stood at £167m. With six bodies achieving small surpluses, the four health boards had an aggregate deficit of around £96.5m.

The four university health boards – Hywel Dda, Betsi Cadwaladr, Abertawe Bro Morgannwg (ABM, now known as Swansea Bay) and Cardiff and Vale – failed to meet their financial duty of breaking even over a three-year period. 

Vaughan Gething

Health and social services minister Vaughan Gething (pictured) said the government had set deficit control totals for each of the boards. Three boards – Hywel Dda, ABM and Cardiff and Vale – met these control totals.

In-year, he allocated an additional £27m to Hywel Dda after a zero-based review of its cost base – including this funding, the board improved its position by £7m compared with 2017/18. Cardiff and ABM each received an additional £10m and both improved their outturns.

However, Betsi Cadwaladr’s outturn figure was £6.2m higher than the control total. Mr Gething said benchmarking exercises had found potential efficiency savings of at least £85m-£125m.

He added: ‘I have agreed that PwC work alongside the health board during the first quarter of this year to improve its planning and approach to deliver sustainable financial improvement. This will help to ensure it has a more robust plan for 2019/20 and a basis for sustainable financial planning for the future.’