NHS Wales finances problems remain – says National Assembly Committee
6 March 2014
The state of NHS Wales finances are improving but cannot yet be given a clean bill of health, according to a new report from a National Assembly for Wales Committee.
The Public Accounts Committee has welcomed Welsh Government moves towards more flexible financial planning, but is not convinced that the introduction of the new system has been sufficiently well planned to ensure it is fit for purpose.
It believes Health Boards should be provided with more assistance in developing financial plans and that there should be clear information available concerning the criteria by which they are being assessed.
The Committee was also concerned that a request for up to date information regarding NHS Wales’s financial position was not met for two months, leaving members to wonder whether the Welsh Government had a sufficient handle on the situation.
Confusion also surrounded the purpose of extra funds provided to health boards in two separate payments totaling £200 million. The Welsh Government indicated that the funding was not a “bail out” for health boards who were struggling with a combined deficit of £212 million, but the Committee concluded that the in-year payments helped to reinforce poor financial planning in the Welsh NHS.
“The funding of NHS Wales remains a huge challenge and while significant efforts have been made by those working with the Welsh health service to make the immediate savings needed to break even, there is a still a great deal more that needs to be done,” said Darren Millar AM, Chair of the Public Accounts Committee.
“The Committee welcomes some of the progress made by the Welsh Government in addressing health finances, particularly with regards to more flexible arrangements, as that is something we have called for ourselves in previous reports.
“However, we have significant concerns about the controls in place to assist Health Boards in planning more flexibly, and we want to see more stringent accountability of senior managers and greater transparency regarding financial planning.
“It was disturbing that a simple request for up to date figures regarding NHS Wales’s financial position was not met for two months afterwards. We believe the Welsh Government should publish monthly financial updates for NHS Wales in a further commitment to transparency and accountability.
“Finally, the Committee believes that bailing out health boards, most recently to the tune of £200 million, simply isn’t sustainable. People need to have faith that their health services are being delivered effectively, within their means and without drastic measures such as surgery cancellations and closing wards to temporarily balance the books.
“We urge the Welsh Government to take on board our recommendations.”
The Committee makes 12 recommendations in its report, including:
The Welsh Government publishes a clear rationale for funding allocations of additional in year resources to NHS bodies. This would allow greater transparency and clarity in budgets and help to ensure that the resources are being allocated appropriately and value for money;
The Welsh Government hold senior management to account more rigorously, to ensure transparency for financial decisions; and,
Given the risks of financial planning over three years, the Welsh Government should require:
Fully balanced plan over three years for each Health Board with supporting detail;
Collective financial planning showing how budgets will balance across the whole NHS every year, and;
Detailed contingency plans setting out how Health Boards will respond if planned savings from up-front investment do not materialise and/or there are additional cost pressures.
Report: Health Finances 2012-2013 and beyond