Welsh NHS deficit continues to grow, according to new Audit Committee report

The NHS in Wales began the 2006/07 financial year with a large deficit from 2005/06, in addition to the historic debt that is due to be repaid by some NHS bodies, according to a new Assembly Audit Committee report published today (Wednesday November 15). The report, Is the NHS in Wales managing within its available financial resources? says that the NHS needs to address these challenges and pressures in a sustainable way whilst also delivering the further improvements in waiting times for patients that need to be achieved by 2009. The financial year 2005/06 presented a number of significant challenges for the NHS in Wales.  These included the implementation of the pay modernisation initiative for non medical staff entitled “Agenda for Change”, the continuing improvement in waiting times for patients to access services and escalating energy prices.   The Committee’s investigation found that there was a great variation in how different local NHS bodies were coping with these pressures, but by the mid-point of 2005/06 eleven local NHS bodies and Health Commission Wales were predicting a deficit at the end of the financial year. The total NHS deficit seemed set to rise to £30 million. The financial performance of Health Commission Wales (HCW) is a significant concern to the Committee. The report makes a number of recommendations, including, if recent senior appointments do not bring a significant improvement in managerial capacity,  a fundamental review of HCW’s role, accountability and funding arrangements. It also recommends that WAG should finalise its review of financial management arrangements in the NHS in partnership with local NHS bodies and the Wales Audit Office. Janet Davies AM, Chair of Audit Committee, said: “The Committee accepts that 2005-06 was a difficult year, with above inflation pay increases for non-medical staff under ‘Agenda for Change’, escalating energy costs and demands to reduce waiting times. Some NHS bodies are coping with these pressure but others are not. Those that do cope must not be penalised. “Historic debts still have to be met and I am greatly concerned that Strategic Change and Efficiency Plans have not succeeded in doing this in some NHS organisations. Achieving a sustainable financial position is not easy in the face of new and changing demands on the NHS, but some organisations are succeeding. “That the NHS in Wales receives much greater funding than it did during the first year of the National Assembly’s existence raises a major question over management.”