Betsi Cadwaladr Health Board: NHS debt fear despite cash injection

Welsh health boards have a legal duty to ensure they are not in debt at the end of the financial year

Wales' largest health board predicts it may be £3.9m in debt by the end of the financial year, despite £15m of extra funding from the Welsh government.

Betsi Cadwaladr Health Board, which is responsible for the NHS in north Wales, says it may not meet its legal duty to balance its books.

Analysis by BBC Wales indicates other health boards are also facing similar challenges.

But managers say they remain focused on trying to balance their budgets.

A report prepared by the Betsi Cadwaladr's director of finance, which will be discussed at a public meeting of the health board on Thursday, says the situation is "of serious concern to the health board and the Welsh government".

Its struggle to avoid any debt by the beginning of next month comes despite the £15m cash injection from the Welsh government in December.

Cardiff and the Vale Health Board also received extra funding of £25m as part of the Welsh government's £82m package for all health boards to deal with increased pressures on services such as A&E.

But the health board's latest financial projection, prepared in advance of its own board meeting on Thursday, is a financial year-end deficit of £4.6m "if no further action is taken".

However it insists it is trying to reduce spending and increase savings which include "a final push" to reduce pay costs.

Hywel Dda Health Board, which received £8m of extra funding, is also due to discuss its latest financial projections, which show a potential deficit of £3.5m at the end of the financial year.

Powys Health Board, which received £4m of extra funds has also indicated it could face an end of year overspend which at the end of January was forecast to potentially be £5.1m.

Legal duty

The projected deficits would only account for a tiny proportion of the total annual spending by each of the Welsh health boards, but all health boards have a legal duty to keep within budget.

If any health board fails, the overspend will be considered "irregular" and its accounts would be automatically sent to the Wales Audit Office.

But some other Welsh health boards are predicting they will succeed in balancing their books.

Aneurin Bevan Health Board says it has "confidence that a balanced financial position is achievable" despite having overspent by £1.4m at the end of February.

Abertawe Bro Morgannwg Health Board predicts it "should be possible now to achieve a balanced financial position" despite the fact it had overspent by almost £5m at the end of January.

Health Minister Mark Drakeford has conceded that some Welsh boards may fail to balance their books

Cwm Taf Health Board says it is on course to overspend by only £13,000 at the end of the financial year but says its financial position is "extremely tight".

All of the health boards received extra funding from the Welsh government.

Earlier this week health minister Mark Drakeford conceded that some Welsh boards could fail to balance their books by the end of the financial year.

Mr Drakeford warned that if health boards do overspend he would expect detailed explanations from managers about why they had failed to reach their cost-cutting targets.

He said he would not be thinking about "kneejerk reactions", but did warn there could be consequences.

"I don't start from the view that getting rid of people and boards and so on should be the immediate reaction to what might happen because I think you have to look at those explanations," he told BBC Wales.

"But I want to be clear with health boards in Wales that if I were to be convinced that the reasons why they haven't succeeded is that they have failed to take the actions that they could have taken and that other health boards have taken, then I do expect people to live up to those responsibilities."

A Welsh government spokesperson said: "NHS organisations have a fixed budget to work within and have a statutory duty to deliver services within it.

"We will receive draft year end accounts at the beginning of May, with the final position published formally following an external audit in June."

BETSI CADWALDR HEALTH BOARD

Area: Includes Ysbyty Gwynedd, Bangor; Glan Clwyd and Wrexham Maelor hospitals.

Extra funding: £15m from the Welsh government in December.

Position: The finance report detailing its position at the end of February forecast a deficit of £3.9m.

Of £67m savings needed in the current financial year, only £42.3m had been achieved by end of February, meaning the health board is £24,866 behind its savings plan to date.

The report says this is of "significant concern". The health board overspent by £1.6m in February alone on staff pay.

The report concludes "Further action has been escalated, however we cannot provide the assurance the board will require for a breakeven position at this time".

Statement to BBC Wales: "The health board remains focused on its statutory requirement to achieve a balanced financial position for the year."

CARDIFF AND VALE UNIVERSITY HEALTH BOARD

Area: Includes University Hospital of Wales, Cardiff and Llandough Hospital.

Extra funding: £25m

Position: The finance report detailing its position at the end of February forecast a £4.521m deficit - an improvement of £1m on the forecast at the end of January.

Statement: "The financial position has improved by £1m from the previous month's forecast and this encouraging progress is welcomed.

"However we are continuing to drive towards a break even position and we expect this position to improve further."

ABERTAWE BRO MORGANNWG

Area: Includes Morriston Hospital, Swansea, Neath Port Talbot Hospital and Princess of Wales Hospital, Bridgend

Extra funding: £10m

Position: The finance report detailing its position at the end of January had an overspend at end of January of £4.872m.

"Given the delivery of all the savings plans and the actions to be undertaken to control costs to available budgets, it should now be possible to achieve a balanced financial position at year end," it said.

Statement: "ABMU has had a challenging year financially, with an increase in demands on services, including A&E and Critical Care, with high numbers of very poorly patients.

"We received an additional £10m from Welsh government in recognition of these service pressures.

"The health board has put cost saving plans into action and reduced overspends, and we are now forecasting a breakeven position by the end of this financial year.

"However, significant pressures remain with unscheduled care and trauma services, and we are continuing to see increased numbers of patients arrive in our emergency departments who are very poorly.

"These pressures have to be managed along with the need to maintain access to our routine services within the resources available. Good progress is being made to ensure that the breakeven position is delivered."

ANEURIN BEVAN HEALTH BOARD

Area: Includes the Royal Gwent Hospital in Newport and Nevill Hall Hospital, Abergavenny

Extra funding: £10m

Position: The finance report detailing its position at the end of February said it had a £1.4m overspend.

But projections "should provide the health board with confidence that a balanced position at year end is now achievable".

Statement: "The Month Eleven [February] financial position of the health board is a deficit of £1.4m, which demonstrates continued progress towards a break even position in line with health board plans.

"The health board is confident that a balanced position at year end is within sight and is achievable."

HYWEL DDA HEALTH BOARD

Area: Includes Bronglais General Hospital in Aberystwyth, Glangwili General Hospital in Carmarthen and Withybush General Hospital in Haverfordwest.

Extra funding: £8m

Position: The latest report at the end of February sees a forecast of a potential deficit of £3.5m at the end of the financial year, although it insists it is working towards a break-even position.

Statement: "We are working hard to reach a balanced position against a backdrop of increased activity and recruitment issues that has resulted in a higher spend on locum and bank staff.

"We remain committed to ensuring safe, high quality services within our available funding and using all our resources as effectively as possible and, as a result, the health board has made significant cost improvements and savings in 2012/13, more than in any other year."

CWM TAF HEALTH BOARD

Area: Includes the Royal Glamorgan Hospital in Llantrisant and Prince Charles Hospital in Merthyr Tydfil.

Extra funding: £10m

Position: The finance report detailing its position at end of January gave an overspend of £1.3m by the end of January.

Statement: "The full year forecast shows that full delivery of the directorate forecasts for the last two months of the year would give a small deficit of £13,000. The position therefore is extremely tight."

POWYS TEACHING HEALTH BOARD

Area: Brecon War Memorial Hospital and Llandrindod Wells County War Memorial Hospital.

Extra funding: £4m

Position: The financial Report at the end of January gave the most likely forecast of an overspend of £5.16m.

It said the overspend deteriorated from earlier in the year as a result of the confirmed loss of income by the Welsh government of £0.8m during the previous month.

This loss of income is in direct relation to the capital charges funding historically provided by Welsh government for English NHS Trust providers.

Other pressures noted included "clearing the backlog of waiting times patients".