NHS in Wales 'facing £2.5bn funding gap' says research

The NHS in Wales is facing a £2.5bn funding gap in the next 10 years, according to new research.

The Nuffield Trust has predicted demand on the NHS will outstrip the money it receives by 2025.

It would be the equivalent to more than 43% (two-fifths) of its current budget.

Health Minister Mark Drakeford said the report, commissioned by the Welsh government, recognised long-term savings could be made if services continue to be reformed.

The analysis assumes NHS spending rises in line with inflation and also forecasts the challenges facing the service in the short term.

But since the last assembly election, the NHS budget has actually been cut by around 0.5% a year.

And the study said that health spending would be 3.6% less in 2015-16 than it was in 2010-11.

The report also added that if there was a tighter squeeze than expected on spending, the shortfall could be significantly larger.

Best-case scenario

Researchers said the best-case scenario the NHS could hope for would be a £1.1bn funding gap, but that would only happen if the service's budget was to rise 2% - which is in line with national income instead of inflation.

In the short term, the Nuffield Trust said the NHS faced a challenging funding gap of £0.2bn in the next two years.

In conclusion, the research suggested demands on the NHS, in financial terms, would grow by around 3.3% a year.

Pressures facing the NHS in Wales include:

• Rising population

• Longer life expectancy with chronic health problems

• Medicine becoming more specialised and more expensive

• Employing more than 72,000 workers - Wales' biggest employer

The prediction is likely to inflame the debate whether the NHS could survive without reform.

The research by the Nuffield Trust mirrors a similar study in 2012 which predicted the NHS in England could face a £30bn "black hole" by 2021.

Mr Drakeford admitted the service faced challenges.

"The report also recognises further potential for additional long-term savings, which the NHS can make if it continues to reform and reshape services," he added.

"This includes concentrating highly-specialised services while providing more care in communities closer to patients' homes, preventing people from being admitted to hospital for routine treatments, building on the flexible three-year financial and planning regime we have introduced this year, and pursuing a prudent healthcare agenda."

Political reaction

Shadow Health Minister Darren Millar said the report showed the "terrifying" scale of problems facing the Welsh NHS, and the Conservatives were "committed to protecting the health budget in line with inflation - putting frontline services first and maintaining investment that is on a par with England and Scotland".

Plaid Cymru health spokeswoman Elin Jones said her party had proposed "the full integration of health and social care" and would recruit 1,000 new doctors to "alleviate the growing crisis in the provision of GP services in rural areas".

Welsh Liberal Democrat leader Kirsty Williams said issues such as "long lengths of stay in hospital and long waits for diagnostic tests" must be reduced to help alleviate an "unprecedented increase in the pressure on our NHS".