NHS Wales: Health boards must find £65m extra savings

Glangwili hospital

The deficit at Hywel Dda health board in west Wales has worsened in recent months

By Owain Clarke
BBC Wales health correspondent

The NHS in Wales will be asked to find tens of millions of pounds worth of extra savings, as the Welsh government stands by to bail health boards out.

Health Minister Eluned Morgan has told health boards to find extra savings of nearly £65m to bring their predicted overspends down by 10%.

There are fears this could lead to reduced bed capacity during the most difficult winter months.

But health boards look set to receive more than £460m towards overspends.

In a statement, Ms Morgan insisted that the NHS needed to make savings as it faced unprecedented financial challenges.

"The NHS in Wales, like other healthcare systems, is facing the most challenging financial pressure in recent history," she said.

"This is due to the impact of continued increasing demand on services, persistently high inflation on costs including energy, medicines, and pay-related pressures, in addition to the impact of the pandemic and ongoing Covid-related costs."

Currently between them, health boards are heading for deficits totalling at least £650m, but this figure could well be more based on latest financial estimates.

Now they are being asked to rein in those overspends by at least 10%.

BBC Wales analysis can reveal what the new saving targets means for each health board:

  • Swansea Bay health board will need to find an extra £8.7m to bring it's predicted overspend down by 10%

  • Aneurin Bevan health board needs to save an extra £11.3m

  • Betsi Cadwaladr health board needs to save an extra £13.4m

  • Cardiff and Vale health board needs to save an extra £8.8m

  • Cwm Taf Morgannwg health board needs to save an extra £7.9m

  • Hywel Dda health board - which has the biggest overspend - needs to save an extra £11.4m

  • Powys health board will need to find another £3.4m

If health boards achieve their extra savings then the Welsh government, it is understood, will cover the rest of their overspends.

Last month, £425m was diverted to the health budget from other cabinet briefs. Extra money has also been found for the NHS from within the health budget.

Altogether, £460.2m will be provided as health boards struggle to deal with inflationary pressures and the rising costs of energy, drugs and covering vacancies by using agency staff and locums.

This ranges from £18m in Powys - which has the smallest deficit - to more than £101m in Wales' biggest health board, Betsi Cadwaladr, which serves the whole of north Wales.

BBC Wales understands a number health boards will struggle to achieve the cuts needed.

Hywel Dda health board papers from September suggested the organisation was £35m adrift of hitting its original overspend plan.

The interim chief executive of Betsi Cadwladr health board recently suggested the organisation was £20m off hitting their predicted overspend.

It is understood that finding the extra savings will be particularly challenging for Aneurin Bevan health board, covering Newport and the old Gwent valleys.

Following the savings and extra support, it is anticipated that the overall deficit will be down to £123m, with £45m of that at Hywel Dda health board, which has the biggest overspend.

Earlier BBC Wales analysis suggested Welsh health boards could be on course to collectively overspend by around £800m by March next year.

Speaking to the Senedd's health committee, Ms Morgan said there could be fewer beds available in the NHS this winter because of the need to make savings.

Health boards have been asked to reduce their spending on temporary agency staff and there are fears this could make it difficult for hospitals to open up more capacity to deal with surges in demand.

"We do have to be sensitive that we will have surge times - and there may be an issue relating to the number of beds," the health minister told MSs.

But she insisted that there were a higher number of beds in the NHS in Wales per head of population than in England.

Ms Morgan told the Senedd that it was challenging, but she expected progress to be made by health boards to deliver the controls they had been set.

"We should be clear that these are not cuts to budgets, but health boards will need to take actions to reduce expenditure and manage to the target deficits we have set out," she said.

Speaking to BBC Wales, the chief executive of NHS Wales, Judith Paget, insisted she would not allow health boards to put patients at risk in an effort to drive down costs.

Welsh Conservative finance spokesman Peter Fox said the Welsh government had "dug themselves a hole by prioritising their pet projects over our struggling Welsh NHS".

Plaid Cymru's health spokesman Mabon ap Gwynfor called for the health minister to take a firmer grip.

"The minister has consistently denied responsibility for failings in the health service claiming that she is not in charge of each health board," he said.

"This light touch approach has led to the dire financial situation that the health boards find themselves in with each one being in escalated measures."

The latest development comes after Wales' biggest hospital - the University Hospital of Wales in Cardiff - declared it had reached its highest level of alert due to huge pressures on A&E and "unprecedented" ambulance delays on Tuesday.

Prof Meriel Jenney, medical director at Cardiff and Vale health board, told BBC Radio Wales Breakfast she was optimistic it would be scaled back later on Wednesday if they were able to do so.

"It was a combination of a very large number of patients presenting, many of who were frail and requiring more complex care together with a large number of patients within the organisation that we needed to move through and discharge," she said.

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