NHS Wales cash likely to fall short, research says

Health funding is unlikely to be enough to cope with the post-pandemic pressures facing the Welsh NHS, finance experts have said.

Higher-than expected inflation has dealt a "significant hit" to spending plans, says a report that presents a "gloomy backdrop" for the economy.

It comes a week before the Welsh government publishes its next budget.

Chancellor Jeremy Hunt topped up funding for Wales in his autumn statement.

That was largely because of extra spending on the NHS in England - but high rates of inflation could cost the Welsh government £1.4bn over two years.

The Wales Fiscal Analysis report from Cardiff University said if all the extra funding was passed on to the Welsh health service, NHS funding would grow about 2.4% over three years - less than the 2.7% the Welsh government was planning for.

"Spending will likely fall short of the funding pressures felt by the health service in the aftermath of the pandemic," the report said.

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In its last budget, the Welsh government said dealing with a backlog of treatments, caused by Covid lockdowns, was its "highest priority".

But waiting times have continued to rise this year.

Spending plans for next year will be published by Finance Minister Rebecca Evans on 13 December.

Tighter spending will also make it difficult to continue with payments from the Welsh government to ease the cost-of-living crisis.

Ministers also face difficult decisions over public sector pay, with nurses and ambulance staff due to go on strike.

Report author Guto Ifan said inflation had "eaten into the real value" of the government's spending plans, leaving it facing "an incredibly difficult outlook".

"We think given the increased costs on public service and public service employers that's going to fall short of the post-pandemic spending pressures and funding pressures that the NHS is facing," he said.

His team estimates a 1p increase in all income tax bands would raise £275m next year.

Despite Welsh Labour ruling out an income tax rise in its manifesto, Mark Drakeford said in October the case for a tax rise would be "powerfully considered". However since then Jeremy Hunt has scrapped the tax cuts promised in Liz Truss's mini budget.