By Paul Nettleton | 16 July 2013
Auditors have issued a stark warning that the NHS in Wales will struggle to live within its means and sustain the current level and quality of services, unless there is a significant change in funding or a transformation of services.
The Wales Audit Office reported today that health bodies in Wales worked hard to break even in 2012/13 on revenue of £6.1bn. There had been an improvement against efficiency targets, with patients spending less time in hospital. Shorter stays freed up staff and beds to treat other patients or to achieve cash savings.
But Huw Vaughan Thomas, Auditor General for Wales, said: ‘Breaking even is a small part of the story. NHS bodies reported around £190m of savings in 2012/13: a significant sum despite being some £100m less than the previous year.
‘Some of these reported savings appear to be overstated and NHS bodies are reliant on unsustainable one-off savings to achieve break even. Some NHS bodies reduced planned procedures to help them manage emergency service and financial pressures.’
Vaughan Thomas added that some key performance measures had worsened. ‘Waiting times for planned treatments have deteriorated over the past three years, with a growing number of patients waiting more than six months for their treatment.’ Performance in emergency care had also fallen, although for complex reasons.
The report said NHS Wales had faced tougher financial settlements than other parts of the UK over recent years. The Welsh Government’s Department of Health and Social Services was managing ‘the increasingly significant gap’ between the amount of money needed to meet known demand and cost pressures and the actual funding allocated.
‘With “flat cash” settlements for the last two years, much of the “low-hanging fruit” for making savings has already been identified and NHS Wales is facing a growing challenge to deliver cost reductions without impacting on patient experiences, safety and quality,’ said the report, Health finances 2012/13 and beyond.
For 2013/14, the DHSS had demanded more robust savings plans. ‘NHS bodies struggled to identify sufficient savings with a net funding gap of £212 million as of April 2013.’ With austerity likely to last until at least 2016/17, there were major financial and service challenges ahead.
The department is moving to requiring break even over three years, a change welcomed by Vaughan Thomas. There was considerable scope to improve planning at NHS bodies in Wales. At the start of 2012/13, they had produced financial plans that technically showed they had sufficient income and savings to match expenditure, ‘but these plans often had little or no detailed plans showing how they would be delivered through changes to services or the workforce’, the WAO said.
There was criticism of the ‘mixed messages’ sent by the department over the availability of additional funding.
The WAO said: ‘We understand the department’s desire to focus NHS bodies on their goal of living within their means. However, the historical provision of providing additional funding has contributed to an unhelpful culture where some NHS bodies are second guessing the position and assuming they will get additional funding.’
