Welsh NHS ‘faces £700m funding gap by end of decade’

14 Oct 16

The NHS in Wales is likely to face a funding gap of around £700m by 2019/20, according to new analysis published by the Health Foundation.

The Path to Sustainability by the think-tank reviews the financial pressures facing the Welsh NHS, and examines the options available to policy makers and health leaders to alleviate them.  

It concludes that long-term fiscal sustainability may be achievable providing funding increases in line with expected economic growth to 2030/31, and the NHS maintains the trend rate for efficiencies of 1% a year. However, a funding gap was likely to emerge in the near term, it said.

Nearly £300m of this will be closed by the UK government’s 1% cap on public sector pay increases. The remainder could be met by annual efficiency savings of 1.5%, which would be above the UK trend but not unprecedented.

Without any action to reduce pressures or increase efficiency, NHS Wales spending would need to rise by an average of 3.2% a year in real terms to keep pace with demographic and cost pressures, and the increased incidence of chronic conditions. Maintaining the current range and quality of services would therefore require a spending increase from £6.5bn in 2015/16 to £10.4bn in 2030/31.

Anita Charlesworth, director of research and economics at the Health Foundation, said the next few years would be tough for the NHS in Wales. “Immediate and sustained action is needed to protect patient care, but long-term sustainability is possible. Tackling the urgent funding pressures facing the Welsh NHS requires an unrelenting focus on improving efficiency,” she said.

“Securing its long-term future also requires increased investment and continued reform so the service meets the changing needs of an ageing population. But the health service is not an island – ensuring people can access high quality social care will also be vital to the future of the NHS in Wales.”

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