News / Tough year in store for NHS in Wales

Finance directors in Wales are predicting they will need to make 5% efficiency savings in 2009/10 despite a seemingly generous headline increase on the current health and social services budget.

The draft budget laid before the Welsh Assembly in October proposed health and social services spending rise to £6bn in 2009/10 from £5.69bn in the current year. While this represented a 5.3% increase on the 2008/09 budget, NHS managers said actual growth was less than it appeared.

However, in calculating the growth, managers said the Assembly had not taken account of an additional £84m of end year flexibility funding in the current year. They said that when this was taken into account, actual growth would be just 3.8%, of which revenue would be 3.3%.

Finance directors said NHS Wales faced severe cost pressures in 2008/09, particularly from inflation (estimated to rise by more than 5%), the growing number of elderly patients eligible for continuing healthcare and meeting the 26-week waiting time target. Though the Assembly government has ring-fenced £63m in 2009/10 to tackle waiting, this is included in the 3.3% actual growth in revenue.

One finance director said the NHS would have to make efficiency savings of around 5% - similar to the levels required in 2008/09. ‘While there is always scope for further efficiencies, this places serious doubt over the service’s ability to deliver these savings without repercussions for service delivery,’ he added.

Welsh NHS Confederation director Mike Ponton (pictured above) said the NHS faced ‘severe and growing’ financial pressures at a time of major restructuring.  ‘Budgets are coming under increasing pressure from rising inflation and fuel costs, waiting times targets, the growing elderly population, the cost of funding new drug treatments and the cost of implementing new, unfunded policy initiatives,’ he added.

‘The NHS will have to make some very difficult decisions about what services it can and can’t provide if it is to live within its means and reach the challenging targets that have been set.’

Welsh Department for Health and Social Services’ director of resources Jeff Buggle has written to trust finance directors requiring them to introduce service line reporting from 1 April 2009. Trusts must submit an action plan on how this will be achieved by 30 November.