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NHS in Wales: Welsh health board deficits may reach over £800 million

By spring 2024, the Welsh NHS could potentially exceed its budget by over £800 million.

Hospitals are grappling with the impact of inflation, resulting in escalating expenses for fuel, personnel, and medications. Simultaneously, the demand for treatment has surged due to the backlog created by the Covid-19 pandemic.

Health Minister Eluned Morgan is urging health boards to identify cost reductions that will have the minimal impact on patients. However, she cautioned that addressing the substantial overspending would necessitate making challenging decisions. Previously, she had expressed concerns about the sustainability of the NHS in its current configuration.

The health minister has taken an interesting approach by subjecting all seven Welsh health boards to heightened financial scrutiny, a response to what she termed “extreme financial challenges.” She attributed these challenges to UK government austerity measures and record-breaking inflation. The deteriorating financial state was primarily attributed to mounting inflation, addressing the Covid backlog, an increasingly elderly population, and the need to compensate for staff shortages.

Eluned Morgan said: “We do not make these decisions lightly and it reflects the very difficult financial position we are in, as a result of inflation and austerity, and the challenges affecting health boards,”

“We are seeing operational pressures, long waiting lists, and an extremely challenging financial position in the NHS – but this is not unique to Wales.

“We will support health boards to improve their financial planning positions, but some difficult decisions will need to be made as we work through this very tough financial challenge.”

Darren Hughes, the director of the Welsh NHS Confederation, expressed that the healthcare service is currently grappling with its most challenging financial circumstances ever. It is contending with a “perfect storm” characterised by surging demand and escalating day-to-day expenses that are largely outside its control.

Audit Wales’ recent financial reports revealed that in the 2022-23 fiscal year, the seven principal health boards in Wales collectively incurred a deficit of £151.9 million. However, earlier in the year, health boards had already cautioned the Welsh government that overspending for the current year was anticipated to be substantially higher, at approximately £650 million.

Analysis suggests that without substantial cost-saving measures in the remainder of the fiscal year, this figure could potentially escalate to £825 million. If realized, this would mark the highest deficit ever recorded in the history of the Welsh NHS.