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Auditor General describes extra funding to local health boards as 'unsustainable'

20/06/2012

Each of the seven local health boards in Wales has met the required standard for accounting and presenting their financial activities for 2011-12. 

In the case of four health boards however, their 'break-even' target was only met thanks to additional funding provided by the Welsh Government during the financial year. All four have therefore received additional reports from the Auditor General, highlighting the additional funding received to ensure 'break-even'.
The Auditor General issued unqualified audit opinions on all seven Local Health Boards' (health boards) financial statements for 2011-12, giving each of those statements a clean bill of health in meeting the required standards for accounting for and presenting their financial activities.

The Auditor General also issued a written report on the 2011-12 accounts of each of the four health boards that received additional Welsh Government funding in order to achieve their 'break-even' target for the year. The Auditor General's four reports, published today alongside his audit certificate for each health board, summarise the financial pressures and additional funding received during 2011-12 by each health board and the consequent financial implications for 2012-13.

The four health boards, and the additional funding received to enable them to achieve 'break-even', are:

Local Health Board	Additional Funding	Received from the Welsh Government
Aneurin Bevan	£4.5 Million	March 2012
Cardiff and Vale*	£12 Million	Novemer 2012
Cwm Taf	£4 Million	March 2012
Powys	£3.9 Million	March 2012

*see notes to Editors

Auditor General for Wales, Huw Vaughan Thomas, said today:
"The 2011-12 financial year presented every health board in Wales with significant financial challenges because of the downward pressure on funding and the continuing upward pressure on service demand. In my view, the historical pattern of the Welsh Government providing health boards with additional funding in year to manage deficits is not sustainable.
"That said, there are positive signs that the NHS in Wales is prepared to take the tough choices needed to deliver long-term change, although clearly it is a very challenging agenda. I will shortly be publishing my Health Finances report, which provides a more detailed assessment of the financial position across NHS bodies and the financial challenges that the NHS in Wales faces."

Notes to Editors:

• All seven health boards met their 2011-12 financial targets, including the requirement to live within their approved expenditure limit, this provision of additional funding meant that the Auditor General was not required to qualify his regularity opinion, which would have deemed any overspend to be 'irregular' i.e. unauthorised.
• The Auditor General's four substantive reports on LHB accounts in 2011-12 summarise the financial pressures and additional funding received in the year by each LHB and the financial implications for 2012-13 of the additional funding received.
• *In the case of Cardiff & the Vale, this was dealt with via a different process linked to its recovery plan.  The Health Board put savings plans in place at the start of the 2011-12 financial year to reduce its funding gap. The Health Board monitored and reported its performance against target to the Welsh Government at the end of each month.  Forecasts were regularly updated and, as is usual, various adjustments to the resource limit were made by the Welsh Government to reflect specific agreed activities undertaken and their costs. The net effect of these adjustments was a revised resource limit, after the first six months of the year.
• Copies of the Auditor General's reports have been laid before the National Assembly for Wales, alongside the 2011-12 accounts of the four health boards.
• The Auditor General did not place any substantive reports on accounts for the three NHS Trusts in Wales.
• The Auditor General currently anticipates publishing his detailed report on Health Finances in Wales in July 2012
• The Auditor General, and the auditors he appoints in local government, are the independent statutory external auditors of most of the Welsh public sector.
• They are responsible for the annual audit of most of the public money spent in Wales, including the £14 billion of funds that are voted to Wales annually by the Westminster Parliament. Elements of this funding are passed by the Welsh Government to the NHS in Wales (over £5 billion) and to local government (nearly £4 billion).
• The Wales Audit Office mission is to promote improvement, so that people in Wales benefit from accountable, well-managed public services that offer the best possible value for money. It is also committed to identify and spreading good practice across the Welsh public sector.
  

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