The NHS in Wales met its challenging financial targets for 2011-12 through a combination of significant savings reported by NHS bodies and some additional funding from the Welsh Government.
The additional funding in the year consisted of a £133 million funding uplift to all Health Boards to address NHS cost pressures and £24.4 million of advances from 2012-13 funding to four Health Boards primarily to ensure they achieved 'break-even'.
The impact of the £24.4million advanced funding will be felt in 2012-13 and 2013-14. This will increase future financial challenges for those health boards, but reinforces the Welsh Government's tougher message about the importance of cost control. Alongside recent improvements in in-year financial monitoring and reporting by both NHS bodies and the Welsh Government's Department of Health, Social Services and Children, and the NHS bodies' reported savings of £285 million in 2011-12, actions are being taken to put health finances on a more sustainable footing.
The future challenges, however, remain significant. NHS funding will decrease in real terms up to 2014-15, and the Wales Audit Office estimates cost and demand pressures in the order of £870 million to £1 billion between 2010-11 and 2014-15. The pressure to keep meeting annual financial targets, as well as developing three-year service and financial plans to start the process of longer-term reform of NHS services, will be unprecedented.
Securing the long term future of sustainable health services in Wales is a priority and needs to be underpinned by effective financial management by NHS bodies and the Welsh Government. Work is underway in a number of areas including reviewing the accounting regime, improving funding opportunities and engaging clinicians in financial decisions to secure health provision in Wales for future generations.
Auditor General for Wales, Huw Vaughan Thomas, said today:
"Clearly the NHS in Wales is facing a very challenging agenda and short-term funding gaps remain a real concern. In short, even after the very significant savings already made, the status quo is simply unaffordable and there have to be service changes to secure its long term future.
The granting of funding advances rather than year end bailouts demonstrates the step change adopted by Welsh Government and this, coupled with positive signs that the NHS in Wales is prepared to make difficult choices to deliver long-term change, is encouraging."
Notes to Editors: