Health board overspends by £22.2m this year

Twm Owen, Local Democracy Reporter

A health board has confirmed it has spent £22.2 million more than planned so far this year.

But the Aneurin Bevan University Health Board has said by the end of the financial year, in March, it expects its deficit position – that is the gap between what it receives in funding and how much it actually spends – to be £47.860m which is a £1m improvement from the £48.9m deficit in its updated annual plan.

However, the £47m figure is still £35m greater than the Welsh Government’s control total of an end of year deficit of £13m. Director of finance Rob Holcombe told the board’s September meeting: “The Welsh Government is broadly content with our position.”

His report did however remind members the £64.5m in additional funding from the government first awarded last year is conditional on it “making progress towards” the £13m figure, and could be “clawed back” throwing its current financial plans out of the window.

The Message

Mr Holcombe said the government’s message is to continue its progress “and go further”.

In the following 2024/25 financial year the board expects to have a deficit position of £55m.

The board started the current financial year with an underlying financial deficit of £81.4m and it expected new cost pressures to amount to £59.8m but that total figure would be reduced through additional discretionary funding worth £51.8m while it has also planned to make £40.5m in savings and cuts, producing what had been the final predicted deficit of £48.9m

The £22.2m figure represents the health board’s position at the end of August and the latest financial report also shows that it currently expects to beat its savings target by £3m due to a better than expected outcome of an arbitration case and savings related to blood clot medicine Rivaroxaban.

During August the board achieved £3.4m in savings and over the year to date the figure is £13.3m.

Risks to achieving its planned position include increased average price for various drugs that have pushed up prescribing costs from a budgeted £7.29 to £7.52 per item and nursing maternity leave cover.

Patients

Patients stuck in hospital also continues to be a cost pressure on the board with 319 occupying beds at the end of August despite being fit for discharge.

Approximately 25 per cent of “blocked bed days” are health related, 46 per cent due to problems with social care or packages of care so people can return home and the remaining 29 per cent down to other reasons including patient/family problems or nursing homes.

Over the year blocked beds are expected to cost the board £16.1m based on a £150 cost per “bed day” and they also contribute to a surge in bed capacity which results in increased demand for high cost temporary staff, impacting overspends and performance across the health board.

As a result the board has a discharge programme, but use of one scheme to return patients home slowed in August from 49 to just six patients. There is also a plan to reduce beds to help manage costs.

Though temporary staff costs remain a pressure the board has reduced its spending on agency nurses and if it continues at its average levels this year the final bill will come in at around £13m compared to £17.7m in 2023/24.

However part of the saving in August was down to a “high level” of unfilled shifts with around 100 registered nursing shifts and 350 healthcare support worker shifts not filled, had they been fully staffed spending could have increased by another £200,000.

The board is developing a three-year recovery plan as part of an “agreed route map to sustainability” while it expects its capital funding, for one-off large scale costs, to break even over the year.