Health board’s fresh budget deficit puts £82m funding pot at risk

Alec Doyle, Local Democracy Reporter

A new financial black hole that has put £82 million of health board funding at risk has raised concerns over its ability to maintain services.

The latest finance report from Betsi Cadwaladr University Health Board shows that where the board was previously looking to break even, shortfalls in funding to from Welsh Government to cover the employers National Insurance uplift, inflationary pressures generated by the increased cost of cross-border services and a £6.8m cross-border Joint Care Commissioning overspend had created a £17.4m deficit in December and January.

The health board is now looking for more savings on top of the £40m saved this year already to restore balance to the budget.

If it fails, it may lose a recurring £82m Strategic Funding stream which it secured only last year.

“We have worked extremely hard throughout the year to manage our finances responsibly and have already delivered £40 million in savings,” said Russell Caldicott, Executive Director of Finance at Betsi Cadwaladr University Health Board.

“However, like many organisations across the UK, we have faced significant financial pressures outside of our direct control.

“These include a national increase in employer National Insurance contributions that was not fully funded, rising inflationary costs – particularly in relation to cross-border care where the costs of treatment provided in England have increased – and growing local pressures.

“These local pressures include the rising costs of continuing healthcare packages, supporting patients with complex mental health needs placed out of area and the opening of additional clinical capacity to help manage urgent and emergency care demand.

“Taken together, these factors mean we are now forecasting a year-end deficit of £17.4 million.

“We recognise that this position places at risk our £82 million Strategic Funding allocation, which supports key improvements and service developments across north Wales.

“We are actively working with Welsh Government to seek retention of this funding into 2026/27 and to ensure they are fully aware of the financial challenges we are facing.”

The news of yet more financial turmoil within the health board – and the potential loss of the Strategic Funding pit – was a serious concern according to Wrexham County Borough Council Leader Cllr Mark Pritchard.

He said the board needed to balance its budget and ensure that the services residents across north Wales need are protected.

“A health board should be the same as a local authority,” he said. “It should have a legal, statutory responsibility to bring in a budget.​

“We have to, we do it every year. We spend so much time and effort on it because that’s the law.​ It’s public money.​

“I feel is that there’s no accountability at the health board. They have people in charge, they need to get to it.​ If this was happening here, or in other local authorities, we’d be held up as unacceptable.

“It’s been like this years. That’s the frankness of it. So for me, I have no sympathy with them on the financial side.​ They get substantial amounts of money from the Welsh Government and they need to be accountable for it.​”

Impact

Mr Caldicott assured those using health services in north Wales that the board was working to avoid significant impact on those services.

“Our priority remains protecting frontline patient care,” he said. “We are committed to minimising any impact on patient services and ensuring that care continues to be delivered safely and effectively.

“We will continue to work closely with Welsh Government to explore all available options to strengthen our financial position while maintaining the services our communities rely on.”