12. July 2012 13:54
The NHS in Wales needs to cut up to £1bn from its annual budget by 2015, according to the Wales Audit Office (WAO).
According to the Welsh Assembly, the savings needed – some 5% of the health budget – are “unprecedented”.
Welsh health boards are planning to centralise services in new treatment centres to save long-term coasts – but the WAO has warned this will be difficult to fund.
The WAO report says the NHS faces the most difficult financial settlement of any UK country: it needs to save between £870m and £1bn per year up to 2015.
According to Auditor General Huw Vaughan Thomas, “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.”
He identified a “catch-22”: the system cannot afford either to change or to stay the same. “There is a major challenge for the NHS and Welsh government to identify the costs of reform and the options to fund it.”
Capital funding has been cut by 36%, though the Welsh Government plans to provide £228m extra start-of-year funding over two years in order to help prevent health boards needing a bailout at the year-end (as happened to four this year).
Health Minister Lesley Griffiths said: “I am very pleased the Auditor General recognises our approach to NHS finance, introducing a more flexible system which removes the dependency on end-year bailouts, is sensible and sustainable.”
Swansea University health economist Professor Ceri Phillips suggested that a solution could be to sell off older facilities in order to fund new treatment centres.
“Then we would see savings through the fact that patients would be released and discharged earlier from hospital without compromising safety,” he said.